FIRST DIVISION

[G.R. No. 185220. July 27, 2009.]

LAGUNA METTS
CORPORATION, petitioner, vs.
COURT OF APPEALS, ARIES C.
CAALAM and GERALDINE
ESGUERRA, respondents.
RESOLUTION
CORONA, J p:
This petition arose from a labor case filed by private
respondents Aries C. Caalam and Geraldine Esguerra
against petitioner Laguna Metts Corporation (LMC). 1
The labor arbiter decided in favor of private
respondents and found that they were illegally
dismissed by LMC. On appeal, however, the National
Labor Relations Commission (NLRC) reversed the
decision of the labor arbiter in a decision dated
February 21, 2008. Private respondents' motion for
reconsideration was denied in a resolution dated April
30, 2008.
Counsel for private respondents received the April 30,
2008 resolution of the NLRC on May 26, 2008. On
July 25, 2008, he filed a motion for extension of time
to file petition for certiorari under Rule 65 of the
Rules of Court. 2 The motion alleged that, for reasons
3 stated therein, the petition could not be filed in the
Court of Appeals within the prescribed 60-day period.
4 Thus, a 15-day extension period was prayed for. 5
In a resolution dated August 7, 2008, 6 the Court of
Appeals granted the motion and gave private
respondents a non-extendible period of 15 days within
which to file their petition for certiorari. LMC moved
for the reconsideration of the said resolution claiming
that extensions of time to file a petition for certiorari
are no longer allowed under Section 4, Rule 65 of the
Rules of Court, as amended by A.M. No. 07-7-12-SC
dated December 4, 2007. 7 This was denied in a
resolution dated October 22, 2008. According to the
appellate court, while the amendment of the third
paragraph of Section 4, Rule 65 admittedly calls for
stricter application to discourage the filing of
unwarranted motions for extension of time, it did not
strip the Court of Appeals of the discretionary power
to grant a motion for extension in exceptional cases to
serve the ends of justice.
Aggrieved, LMC now assails the resolutions dated
August 7, 2008 and October 22, 2008 of the Court of
Appeals in this petition for certiorari under Rule 65
of the Rules of Court. It contends that the Court of
Appeals committed grave abuse of discretion when it
granted private respondents' motion for extension of
time to file petition for certiorari as the Court of
Appeals had no power to grant something that had
already been expressly deleted from the rules.
We agree.
Rules of procedure must be faithfully complied with
and should not be discarded with the mere expediency
of claiming substantial merit. 8 As a corollary, rules
prescribing the time for doing specific acts or for
taking certain proceedings are considered absolutely
indispensable to prevent needless delays and to
orderly and promptly discharge judicial business. By
their very nature, these rules are regarded as
mandatory. 9
In De Los Santos v. Court of Appeals, 10 we ruled:
cCESTA
Section 4 of Rule 65 prescribes a period
of 60 days within which to file a
petition for certiorari. The 60-day
period is deemed reasonable and
sufficient time for a party to mull
over and to prepare a petition
asserting grave abuse of discretion by
a lower court. The period was
specifically set to avoid any
unreasonable delay that would
violate the constitutional rights of the
parties to a speedy disposition of
their case. (emphasis supplied)
While the proper courts previously had discretion to
extend the period for filing a petition for certiorari
beyond the 60-day period, 11 the amendments to Rule
65 under A.M. No. 07-7-12-SC disallowed extensions
of time to file a petition for certiorari with the
deletion of the paragraph that previously permitted
such extensions.
Section 4, Rule 65 previously read:
SEC. 4.When and where petition filed.
The petition shall be filed not later
than sixty (60) days from notice of the
judgment or resolution. In case a
motion for reconsideration or new trial
is timely filed, whether such motion is
required or not, the sixty (60) day
period shall be counted from notice of
the denial of said motion.
The petition shall be filed in the
Supreme Court or, if it relates to the
acts or omissions of a lower court or of
a corporation, board, officer or person,
in the Regional Trial Court exercising
jurisdiction over the territorial area as
defined by the Supreme Court. It may
also be filed in the Court of Appeals
whether or not the same is in aid of its
appellate jurisdiction, or in the
Sandiganbayan if it is in aid of its
appellate jurisdiction. If it involves the
acts or omissions of a quasi-judicial
agency, and unless otherwise provided
by law or these rules, the petition shall
be filed in and cognizable only by the
Court of Appeals.
No extension of time to file the
petition shall be granted except for
compelling reason and in no case
exceeding 15 days. 12 (emphasis
supplied)
With its amendment under A.M. No. 07-7-12-SC, it
now reads: CDISAc
SEC. 4.When and where to file petition.
The petition shall be filed not later
than sixty (60) days from notice of the
judgment or resolution. In case a
motion for reconsideration or new trial
is timely filed, whether such motion is
required or not, the sixty (60) day
period shall be counted from the notice
of the denial of the motion.
If the petition relates to an act or an
omission of a municipal trial court or of
a corporation, a board, an officer or a
person, it shall be filed with the
Regional Trial Court exercising
jurisdiction over the territorial area as
defined by the Supreme Court. It may
also be filed in the Court of Appeals or
with the Sandiganbayan, whether or not
the same is in aid of the court's
appellate jurisdiction. If the petition
involves an act or an omission of a
quasi-judicial agency, unless otherwise
provided by law or these rules, the
petition shall be filed with and be
cognizable only by the Court of
Appeals.
In election cases involving an act or
omission of a municipal or a regional
trial court, the petition shall be filed
exclusively with the Commission on
Elections, in aid of its appellate
jurisdiction. EASCDH
As a rule, an amendment by the deletion of certain
words or phrases indicates an intention to change its
meaning. It is presumed that the deletion would not
have been made if there had been no intention to
effect a change in the meaning of the law or rule. The
amended law or rule should accordingly be given a
construction different from that previous to its
amendment. 13
If the Court intended to retain the authority of the
proper courts to grant extensions under Section 4 of
Rule 65, the paragraph providing for such authority
would have been preserved. The removal of the said
paragraph under the amendment by A.M. No. 07-7-
12-SC of Section 4, Rule 65 simply meant that there
can no longer be any extension of the 60-day period
within which to file a petition for certiorari.
The rationale for the amendments under A.M. No. 07-
7-12-SC is essentially to prevent the use (or abuse) of
the petition for certiorari under Rule 65 to delay a
case or even defeat the ends of justice. Deleting the
paragraph allowing extensions to file petition on
compelling grounds did away with the filing of such
motions. As the Rule now stands, petitions for
certiorari must be filed strictly within 60 days from
notice of judgment or from the order denying a
motion for reconsideration. ESIcaC
In granting the private respondents' motion for
extension of time to file petition for certiorari, the
Court of Appeals disregarded A.M. No. 07-7-12-SC.
The action amounted to a modification, if not outright
reversal, by the Court of Appeals of A.M. No. 07-7-
12-SC. In so doing, the Court of Appeals arrogated to
itself a power it did not possess, a power that only this
Court may exercise. 14 For this reason, the challenged
resolutions dated August 7, 2008 and October 22,
2008 were invalid as they were rendered by the Court
of Appeals in excess of its jurisdiction.
Even assuming that the Court of Appeals retained the
discretion to grant extensions of time to file a petition
for certiorari for compelling reasons, the reasons
proffered by private respondents' counsel did not
qualify as compelling. Heavy workload is relative and
often self-serving. 15 Standing alone, it is not a
sufficient reason to deviate from the 60-day rule. 16
As to the other ground cited by private respondents'
counsel, suffice it to say that it was a bare allegation
unsubstantiated by any proof or affidavit of merit.
Besides, they could have filed the petition on time
with a motion to be allowed to litigate in forma
pauperis. While social justice requires that the law
look tenderly on the disadvantaged sectors of society,
neither the rich nor the poor has a license to disregard
rules of procedure. The fundamental rule of human
relations enjoins everyone, regardless of standing in
life, to duly observe procedural rules as an aspect of
acting with justice, giving everyone his due and
observing honesty and good faith. 17 For indeed,
while technicalities should not unduly hamper our
quest for justice, orderly procedure is essential to the
success of that quest to which all courts are devoted.
18 DHESca
WHEREFORE, the petition is hereby GRANTED.
The resolutions dated August 7, 2008 and October 22,
2008 of the Court of Appeals in CA-G.R. SP No.
104510 are REVERSED and SET ASIDE and the
petition in the said case is ordered DISMISSED for
having been filed out of time.
SO ORDERED.
Puno, C.J., Carpio, Leonardo-de Castro and
Bersamin, JJ., concur.
Footnotes
1.In particular, Caalam and Esguerra who were
allegedly employed with LMC as a machine
operator and an inspector, respectively, filed a
case for illegal dismissal, regularization and
non-payment of service incentive leave with
claims for full backwages and payment of
moral and exemplary damages and attorney's
fees against LMC.

2.Annex "D" of petition. Rollo, pp. 26-29.
3.Specifically, the motion cited "lack of material
time occasioned by voluminous pleadings that
have to be written and numerous court
appearances to be undertaken" by private
respondents' counsel and "lack of funds" on
the part of the private respondents as the
reasons in support thereof. Id., pp. 26-27.
4.The last day of the 60-day period was on July 25,
2008, the day the motion was filed.
5.Supra note 2, p. 27. The case was docketed as CA-
G.R. SP No. 104510.
6.Penned by Associate Justice Normandie B. Pizarro
and concurred in by Associate Justices
Edgardo P. Cruz (retired) and Fernanda
Lampas Peralta of the Seventh Division of the
Court of Appeals. Rollo, p. 18.
7.The amendments took effect on December 27,
2007.
8.Yutingco v. Court of Appeals, 435 Phil. 83 (2002).
9.Gonzales v. Torres, A.M. No. MTJ-06-1653, 30
July 2007, 528 SCRA 490.
10.G.R. 147912, 26 April 2006, 488 SCRA 351,
citing Yutingco v. Court of Appeals, supra.
11.Per A.M. No. 00-2-03-SC effective September 1,
2000.
12.Id.
13.See Niere v. Court of First Instance of Negros
Occidental, Br. II, 153 Phil. 450 (1973).
14.See Section 5 (5), Article VIII, Constitution.
15.Yutingco v. Court of Appeals, supra.
16.Id.
17.See Article 19, Civil Code.
18.Yutingco v. Court of Appeals, supra.











EN BANC
[G.R. No. 182382-83. February 24, 2010.]
JAIME S. DOMDOM, petitioner, vs.
HON. THIRD AND FIFTH
DIVISIONS OF THE
SANDIGANBAYAN,
COMMISSION ON AUDIT and
THE PEOPLE OF THE
PHILIPPINES, respondents.
DECISION
CARPIO MORALES, J p:
By Affidavit of February 15, 2002, Hilconeda P.
Abril, State Auditor V of the Commission on Audit
(COA) assigned at the Philippine Crop Insurance
Corporation (PCIC), requested the Office of the
Ombudsman to conduct a preliminary investigation on
the transactions-bases of the claims of Jaime S.
Domdom (petitioner) for miscellaneous and
extraordinary expenses as a Director of PCIC, the
receipts covering which were alleged to be tampered.
1
After preliminary investigation, the Office of the
Ombudsman found probable cause to charge
petitioner with nine counts of estafa through
falsification of documents in view of irregularities in
nine supporting receipts for his claims for
miscellaneous and extraordinary expenses, after
verification with the establishments he had transacted
with. It thus directed the filing of the appropriate
Informations with the Sandiganbayan. 2
The Informations were separately raffled and lodged
among the five divisions of the Sandiganbayan. The
First, Second and Fifth Divisions granted petitioner's
Motions for Consolidation of the cases raffled to them
with that having the lowest docket number, SB-07-
CRM-0052, which was raffled to the Third Division.
3
The Sandiganbayan Third Division disallowed the
consolidation, however, by Resolutions dated
February 12 and May 8, 2008, it holding mainly that
the evidence in the cases sought to be consolidated
differed 4 from that to be presented in the one which
bore the lowest docket number. It is gathered from the
records that the Sandiganbayan Fourth Division also
denied petitioner's Motion for Consolidation. 5
Petitioner thus seeks relief from this Court via the
present Petition for Certiorari, with prayer for
temporary restraining order (TRO) and/or writ of
preliminary injunction, to enjoin the different
divisions of the Sandiganbayan from further
proceeding with the cases against him during the
pendency of this petition. 6 ISCTcH
Petitioner argues that, among other things, all the
cases against him arose from substantially identical
series of transactions involving alleged overstatements
of miscellaneous and extraordinary expenses.
Respondent People of the Philippines (People), in its
Comment, 7 counters that petitioner failed to file a
motion for reconsideration which is a condition
precedent to the filing of a petition for certiorari; that
the petition was filed out of time since a motion for
extension to file such kind of a petition is no longer
allowed; that consolidation is a matter of judicial
discretion; and that the proceedings in the different
divisions of the Sandiganbayan may proceed
independently as the Informations charged separate
crimes committed on separate occasions.
In the meantime, the Court issued a TRO 8 enjoining
all divisions of the Sandiganbayan from further
proceeding with the trial of the cases against
petitioner until further orders.
Prefatorily, the People raises procedural questions
which the Court shall first address.
Concededly, the settled rule is that a motion for
reconsideration is a condition sine qua non for the
filing of a petition for certiorari, its purpose being to
grant an opportunity for the court a quo to correct any
actual or perceived error attributed to it by a re-
examination of the legal and factual circumstances of
the case. 9
The rule is, however, circumscribed by well-defined
exceptions, such as where the order is a patent nullity
because the court a quo had no jurisdiction; where the
questions raised in the certiorari proceeding have
been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon
in the lower court; where there is an urgent necessity
for the resolution of the question, and any further
delay would prejudice the interests of the
Government or of the petitioner, or the subject matter
of the action is perishable; where, under the
circumstances, a motion for reconsideration would be
useless; where the petitioner was deprived of due
process and there is extreme urgency for relief; where,
in a criminal case, relief from an order of arrest is
urgent and the grant of such relief by the trial court is
improbable; where the proceedings in the lower court
are a nullity for lack of due process; where the
proceedings were ex parte or in which the petitioner
had no opportunity to object; and where the issue
raised is one purely of law or where public interest is
involved. 10
The Court finds that the issue raised by petitioner
had been duly raised and passed upon by the
Sandiganbayan Third Division, it having denied
consolidation in two resolutions; that the issue calls
for resolution and any further delay would
prejudice the interests of petitioner; and that the
issue raised is one purely of law, the facts not being
contested. There is thus ample justification for
relaxing the rule requiring the prior filing of a motion
for reconsideration. aSTHDc
On the People's argument that a motion for extension
of time to file a petition for certiorari is no longer
allowed, the same rests on shaky grounds.
Supposedly, the deletion of the following provision in
Section 4 of Rule 65 by A.M. No. 07-7-12-SC 11
evinces an intention to absolutely prohibit motions for
extension:
"No extension of time to file the
petition shall be granted except for the
most compelling reason and in no case
exceeding fifteen (15) days."
The full text of Section 4 of Rule 65, as amended by
A.M. No. 07-7-12-SC, reads:
Sec. 4. When and where to file the
petition. The petition shall be filed
not later than sixty (60) days from
notice of the judgment, order or
resolution. In case a motion for
reconsideration or new trial is timely
filed, whether such motion is required
or not, the petition shall be filed not
later than sixty (60) days counted from
the notice of the denial of the motion.
If the petition relates to an act or an
omission of a municipal trial court or of
a corporation, a board, an officer or a
person, it shall be filed with the
Regional Trial Court exercising
jurisdiction over the territorial area as
defined by the Supreme Court. It may
also be filed with the Court of Appeals
or with the Sandiganbayan, whether or
not the same is in aid of the court's
appellate jurisdiction. If the petition
involves an act or an omission of a
quasi-judicial agency, unless otherwise
provided by law or these rules, the
petition shall be filed with and be
cognizable only by the Court of
Appeals.
In election cases involving an act or an
omission of a municipal or a regional
trial court, the petition shall be filed
exclusively with the Commission on
Elections, in aid of its appellate
jurisdiction. (underscoring supplied)
That no mention is made in the above-quoted
amended Section 4 of Rule 65 of a motion for
extension, unlike in the previous formulation, does
not make the filing of such pleading absolutely
prohibited. If such were the intention, the deleted
portion could just have simply been reworded to state
that "no extension of time to file the petition shall be
granted." Absent such a prohibition, motions for
extension are allowed, subject to the Court's sound
discretion. The present petition may thus be allowed,
having been filed within the extension sought and, at
all events, given its merits.
In Teston v. Development Bank of the Philippines, 12
the Court laid down the requisites for the
consolidation of cases, viz.:
A court may order several actions
pending before it to be tried together
where they arise from the same act,
event or transaction, involve the
same or like issues, and depend
largely or substantially on the same
evidence, provided that the court has
jurisdiction over the cases to be
consolidated and that a joint trial will
not give one party an undue advantage
or prejudice the substantial rights of
any of the parties. (emphasis and
underscoring supplied.) DETcAH
The rule allowing consolidation is designed to avoid
multiplicity of suits, to guard against oppression or
abuse, to prevent delays, to clear congested dockets,
and to simplify the work of the trial court in short,
the attainment of justice with the least expense and
vexation to the parties-litigants.
Thus, in Philippine Savings Bank v. Maalac, Jr., 13
the Court disregarded the technical difference
between an action and a proceeding, and upheld the
consolidation of a petition for the issuance of a writ of
possession with an ordinary civil action in order to
achieve a more expeditious resolution of the cases.
In the present case, it would be more in keeping with
law and equity if all the cases filed against petitioner
were consolidated with that having the lowest docket
number pending with the Third Division of the
Sandiganbayan. The only notable differences in these
cases lie in the date of the transaction, the entity
transacted with and amount involved. The charge and
core element are the same estafa through
falsification of documents based on alleged
overstatements of claims for miscellaneous and
extraordinary expenses. Notably, the main witness is
also the same Hilconeda P. Abril.
It need not be underscored that consolidation of cases,
when proper, results in the simplification of
proceedings which saves time, the resources of the
parties and the courts, and a possible major
abbreviation of trial. It contributes to the swift
dispensation of justice, and is in accord with the aim
of affording the parties a just, speedy and inexpensive
determination of their cases before the courts. Above
all, consolidation avoids the possibility of rendering
conflicting decisions in two or more cases which
would otherwise require a single judgment. 14
WHEREFORE, the petition is GRANTED. The
Third Division of the Sandiganbayan is DIRECTED
to allow the consolidation of the cases against
petitioner for estafa through falsification of
documents with SB-07-CRM-0052, which has the
lowest docket number pending with it. All other
Divisions of the Sandiganbayan are accordingly
ORDERED to forward the subject cases to the Third
Division.
SO ORDERED.
Puno, C.J., Carpio, Corona, Velasco, Jr., Nachura,
Leonardo-de Castro, Brion, Peralta, Bersamin, Del
Castillo, Abad, Villarama, Jr., Perez and Mendoza,
JJ., concur.
Footnotes
1. Rollo, pp. 22-23.
2. Id. at 52-66.
3. Id. at 96-102, 122, 213-214.
4. Id. at 112, 232.
5. Id. at 313-314.
6. Id. at 9-21, 124-142.
7. Id. at 272-291.
8. Resolutions of September 2, 2008 and February
24, 2009; rollo, pp. 298-300, 315.
9. Estate of Salvador Serra Serra v. Heirs of
Primitivo Hernaez, G.R. No. 142913, August
9, 2005, 466 SCRA 120, 127.
10. Tan v. Court of Appeals, 341 Phil. 570, 576-578
(1997).
11. Amendments to Rules 41, 45, 58 and 65 of the
Rules of Court; adopted on December 4,
2007.
12. G.R. No. 144374, November 11, 2005, 474
SCRA 597, 605.
13. G.R. No. 145441, April 26, 2005, 457 SCRA
203, 213-214.
14. Yu, Sr. v. Basilio G. Magno Construction and
Development Enterprises, Inc., G.R. Nos.
138701-02, October 17, 2006, 504 SCRA
618, 633.















EN BANC
[G.R. No. 130866. September 16, 1998.]
ST. MARTIN FUNERAL HOME,
petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and
BIENVENIDO ARICAYOS,
respondents.
Isagani M. Jungco for petitioner.
Sebastinian Office of Legal Aid for private
respondent.
SYNOPSIS
This is a case of an illegal dismissal filed by private
respondent Bienvenido Aricayos against St. Martin
Funeral Home. The Labor Arbiter ruled in favor of St.
Martin Funeral Home declaring that there was no
employer-employee relationship that existed between
the parties, and therefore, his office had no
jurisdiction over the case. On appeal, the National
Labor Relations Commission rendered a resolution
setting aside the questioned decision and remanding
the case to the labor arbiter for immediate appropriate
proceedings. After the motion for reconsideration of
the herein petitioner was denied, it filed before this
Court the instant petition for certiorari. cdasia
The Court, instead of going to the merits of the case,
discussed the mode of judicial review with respect to
decisions of the National Labor Relations
Commission pursuant to the provisions of Presidential
Decree No. 442 (Labor Code of the Philippines) and
Batas Pambansa Blg. 129 (The Judiciary
Reorganization Act of 1980).
In remanding this case to the Court of Appeals, the
Court ruled that while it does not wish to intrude into
the congressional sphere on the matter of the wisdom
of a law, it further observed that there is a growing
number of labor cases being elevated to the court
which, not being a trier of facts, 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 the 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 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. aECTcA
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTION;
CERTIORARI; REGLEMENTARY PERIOD; SIXTY
DAYS DESPITE LAPSE OF THE 10-DAY PERIOD
FOR FINALITY OF THE DECISION OF THE
NLRC. . . . the remedy of the aggrieved party is to
timely file a motion for reconsideration as a
precondition for any further or subsequent remedy,
and then seasonably avail of the special civil action of
certiorari under Rule 65, for which said Rule has now
fixed the reglementary period of sixty days from
notice of the decision. Curiously, although the 10-day
period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of
the Labor Code, it has been held that this Court may
still take cognizance of the petition for certiorari on
jurisdictional and due process considerations if filed
within the reglementary period under Rule 65.
2. ID.; ID.; ID.; MODE OF JUDICIAL REVIEW
OVER DECISIONS OF THE NLRC. 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 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.
SAEHaC
D E C I S I O N
REGALADO, J p:
The present petition for certiorari stemmed
from a complaint for illegal dismissal filed by
herein private respondent before the National
Labor Relations Commission (NLRC), Regional
Arbitration Branch No. III, in San Fernando,
Pampanga. Private respondent alleges that he
started working as Operations Manager of
petitioner St. Martin Funeral Home on February 6,
1995. However, there was no contract of
employment executed between him and petitioner
nor was his name included in the semi-monthly
payroll. On January 22, 1996, he was dismissed
from his employment for allegedly
misappropriating P38,000.00 which was intended
for payment by petitioner of its value added tax
(VAT) to the Bureau of Internal Revenue (BIR). 1
Petitioner on the other hand claims that
private respondent was not its employee but only
the uncle of Amelita Malabed, the owner of
petitioner St. Martin's Funeral Home. Sometime in
1995, private respondent, who was formerly
working as an overseas contract worker, asked for
financial assistance from the mother of Amelita.
Since then, as an indication of gratitude, private
respondent voluntarily helped the mother of
Amelita in overseeing the business.
In January 1996, the mother of Amelita
passed away, so the latter then took over the
management of the business. She then discovered
that there were arrears in the payment of taxes and
other government fees, although the records
purported to show that the same were already paid.
Amelita then made some changes in the business
operation and private respondent and his wife were
no longer allowed to participate in the
management thereof. As a consequence, the latter
filed a complaint charging that petitioner had
illegally terminated his employment. 2 Cdpr
Based on the position papers of the parties,
the labor arbiter rendered a decision in favor of
petitioner on October 25, 1996 declaring that no
employer-employee relationship existed between
the parties and, therefore, his office had no
jurisdiction over the case. 3
Not satisfied with the said decision, private
respondent appealed to the NLRC contending that
the labor arbiter erred (1) in not giving credence to
the evidence submitted by him; (2) in holding that
he worked as a "volunteer and not as an employee
of St. Martin Funeral Home from February 6, 1995
to January 23, 1996, or a period of about one year;
and (3) in ruling that there was no employer-
employee relationship between him and petitioner.
4
On June 13, 1997, the NLRC rendered a
resolution setting aside the questioned decision and
remanding the case to the labor arbiter for
immediate appropriate proceedings. 5 Petitioner
then filed a motion for reconsideration which was
denied by the NLRC in its resolution dated August
18, 1997 for lack of merit, 6 hence the present
petition alleging that the NLRC committed grave
abuse of discretion. 7
Before proceeding further into the merits of
the case at bar, the Court feels that it is now
exigent and opportune to reexamine the functional
validity and systemic practicability of the mode of
judicial review it has long adopted and still follows
with respect to decisions of the NLRC. The
increasing number of labor disputes that find their
way to this Court and the legislative changes
introduced over the years into the provisions of
Presidential Decree (P.D.) No. 442 (The Labor
Code of the Philippines and Batas Pambansa Blg.
(B.P. No.) 129 (The Judiciary Reorganization Act
of 1980) now stridently call for and warrant a
reassessment of that procedural aspect.
We prefatorily delve into the legal history of
the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October
14, 1972, and its decisions were expressly declared
to be appealable to the Secretary of Labor and,
ultimately, to the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the
Labor Code of the Philippines, the same to take
effect six months after its promulgation. 8 Created
and regulated therein is the present NLRC which
was attached to the Department of Labor and
Employment for program and policy coordination
only. 9 Initially, Article 302 (now, Article 223)
thereof also granted an aggrieved party the remedy
of appeal from the decision of the NLRC to the
Secretary of Labor, but P.D. No. 1391
subsequently amended said provision and
abolished such appeals. No appellate review has
since then been provided for.
Thus, to repeat, under the present state of the
law, there is no provision for appeals from the
decision of the NLRC. 10 The present Section 223,
as last amended by Section 12 of R.A. No. 6715,
instead merely provides that the Commission shall
decide all cases within twenty days from receipt of
the answer of the appellee, and that such decision
shall be final and executory after ten calendar days
from receipt thereof by the parties.
When the issue was raised in an early case
on the argument that this Court has no jurisdiction
to review the decisions of the NLRC, and formerly
of the Secretary of Labor, since there is no legal
provision for appellate review thereof, the Court
nevertheless rejected that thesis. It held that there
is an underlying power of the courts to scrutinize
the acts of such agencies on questions of law and
jurisdiction even though no right of review is given
by statute; that the purpose of judicial review is to
keep the administrative agency within its
jurisdiction and protect the substantial rights of the
parties; and that it is that part of the checks and
balances which restricts the separation of powers
and forestalls arbitrary and unjust adjudications. 11
Pursuant to such ruling, and as sanctioned
by subsequent decisions of this Court, the remedy
of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or
subsequent remedy, 12 and then seasonably avail
of the special civil action of certiorari under Rule
65, 13 for which said Rule has now fixed the
reglementary .period of sixty days from notice of
the decision. Curiously, although the 10-day period
for finality of the decision of the NLRC may
already have lapsed as contemplated in Section
223 of the Labor Code, it has been held that this
Court may still take cognizance of the petition for
certiorari on jurisdictional and due process
considerations if filed within the reglementary
period under Rule 65. 14

Turning now to the matter of judicial review
of NLRC decisions, B.P. No. 129 originally
provided as follows:
SEC. 9. Jurisdiction. The
Intermediate Appellate Court shall
exercise:
(1) Original jurisdiction to issue writs
of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and
auxiliary writs or processes, whether or
not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over
actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over
all final judgments, decisions,
resolutions, orders, or awards of
Regional Trial Courts and quasi-
judicial agencies, instrumentalities,
boards, or commissions, except those
falling within the appellate jurisdiction
of the Supreme Court in accordance
with the Constitution, the provisions of
this Act, and of subparagraph (1) of the
third paragraph and subparagraph (4) of
the fourth paragraph of Section 17 of
the Judiciary Act of 1948.
The Intermediate Appellate Court shall
have the power to try cases and conduct
hearings, receive evidence and perform
any and all acts necessary to resolve
factual issues raised in cases falling
within its original and appellate
jurisdiction, including the power to
grant and conduct new trials or further
proceedings.
These provisions shall not apply to
decisions and interlocutory orders
issued under the Labor Code of the
Philippines and by the Central Board of
Assessment Appeals. 15
Subsequently, and as it presently reads, this
provision was amended by R.A. No. 7902 effective
March 18, 1995, to wit:
SEC. 9. Jurisdiction. The Court of
Appeals shall exercise:
(1) Original jurisdiction to issue writs
of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and
auxiliary writs or processes, whether or
not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over
actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over
all final judgments, decisions,
resolutions, orders or awards of
Regional Trial Courts and quasi-
judicial agencies, instrumentalities,
boards or commissions, including the
Securities and Exchange Commission,
the Social Security Commission, the
Employees Compensation Commission
and the Civil Service Commission,
except those falling within the appellate
jurisdiction of the Supreme Court in
accordance with the Constitution, the
Labor Code of the Philippines under
Presidential Decree No. 442, as
amended, the provisions of this Act,
and of subparagraph (1) of the third
paragraph and subparagraph (4) of the
fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Court of Appeals shall have the
power to try cases and conduct hearings
receive evidence and perform any and
all acts necessary to resolve factual
issues raised in cases falling within its
original and appellate jurisdiction,
including the power to grant and
conduct new trials or further
proceedings. Trials or hearings in the
Court of Appeals must be continuous
and must be completed within, three (3)
months, unless extended by the Chief
Justice."
It will readily be observed that, aside from
the change in the name of the lower appellate
court, 16 the following amendments of the original
provisions of Section 9 of B.P. No. 129 were
effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its
application to the Labor Code of the Philippines
and the Central Board of Assessment Appeals was
deleted and replaced by a new paragraph granting
the Court of Appeals limited powers to conduct
trials and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that
last paragraph was transposed to paragraph (3) of
the section, such that the original exclusionary
clause therein now provides "except those falling
within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this
Act, and of subparagraph (1) of the third paragraph
and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948."
(Emphasis supplied)
3. Contrarily, however, specifically added to
and included among the quasi-judicial agencies
over which the Court of Appeals shall have
exclusive appellate jurisdiction are the Securities
and Exchange Commission, the Social Security
Commission, the Employees Compensation
Commission and the Civil Service Commission.
This, then, brings us to a somewhat
perplexing impass, both in point of purpose and
terminology. As earlier explained, our mode of
judicial review over decisions of the NLRC has for
some time now been understood to be by a petition
for certiorari under Rule 65 of the Rules of Court.
This is, of course, a special original action limited
to the resolution of jurisdictional issues, that is,
lack or excess of jurisdiction and, in almost all
cases that have been brought to us, grave abuse of
discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3),
Section 9 of B.P. No. 129 now grants exclusive
appellate jurisdiction to the Court of Appeals over
all final adjudications of the Regional Trial Courts
and the quasi-judicial agencies generally or
specifically referred to therein except, among
others, "those falling within the appellate
jurisdiction of the Supreme Court in accordance
with . . . the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, . . ."
This would necessarily contradict what has been
ruled and said all along that appeal does not lie
from decisions of the NLRC 17 Yet, under such
excepting clause literally construed, the appeal
from the NLRC cannot be brought to the Court of
Appeals, but to this Court by necessary
implication.
The same exceptive clause further confuses
the situation by declaring that the Court of Appeals
has no appellate jurisdiction over decisions falling
within the appellate jurisdiction of the Supreme
Court in accordance with the Constitution, the
provisions of B. P. No. 129, and those specified
cases in Section 17 of the Judiciary Act of 1948.
These cases can, of course, be properly excluded
from the exclusive appellate jurisdiction of the
Court of Appeals. However, because of the
aforementioned amendment by transposition, also
supposedly excluded are cases falling within the
appellate jurisdiction of the Supreme Court in
accordance with the Labor Code. This is illogical
and impracticable, and Congress could not have
intended that procedural gaffe, since there are no
cases in the Labor Code the decisions, resolutions,
orders or awards wherein are within the appellate
jurisdiction of the Supreme Court or of any other
court for that matter. LibLex
A review of the legislative records on the
antecedents of R A. No. 7902 persuades us that
there may have been an oversight in the course of
the deliberations on the said Act or an imprecision
in the terminology used therein. In fine, Congress
did intend to provide for judicial review of the
adjudications of the NLRC in labor cases by the
Supreme Court, but there was an inaccuracy in the
term used for the intended mode of review. This
conclusion which we have reluctantly but
prudently arrived at has been drawn from the
considerations extant in the records of Congress,
more particularly on Senate Bill No. 1495 and the
Reference Committee Report on S. No. 1495/H.
No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator
Raul S. Roco delivered his sponsorship speech 19
from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr.
President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at
the same time expanded its jurisdiction
and powers. Among others, its
appellate jurisdiction was expanded to
cover not only final judgment of
Regional Trial Courts, but also all final
judgment(s), decisions, resolutions,
orders or awards of quasi-judicial
agencies, instrumentalities, boards and
commissions, except those falling
within the appellate jurisdiction of the
Supreme Court in accordance with the
Constitution, the provisions of BP Blg.
129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of
Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is
to ease the workload of the Supreme
Court by the transfer of some of its
burden of review of factual issues to the
Court of Appeals. However, whatever
benefits that can be derived from the
expansion of the appellate jurisdiction
of the Court of Appeals was cut short
by the last paragraph of Section 9 of
Batas Pambansa Blg. 129 which
excludes from its coverage the
"decisions and interlocutory orders
issued under the Labor Code of the
Philippines and by the Central Board of
Assessment Appeals."
Among the highest number of cases
that are brought up to the Supreme
Court are labor cases. Hence, Senate
Bill No. 1495 seeks to eliminate the
exceptions enumerated in Section 9
and, additionally, extends the coverage
of appellate review of the Court of
Appeals in the decision(s) of the
Securities and Exchange Commission,
the Social Security Commission, and
the Employees Compensation
Commission to reduce the number of
cases elevated to the Supreme Court.
(Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our
distinguished Colleague from Laguna
provides the ideal situation of
drastically reducing the workload of the
Supreme Court without depriving the
litigants of the privilege of review by
an appellate tribunal.
In closing, allow me to quote the
observations of former Chief Justice
Teehankee in 1986 in the Annual
Report of the Supreme Court:
. . . Amendatory legislation is
suggested so as to relieve the
Supreme Court of the burden of
reviewing these cases which
present no important issues
involved beyond the particular
fact and the parties involved, so
that the Supreme Court may
wholly devote its time to cases of
public interest in the discharge of
its mandated task as the guardian
of the Constitution and the
guarantor of the people's basic
rights and additional task
expressly vested on it now "to
determine whether or not there
has been a grave abuse of
discretion amounting to lack of
jurisdiction on the part of any
branch or instrumentality of the
Government."

We used to have 500,000 cases pending
all over the land, Mr. President. It has
been cut down to 300,000 cases some
five years ago. I understand we are now
back to 400,000 cases. Unless we
distribute the work of the appellate
courts, we shall continue to mount and
add to the number of cases pending.
In view of the foregoing, Mr. President,
and by virtue of all the reasons we have
submitted, the Committee on Justice
and Human Rights requests the support
and collegial approval of our Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent
session, the following Committee Amendment was
introduced by the said sponsor and the following
proceedings transpired: 20
Senator Roco. On page 2, line 5, after
the line "Supreme Court in accordance
with the Constitution," add the phrase "
THE LABOR CODE OF THE
PHILIPPINES UNDER P.D. 442, AS
AMENDED." So that it becomes clear,
Mr. President, that issues arising from
the Labor Code will still be appealable
to the Supreme Court.
The President. Is there any objection?
(Silence) Hearing none, the amendment
is approved.
Senator Roco. On the same page, we
move that lines 25 to 30 be deleted.
This was also discussed with our
Colleagues in the House of
Representatives and as we understand
it, as approved in the House, this was
also deleted, Mr. President.
The President. Is there any objection?
(Silence) Hearing none, the amendment
is approved.
Senator Roco. There are no further
Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move
that we close the period of Committee
amendments.
The President. Is there any objection?
(Silence) Hearing none, the amendment
is approved. (Emphasis supplied)
xxx xxx xxx
Thereafter, since there were no individual
amendments, Senate Bill No. 1495 was passed on
second reading and being a certified bill, its
unanimous approval on third reading followed. 21
The Conference Committee Report on Senate Bill
No. 1495 and House Bill No. 10452, having
theretofore been approved by the House of
Representatives, the same was likewise approved
by the Senate on February 20, 1995, 22 inclusive
of the dubious formulation on appeals to the
Supreme Court earlier discussed.
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. The use
of the word "appeal" in relation thereto and in the
instances we have noted could have been a lapsus
plumae because appeals by certiorari and the
original action for certiorari are both modes of
judicial review addressed to the appellate courts.
The important distinction between them, however,
and with which the Court is particularly concerned
here is that the special civil action of certiorari is
within the concurrent original jurisdiction of this
Court and the Court of Appeals; 23 whereas to
indulge in the assumption that appeals by certiorari
to the Supreme Court are allowed would not
subserve, but would subvert, the intention of
Congress as expressed in the sponsorship speech
on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor
therein that some quarters were of the opinion that
recourse from the NLRC to the Court of Appeals
as an initial step in the process of judicial review
would be circuitous and would prolong the
proceedings. On the contrary, as he commendably
and realistically emphasized, that procedure would
be advantageous to the aggrieved party on this
reasoning:
On the other hand, Mr. President, to
allow these cases to be appealed to the
Court of Appeals would give litigants
the advantage to have all the evidence
on record be reexamined and reweighed
after which the findings of facts and
conclusions of said bodies are
correspondingly affirmed, modified or
reversed.
Under such guarantee, the Supreme
Court can then apply strictly the axiom
that factual findings of the Court of
Appeals are final and may not be
reversed on appeal to the Supreme
Court. A perusal of the records will
reveal appeals which are factual in
nature and may, therefore, be dismissed
outright by minute resolutions. 24
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 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.
Apropos to this directive that resort to the
higher courts should be made in accordance with
their hierarchical order, this pronouncement in
Santiago vs. Vasquez, et al. 25 should be taken into
account:
One final observation. We discern in
the proceedings in this case a
propensity on the part of petitioner,
and, for that matter, the same may be
said of a number of litigants who
initiate recourses before us, to disregard
the hierarchy of courts in our judicial
system by seeking relief directly from
this Court despite the fact that the same
is available in the lower courts in the
exercise of their original or concurrent
jurisdiction, or is even mandated by law
to be sought therein. This practice must
be stopped, not only because of the
imposition upon the precious time of
this Court but also because of the
inevitable and resultant delay, intended
or otherwise, in the adjudication of the
case which often has to be remanded or
referred to the lower court as the proper
forum under the rules of procedure, or
as better equipped to resolve the issues
since this Court is not a trier of facts.
We, therefore, 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.
WHEREFORE, under the foregoing
premises, the instant petition for certiorari is
hereby REMANDED, and all pertinent records
thereof ordered to be FORWARDED, to the Court
of Appeals for appropriate action and disposition
consistent with the views and ruling herein set
forth, without pronouncement as to costs. cdasia
SO ORDERED.
Narvasa, C .J ., Davide, Jr., Romero, Bellosillo, Melo,
Puno, Vitug, Kapunan, Mendoza, Panganiban,
Martinez, Quisumbing and Purisima, JJ ., concur.
Footnotes
1. Rollo, 17.
2. Ibid., 18-19.
3. Ibid., 19.
4. Ibid., 16.
5. Ibid., 21.
6. Ibid., 23-24.
7. Ibid., 6.
8. Article 2.
9. Article 213.
10. While Art. 223 bears the epigraph of "Appeal," it
actually refers only to decisions, awards, or
orders of the labor arbiter which shall be final
and executory unless appealed to the NLRC
by any or both parties within ten calendar
days from receipt thereof.
11. San Miguel Corporation vs. Secretary of Labor,
et al., G.R. No. L-39195, May 15, 1975, 64
SCRA 56; Scott vs. Inciong, et al., G.R. No.
L-38868, December 29, 1975, 68 SCRA 473;
Bordeos, et al., vs. NLRC, et al., G.R. Nos.
115314-23, September 26, 1996, 262 SCRA
424.
12. Zapata vs. NLRC, et al., G.R. No. 77827, July 5,
1989, 175 SCRA 56.
13. See, for instance, Pure Foods Corporation vs.
NLRC, et al., G.R. No. 78591, March 21,
1989, 171 SCRA 415.
14. Mantrade, etc. vs. Bacungan, et al., G.R. No. L-
48437, September 30, 1986, 144 SCRA 511.
15. 75 O.G. 4781, August 29, 1983.
16. Executive Order No. 33 restored the name of the
Court of Appeals, in lieu of the intermediate
Appellate Court, effective July 28, 1986.
17. The different modes of appeal, that is, by writ of
error (Rule 41), petition for review (Rules 42
and 43), and petition for review on certiorari
(Rule 45) obviously cannot be availed of
because there is no provision for appellate
review of NLRC decisions in P.D. No. 442, as
amended.
18. An Act Expanding the Jurisdiction of the Court
of Appeals, Amending for the Purpose
Section 9 of Batas Pambansa Blg. 129, known
as the Judiciary Reorganization Act of 1980.
19. Transcript of Session Proceedings (TSP), S. No.
1495, February 8, 1995, 31-36.
20. TSP, id., February 15, 1995, 18-19.
21. TSP, id., id., 19-21; Record of the Senate, Vol.
V, No. 63, pp. 180-181.
22. TSP, id., February 20, 1995, pp. 42-43.
23. The Regional Trial Court also shares that
concurrent jurisdiction but that cannot be
considered with regard to the NLRC since
they are of the same rank.
24. TSP, S. No. 1495, February 8, 1995, pp. 32-33.
25. G.R. Nos. 99289-90, January 27, 1993, 217
SCRA 633. See also Tano, et al. vs. Socrates,
et al., G.R. No. 110249, August 21, 1997, 278
SCRA 155.


















SECOND DIVISION
[G.R. No. 172799. July 6, 2007.]
JOHNSON & JOHNSON (PHILS.),
INC., JANSSEN
PHARMACEUTICA, AND/OR
RAFAEL BESA, petitioners, vs.
JOHNSON OFFICE & SALES
UNION-FEDERATION OF FREE
WORKERS (FFW), MA. JESUSA
BONSOL and RIZALINDA
HIRONDO, respondents.
D E C I S I O N
TINGA, J p:
The instant petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure seeks
the reversal of the Decision 1 dated 31 January 2006
and Resolution 2 dated 23 May 2006 of the Court of
Appeals in CA-G.R. SP No. 86963. The Court of
Appeals' Decision affirmed two resolutions of the
National Labor Relations Commission (NLRC)
directing the reinstatement of respondents Ma. Jesusa
Bonsol and Rizalinda Hirondo to their former
positions in Johnson & Johnson (Phils.), Inc. while
the Resolution denied petitioners' motion for
reconsideration.
The instant petition originated from the complaint for
illegal dismissal filed by respondents Ma. Jesusa
Bonsol and Rizalinda Hirondo against petitioners
Johnson & Johnson (Phils.), Inc. and Janssen
Pharmaceutica, one of the former's divisions. On 11
November 1999, the Labor Arbiter dismissed the
complaint, prompting respondents to elevate the
matter to the NLRC. On 14 December 2001, the
NLRC rendered a Resolution, 3 modifying the
decision of the Labor Arbiter. The NLRC ruled that
the violations of company procedure committed by
respondents did not constitute serious misconduct or
willful disobedience warranting their dismissal;
hence, respondents were entitled to reinstatement.
The dispositive portion of the Resolution reads in
part:
WHEREFORE, premises considered,
the instant Appeal is hereby
PARTIALLY GRANTED.
Accordingly, the Decision appealed
from is hereby MODIFIED to the effect
complainants-appellants [private
respondents] were illegally dismissed;
that they are entitled to reinstatement to
their respective former position[s]
without loss of seniority rights and
privileges but without any backwages
or in the alternative, to payment of
separation pay each equivalent to one-
half (1/2) month pay for every year of
service; that they merit payment of their
claims for thirteenth (13th) month pays,
service incentive leave pays and
attorney's fees equivalent to ten
[percent] (10%) of their monetary
awards for thirteenth (13th) month pay
and service incentive leave pay.
DTSIEc
The foregoing awarded claim of
Complainants-Appellants are computed
as follows:
1. Ma. Jesusa Bonsol Salary:
P15,000/mo.
1. Separation Pay:
From May 1992 to Dec. 28, 1998
7 yrs.
P15,000.00 x 7 yrs. x 1/2 [m]o.
P52,500.00
2. 13th Month Pay 15,000.00
Service Incentive Leave Pay:
P15,000 x 12 / 365 = P493.15 x 5
day 2,465.75
2.* Attorney's Fees:
P15,000.00 + 2,4465.75 x 10%
1,746.57

Total P71,712.32
2. Rizalinda Hirondo Salary:
P12,000/mo.
1. Separation Pay:
From April 17, 1995 to
December 28, 1998 = 4 yrs.
P12,000 x 4 yrs. x 1/2 mo.
P24,000.00
2. 13th Month Pay 12,000.00
Service Incentive Leave Pay:
P12,000 x 12 / 265 = P394.52 x 5
days 1,972.60
2.* Attorney's Fees:
P12,000.00 + 1,972.60 x 10%
1,397.26

P39,369.86
GRAND TOTAL P111,082.18
=========
As regards the other issues, the
Decision is SUSTAINED.
SO ORDERED. 4
Petitioners sought partial reconsideration but the
NLRC denied the motion in a Resolution dated 11
February 2002. Neither party appealed from the
resolution decision of the NLRC within the
reglementary period. The Resolution dated 14
December 2001 became final and executory.
On 5 March 2002, petitioners filed a Motion to Set
Case for Conference before the NLRC, manifesting
their willingness to pay respondents' separation pay
and other monetary awards. 5 According to
petitioners, in the conferences called by the NLRC,
none of the respondents were in attendance. The
Labor Arbiter even suggested to petitioners to prepare
the check payment. Instead, in a motion dated 18
December 2002, respondents sought the issuance of a
writ of execution to implement the Resolution dated
14 December 2001 and prayed for their immediate
reinstatement to their former positions. 6 Petitioners
opposed the motion. 7
At the conference held on 31 March 2004, petitioners
reiterated their intention to satisfy respondents'
monetary award but the latter refused and insisted on
their reinstatement. Thereafter, petitioners filed a
Manifestation and Motion, 8 arguing that the 14
December 2001 Resolution granted petitioners the
right to choose between the payment of separation pay
and the reinstatement of respondents based on the
finding that while their termination was illegal,
respondents were not entirely faultless "as they did
not follow the exact procedure in the performance of
their duties." Petitioners also claimed that
reinstatement was no longer feasible in view of the
strained relations between the parties. 9
On 18 June 2004, the NLRC issued a Resolution, 10
which directed the reinstatement of respondents
pursuant to the 14 December 2001 Resolution. The
NLRC recognized respondents' right to choose
between reinstatement and separation pay and
disregarded petitioners' claim of "strained relations."
11 Petitioners' motion for reconsideration was denied
in the Resolution dated 28 July 2004. 12 SCaITA
Aggrieved, petitioners filed a petition for certiorari
with the Court of Appeals. They contended that
respondents' Motion for the Issuance of a Writ of
Execution had the effect of altering the 14 December
2001 Resolution, which had already become final and
executory and which clearly granted petitioners the
option to either reinstate respondents to their former
positions or to pay the monetary award. Petitioners
also argued against respondents' reinstatement in view
of the strained relations between the parties.
On 31 January 2006, the Court of Appeals rendered
the assailed Decision dismissing the petition for
certiorari and affirming the resolutions of the NLRC
dated 18 June 2004 and 28 July 2004. On 23 May
2006, the Court of Appeals denied petitioners' motion
for reconsideration.
Hence, the instant petition, imputing the following
errors on the Court of Appeals:
I. THE HONORABLE COURT OF
APPEALS DISREGARDED THE
LITERAL IMPORT AND SPIRIT OF
THE NLRC'S RESOLUTION DATED
14 DECEMBER 2001 WHICH GIVES
TO PETITIONERS THE EXCLUSIVE
OPTION WHETHER TO
REINSTATE INDIVIDUAL
RESPONDENTS TO THEIR
FORMER POSITIONS OR TO
GRANT THEM SEPARATION PAY
IN LIEU OF REINSTATEMENT.
II. THE HONORABLE COURT OF
APPEALS CONTRADICTED ITS
OWN FINDING THAT THE
DECISION OF THE NLRC DATED
14 DECEMBER 2001 IS ALREADY
FINAL AND EXECUTORY WHEN
IT MODIFIED THE LITERAL
IMPORT OF SAID DECISION BY
HOLDING THAT THE OPTION TO
CHOOSE BETWEEN
REINSTATEMENT OR
SEPARATION PAY BELONGS TO
THE INDIVIDUAL RESPONDENTS.
ICAcTa
III. THE HONORABLE COURT OF
APPEALS SHOULD HAVE RULED
THAT THE REINSTATEMENT OF
INDIVIDUAL RESPONDENTS TO
THEIR FORMER POSITIONS IS NO
LONGER POSSIBLE IN VIEW OF
THE FACT THAT THE RELATIONS
BETWEEN THE PARTIES HAD
BECOME SO STRAINED THAT
REINSTATEMENT WILL NO
LONGER BE TO THE BEST
INTERESTS [sic] OF ALL
CONCERNED. 13
Petitioners contend that the intent of the 14 December
2001 Resolution was to grant petitioners the option to
reinstate respondents to their former positions without
the payment of backwages, or in the alternative, to
pay them separation pay, because the dispositive
portion of the Resolution was directed toward or
addressed to petitioners, who are legally obliged to
implement the ruling. According to petitioners, the
NLRC erred and modified the Resolution dated 14
December 2001, which had become final and
executory, when it stated in its 18 June 2004
Resolution that respondents have the right to choose
between their reinstatement and getting paid the
monetary award when no such categorical
pronouncement can be gathered from the 14
December 2001 Resolution.
The petition has no merit.
Well-entrenched is the rule that an illegally dismissed
employee is entitled to reinstatement as a matter of
right. Over the years, however, case law developed
that where reinstatement is not feasible, expedient or
practical, as where reinstatement would only
exacerbate the tension and strained relations between
the parties, or where the relationship between the
employer and employee has been unduly strained by
reason of their irreconcilable differences, particularly
where the illegally dismissed employee held a
managerial or key position in the company, it would
be more prudent to order payment of separation pay
instead of reinstatement. 14 In other words, the
payment of separation compensation in lieu of the
reinstatement of an employee who was illegally
dismissed from work shall be allowed if and only if
the employer can prove the existence of circumstances
showing that reinstatement will no longer be for the
mutual benefit of the employer and employee.
The NLRC Resolution dated 14 December 2001
expressly recognized respondents' right to
reinstatement in view of the illegality of their
termination. Thus, the dispositive portion of said
resolution ordered respondents' reinstatement without,
however, the payment of backwages as a primary
relief.
Petitioners are mistaken in holding that they have the
prerogative to choose whether to reinstate respondents
to their former positions or to just pay their monetary
award. Neither party can claim that it has the
categorical right to choose between reinstatement and
the payment of the monetary award. Ultimately, the
NLRC has the authority to execute its judgment and to
settle any issue that may arise pertaining to the
manner or details of implementing its judgment.
ISTHED
In the instant case, although the opposing parties
yielded to the judgment of the NLRC and did not
anymore elevate the labor dispute to the appellate
court, they are now at odds as to how the 14
December 2001 Resolution should be implemented.
Thus, the NLRC properly exercised its authority to
resolve the controversy when it issued the Resolution
dated 18 June 2004, where it categorically ordered the
reinstatement of respondents to their former positions,
in consonance with its earlier ruling. The NLRC
upheld the continuing primacy of reinstatement as the
available relief and made short shrift of petitioners'
avowal that separation pay should be awarded in lieu
of reinstatement. Effectively, the NLRC and the Court
of Appeals disregarded petitioners' claim that the
relation between the parties was so strained that only
the payment of the monetary award was feasible
under the circumstances. The Court defers, as it
should, to the common finding of the NLRC and
Court of Appeals since the issue of the existence of
strained relations between the parties is factual in
nature.

The subsequent resolution did not in any manner
modify the 14 December 2001 Resolution, which had
become final and executory, contrary to petitioners'
contention, because the dispositive portion of the 14
December 2001 Resolution particularly stated that
respondents were entitled to reinstatement to their
former positions. In other words, the primary relief
granted to respondents was reinstatement to their
former positions. What constitutes an alteration of a
final and executory judgment is when a court or, in
the instant case, the NLRC, executes an award that is
not among those stated in the dispositive portion of
the judgment. That is not the case here.
That the dispositive portion of the 14 December 2001
Resolution contained the phrase "or in the alternative,
[private respondents are entitled] to payment of
separation pay . . ." does not mean that petitioners
were granted the option to pay the separation pay in
lieu of reinstating respondents. More than anything
else, the statement was in the nature of an affirmation
of the state of the law rather than an adjudication of a
right in favor of petitioners. aSIATD
Moreover, a reading of a court's judgment must not be
confined to the dispositive portion alone; rather, it
should be meaningfully construed in unanimity with
the ratio decidendi thereof to grasp the true intent and
meaning of a decision. 15 A reading of the Resolution
dated 14 December 2001 shows that after finding that
respondents' termination was illegal, the NLRC held
that they were entitled to reinstatement, thus:
Having been illegally dismissed as
comprehensively discussed above,
complainants-appellants are normally
entitled to reinstatement to their
respective former positions without loss
of seniority rights and privileges and to
payment of backwages and other
benefits.
However, inasmuch, as they are not
entirely faultless as they did not follow
exact procedures in the performance of
their duties in the instant case, like
paying for medicines immediately upon
their being pulled out of Alstar, not
later on, and paying with checks
belonging to their customers, not with
their personal checks, Complainants-
Appellants should thus be reinstated to
their former position without loss of
seniority rights and previliges [sic] but
without any backwages whatsoever or
in the alternative, should thus be paid
separation pay each equivalent to one-
half (1/2) month pay for every year of
service. 16
The NLRC ruling expressly recognized respondents'
entitlement to reinstatement because of the illegality
of their dismissal, although they were no longer
entitled to backwages. As found by the NLRC,
respondents violated certain company policies, the
effect of which was the forfeiture of the award of
backwages.
Petitioners argue that the aforementioned finding of
the NLRC that respondents were not entirely
blameless grants them the right to choose between
reinstating respondents or giving them separation pay.
Nothing in the body of the 14 December 2001
Resolution supports petitioners' conclusion. As
already stated, the finding of the NLRC that
respondents were not entirely faultless merely caused
them the forfeiture of their backwages and did not
deny them reinstatement to their former positions.
WHEREFORE, the instant petition for review on
certiorari is DENIED and the Decision dated 31
January 2006 and Resolution dated 23 May 2006 of
the Court of Appeals in CA-G.R. SP No. 86963 are
AFFIRMED. Costs against petitioners. SIcCTD
SO ORDERED.
Carpio, Carpio-Morales and Velasco, Jr., JJ., concur.
Quisumbing, J., is on official leave.
Footnotes
1. Rollo, pp. 38-46. Penned by J. Japar B.
Dimaampao and concurred in by JJ. Martin S.
Villarama, Jr., Chairman of the Eighth
Division, and Edgardo F. Sundiam.
2. Id. at 48-49.
3. Id. at 115-141.
4. Id. at 139-40.
5. Id. at 84-86.
6. Id. at 95.
7. Id. at 88-91.
8. Id. at 96-102.
9. Id. at 100.
10. Id. at 78-80.
11. Id. at 79.
12. Id. at 82-83.
13. Id. at 19-20.
14. Quijano v. Mercury Drug Corporation, 354 Phil.
112, 121-122 (1998).
15. Heirs of Timoteo Moreno and Maria Rotea v.
Mactan-Cebu International Airport Authority,
G.R. No. 156273, 9 August 2005, 466 SCRA
288, 305. HSAcaE
16. Rollo, p. 137-138.






SECOND DIVISION
[G.R. No. 175366. August 11, 2008.]
J-PHIL MARINE, INC. and/or
JESUS CANDAVA and NORMAN
SHIPPING SERVICES, petitioners,
vs. NATIONAL LABOR
RELATIONS COMMISSION and
WARLITO E. DUMALAOG,
respondents.
D E C I S I O N
CARPIO-MORALES, J p:
Warlito E. Dumalaog (respondent), who served as
cook aboard vessels plying overseas, filed on March
4, 2002 before the National Labor Relations
Commission (NLRC) a pro-forma complaint 1 against
petitioners manning agency J-Phil Marine, Inc. (J-
Phil), its then president Jesus Candava, and its foreign
principal Norman Shipping Services for unpaid
money claims, moral and exemplary damages, and
attorney's fees.
Respondent thereafter filed two amended pro forma
complaints 2 praying for the award of overtime pay,
vacation leave pay, sick leave pay, and
disability/medical benefits, he having, by his claim,
contracted enlargement of the heart and severe thyroid
enlargement in the discharge of his duties as cook
which rendered him disabled.
Respondent's total claim against petitioners was
P864,343.30 plus P117,557.60 representing interest
and P195,928.66 representing attorney's fees. 3
By Decision 4 of August 29, 2003, Labor Arbiter Fe
Superiaso-Cellan dismissed respondent's complaint
for lack of merit.
On appeal, 5 the NLRC, by Decision of September
27, 2004, reversed the Labor Arbiter's decision and
awarded US$50,000.00 disability benefit to
respondent. It dismissed respondent's other claims,
however, for lack of basis or jurisdiction. 6
Petitioners' Motion for Reconsideration 7 having been
denied by the NLRC, 8 they filed a petition for
certiorari 9 before the Court of Appeals. DHSaCA
By Resolution 10 of September 22, 2005, the Court of
Appeals dismissed petitioners' petition for, inter alia,
failure to attach to the petition all material documents,
and for defective verification and certification.
Petitioners' Motion for Reconsideration of the
appellate court's Resolution was denied; 11 hence,
they filed the present Petition for Review on
Certiorari.
During the pendency of the case before this Court,
respondent, against the advice of his counsel, entered
into a compromise agreement with petitioners. He
thereupon signed a Quitclaim and Release subscribed
and sworn to before the Labor Arbiter. 12
On May 8, 2007, petitioners filed before this Court a
Manifestation 13 dated May 7, 2007 informing that,
inter alia, they and respondent had forged an amicable
settlement.
On July 2, 2007, respondent's counsel filed before this
Court a Comment and Opposition (to Petitioners'
Manifestation of May 7, 2007) 14 interposing no
objection to the dismissal of the petition but objecting
to "the absolution" of petitioners from paying
respondent the total amount of Fifty Thousand US
Dollars (US$50,000.00) or approximately
P2,300,000.00, the amount awarded by the NLRC, he
adding that:
There being already a payment of
P450,000.00, and invoking the doctrine
of parens patriae, we pray then [to]
this Honorable Supreme Court that the
said amount be deducted from the
[NLRC] judgment award of
US$50,000.00, or approximately
P2,300,000.00, and petitioners be
furthermore ordered to pay in favor of
herein respondent [the] remaining
balance thereof.
xxx xxx xxx 15 (Emphasis in the original;
underscoring supplied)
Respondent's counsel also filed before this Court,
purportedly on behalf of respondent, a Comment 16
on the present petition. EICDSA
The parties having forged a compromise agreement as
respondent in fact has executed a Quitclaim and
Release, the Court dismisses the petition.
Article 227 of the Labor Code provides:
Any compromise settlement, including
those involving labor standard laws,
voluntarily agreed upon by the parties
with the assistance of the Department
of Labor, shall be final and binding
upon the parties. The National Labor
Relations Commission or any court
shall not assume jurisdiction over
issues involved therein except in case
of non-compliance thereof or if there is
prima facie evidence that the settlement
was obtained through fraud,
misrepresentation, or coercion.
(Emphasis and underscoring supplied)
In Olaybar v. NLRC, 17 the Court, recognizing the
conclusiveness of compromise settlements as a means
to end labor disputes, held that Article 2037 of the
Civil Code, which provides that "[a] compromise has
upon the parties the effect and authority of res
judicata", applies suppletorily to labor cases even if
the compromise is not judicially approved. 18
That respondent was not assisted by his counsel when
he entered into the compromise does not render it null
and void. Eurotech Hair Systems, Inc. v. Go 19 so
enlightens:
A compromise agreement is valid as
long as the consideration is reasonable
and the employee signed the waiver
voluntarily, with a full understanding of
what he was entering into. All that is
required for the compromise to be
deemed voluntarily entered into is
personal and specific individual
consent. Thus, contrary to respondent's
contention, the employee's counsel
need not be present at the time of the
signing of the compromise agreement.
20 (Underscoring supplied)
It bears noting that, as reflected earlier, the Quitclaim
and Waiver was subscribed and sworn to before the
Labor Arbiter.
Respondent's counsel nevertheless argues that "[t]he
amount of Four Hundred Fifty Thousand Pesos
(P450,000.00) given to respondent on April 4, 2007,
as 'full and final settlement of judgment award', is
unconscionably low, and un-[C]hristian, to say the
least." 21 Only respondent, however, can impugn the
consideration of the compromise as being
unconscionable. HCETDS
The relation of attorney and client is in many respects
one of agency, and the general rules of agency apply
to such relation. 22 The acts of an agent are deemed
the acts of the principal only if the agent acts within
the scope of his authority. 23 The circumstances of
this case indicate that respondent's counsel is acting
beyond the scope of his authority in questioning the
compromise agreement.
That a client has undoubtedly the right to compromise
a suit without the intervention of his lawyer 24 cannot
be gainsaid, the only qualification being that if such
compromise is entered into with the intent of
defrauding the lawyer of the fees justly due him, the
compromise must be subject to the said fees. 25 In the
case at bar, there is no showing that respondent
intended to defraud his counsel of his fees. In fact, the
Quitclaim and Release, the execution of which was
witnessed by petitioner J-Phil's president Eulalio C.
Candava and one Antonio C. Casim, notes that the
20% attorney's fees would be "paid 12 April 2007
P90,000".
WHEREFORE, the petition is, in light of all the
foregoing discussion, DISMISSED.
Let a copy of this Decision be furnished respondent,
Warlito E. Dumalaog, at his given address at No. 5-B
Illinois Street, Cubao, Quezon City.
SO ORDERED.
Quisumbing, Corona, * Velasco, Jr. and Brion, JJ.,
concur.
Footnotes
1. NLRC records, p. 2. TAESDH
2. Id. at 8, 50.
3. Dumalaog's POSITION PAPER, NLRC records,
pp. 18-21.
4. Id. at 115-125.
5. Id. at 132-156.
6. Decision of September 27, 2004, penned by
NLRC Commissioner Romeo L. Go, with the
concurrence of Commissioner Ernesto S.
Dinopol and the dissent of Commissioner Roy
V. Seeres. NLRC records (unnumbered
pages).
7. NLRC records, unnumbered pages.
8. Ibid.
9. CA rollo, pp. 2-19.
10. Penned by Court of Appeals Associate Justice
Danilo B. Pine, with the concurrences of
Associate Justices Rosmari D. Carandang and
Arcangelita Romilla-Lontok. Id. at 48-50.
11. Penned by Court of Appeals Associate Justice
Arcangelita M. Romilla-Lontok, with the
concurrence of Associate Justices Regalado E.
Maambong and Rosmari D. Carandang, Id. at
215-216.
12. "Quitclaim and Release" dated April 4, 2007,
NLRC records, unnumbered pages. IDAESH
13. Rollo, pp. 226-228.
14. Id. at 241-243.
15. Id. at 242.
16. Id. at 234-240.
17. G.R. No. 108713, October 28, 1994, 237 SCRA
819.
18. Id. at 823-824 (citations omitted).
19. G.R. No. 160913, August 31, 2006, 500 SCRA
611.
20. Id. at 618-619.
21. Rollo, p. 241.
22. Uytengsu III v. Baduel, Adm. Case No. 5134,
December 14, 2005, 477 SCRA 621, 629
(citation omitted).
23. Vide Siredy Enterprises, Inc. v. Court of
Appeals, 437 Phil. 580, 589 (2002).
24. Vide Rustia v. Judge of First Instance of
Batangas, 44 Phil. 62, 65 (1922).
25. Vide Aro v. Naawa etc., et al., 137 Phil. 745,
761 (1969).
* Additional member in lieu of Justice Dante O.
Tinga per Special Order No. 512 dated July
16, 2008. TEDHaA







THIRD DIVISION
[G.R. No. 166096. September 11, 2008.]
PHILIPPINE NATIONAL BANK,
petitioner, vs. RAMON BRIGIDO L.
VELASCO, respondent.
D E C I S I O N
REYES, R.T., J p:
THIS is a tale of a bank officer-depositor clinging to
his position after violating bank regulations and
falsifying his passbook to cover up a false transaction.
TCIEcH
Before the Court is a petition for review on certiorari
under Rule 45 of the 1997 Rules of Civil Procedure
seeking the reversal of the Decision 1 and Resolution
2 of the Court of Appeals (CA). The appealed
decision reversed those of the National Labor
Relations Commission (NLRC) 3 and the Labor
Arbiter 4 which dismissed the complaint for illegal
dismissal and damages of Ramon Brigido L. Velasco
against Philippine National Bank (PNB).
The Facts
Ramon Brigido L. Velasco, a PNB audit officer, and
his wife, Belen Amparo E. Velasco, maintained
Dollar Savings Account No. 010-714698-9 5 at PNB
Escolta Branch. On June 30, 1995, while on official
business at the Legazpi Branch, he went to the PNB
Ligao, Albay Branch and withdrew US$15,000.00
from the dollar savings account. At that time, the
account had a balance of US$15,486.07. The Ligao
Branch is an off-line branch, i.e., one with no network
connection or computer linkage with other PNB
branches and the head office. The transaction was
evidenced by an Interoffice Savings Account
Withdrawal Slip, also known as the Ticket Exchange
Center (TEC). 6
On July 10, 1995, PNB Escolta Branch received the
TEC covering the withdrawal. It was included among
the proofsheet entries of Cashier IV Ruben Francisco,
Jr. The withdrawal was not, however, posted in the
computer of the Escolta Branch when it received said
advice. This means that the withdrawal was not
recorded. Thus, the account of Velasco had an
overstatement of US$15,000.00.
Sometime in September 1995, while Velasco was on a
provincial audit, he claimed calling through phone a
kin in Manila who just arrived from abroad. This kin
allegedly told him that his New York-based brother,
Gregorio Velasco, sent him various checks through
his kin totaling US$15,000.00 and that the checks
would just be deposited in time in Velasco's account.
On October 6, 1995, Velasco updated his dollar
savings account by depositing US$12.78, reflecting a
balance of US$15,486.01. He was allegedly satisfied
with the updated balance, as he thought that the
US$15,000.00 in his account was the amount given by
his brother.
On different dates, Subsequently, Velasco made
several inter-branch withdrawals from the dollar
savings account, to wit: aTEACS
PNB Branch Date Amount
PNB Legaspi November 7, 1995
US$2,000.00
PNB Legaspi November 13, 1995 3,329.97
Cash Dept. November 23, 1995 4,000.00

Total US$9,329.97
=========
Mrs. Belen Velasco also withdrew several amounts on
the dollar account, viz.:
PNB Branch Date Amount
PNB CEPZ December 6, 1995
US$11,494.00
PNB Frisco January 2, 1996 1,292.32

Total US$12,786.32
==========
Subsequently, the dollar savings account of the
spouses was closed.
On February 6, 1996, in the course of conducting an
audit at PNB Escolta Branch, Molina D. Salvador, a
member of the Internal Audit Department (IAD) of
PNB, discovered that the inter-branch withdrawal
made on June 30, 1995 by Velasco at PNB Ligao,
Albay Branch in the amount of US$15,000.00 was not
posted; and that no deposit of said amount had been
credited to the dollar savings account.
On February 7, 1996, Velasco was notified of the
glitch when he reported at the IAD. He said it was
only in the evening that he was able to verify from his
kin that the latter was not able to deposit in his
account the US$15,000.00. 7
The following day, or on February 8, 1996, Velasco
went to Dolorita Donado, assistant vice president of
the Internal Audit Department and team leader of the
Escolta Task Force, and delivered three (3) checks in
the amount of US$5,000.00 each or a total of
US$15,000.00. However, Donato returned the checks
to Velasco and instructed him that he should
personally deposit the checks.
On February 14, 1996, he deposited the checks and
the amount was consequently applied to his unposted
withdrawal of US$15,000.00.
Meanwhile, on February 9, 1996, PNB vice president,
B.C. Hermoso, required 8 Velasco to submit a written
explanation concerning the incident aESTAI
On February 12, 1996, he submitted his sworn letter-
explanation. 9 He described the inter-branch
withdrawal at PNB Ligao, Albay Branch on June 30,
1995 as "no-book", i.e., without the corresponding
presentation to the bank teller of the savings
passbook. He stated, among others, that his
withdrawal was accommodated as the statement of
account showed a balance of US$15,486.01, and that
he is personally known to the officers and staff, being
a former colleague at the PNB Ligao, Albay Branch.
On February 27, 1996, PNB Ligao, Albay Branch
division chief III, Rexor Quiambao, and financial
specialist II, Emma Gacer, and division chief II,
including Renato M. Letada, confirmed the "no-book"
withdrawal. 10
On March 5, 1996, PNB formally charged Velasco
with "Dishonesty, Grave Misconduct, and/or Conduct
Grossly Prejudicial to the Best Interest of the Service
for the irregular handling of Dollar Savings Account
No. 010-714698-9". 12 The administrative charge
alleged that: (1) he transacted a no-book withdrawal
against his Dollar Savings Account No. 010-714698-9
at PNB Ligao, Albay Branch in violation of Section
1216 of the Manual of Regulations for Banks; (2) in
transacting the no-book withdrawal, he failed to
present any letter of introduction as required under
General Circular 3-72/92; (3) the irregular inter-
branch withdrawal was aggravated by the failure of
Escolta Branch to post/enter the withdrawal into the
computer upon receipt of the TEC advice, resulting in
the overstatement of the account balance by
US$15,000.00; and (4) since he was presumed to be
fully aware that neither the deposit nor withdrawal of
the US$15,000.00 was reflected on the passbook, he
was able to appropriate the amount for his personal
benefit, free of interest, to the damage and prejudice
of PNB. 13
On April 8, 1996, PNB withheld his rice and sugar
subsidy, dental/optical/outpatient medical benefits,
consolidated medical benefits, commutation of
hospitalization benefits, clothing allowance, longevity
pay, anniversary bonus, Christmas bonus and cash
gift, performance incentive award, and mid-year
financial assistance. 14 On April 10, 1996, he was
placed under preventive suspension for a period of
ninety (90) days. 15
On May 2, 1996, Velasco submitted his sworn
Answer 16 to the administrative charge against him.
Unlike his previous answer, he here claimed that his
withdrawal on June 30, 1995 was "with passbook". As
proof, he attached a copy of his passbook 17 bearing
the withdrawal entry of US$15,000.00 on June 30,
1995. Explaining the inconsistency with his sworn
letter-explanation on February 12, 1996, he said his
initial answer was made under pressing
circumstances. He was unable to find his passbook
which was then kept by his wife who could not be
contacted at that moment.
On October 2, 1996, the Administrative Adjudication
Office (AAO) of PNB composed of Fernando R.
Mangubat, Jr., Wilfredo S. Verzosa, Celso D.
Benologa, and Jesse L. Figueroa exonerated Velasco
of the charges of dishonesty and conduct prejudicial
to the best interest of service. However, he was found
guilty of grave misconduct, mitigated by length of
service and absence of actual loss to PNB. Thus, he
was meted the penalty of forced resignation with
benefits. 18 HSTCcD
On October 31, 1996, Velasco was formally notified
of the findings of the AAO after its approval by the
management. As of that time, he had been employed
with PNB for eighteen (18) years, holding the position
of Manager 1 of the IAD. He was earning P14,932.00
per month plus a monthly allowance of P3,940.00 or a
total salary of P18,872.00 per month.
On December 22, 1997, he filed a Complaint 19
against PNB for illegal suspension, illegal dismissal,
and damages before the NLRC.
Labor Arbiter, NLRC, and CA Dispositions
On July 9, 1999, Labor Arbiter Pablo C. Espiritu gave
judgment, the dispositive portion of which reads:
WHEREFORE, judgment is hereby
rendered as follows:
1. Dismissing the complaint for
illegal dismissal against
respondents for want of
merit.
2. Ordering PNB to pay
complainant unpaid wages
for the period May 12,
1996 to October 31, 1996
in the amount of
P103,796.00.
3. Dismissing complainant's
claims for damages and
other monetary claims for
lack of merit.
SO ORDERED. 20
In his ruling, the Labor Arbiter opined that as an
employee and officer of PNB for eighteen (18) long
years, Velasco is expected to know bank procedures,
including the expected entries in a savings passbook.
Even if it should be assumed that he presented his
passbook when he withdrew US$15,000.00 at the
PNB Ligao Branch on June 30, 1995, he should have
known that there was something wrong with the
amounts credited to his account when he made an
updated the on October 6, 1995. Being an audit
officer, and fully aware of his withdrawal of
US$15,000.00, he should have made inquiries on the
inconsistency of the entries in his passbook. 21
The Labor Arbiter also found as flimsy the argument
that the additional US$15,000.00 was the amount
given to Velasco by his brother from the United
States. As early as October 6, 1995, when he updated
his passbook, Velasco should have known that (1) his
brother's checks in the amount of US$15,000.00 have
not been deposited in his dollar savings account and
(2) he appears to have been improperly credited with
US$15,000.00. 22 cHCaIE
Moreover, the Labor Arbiter held that the entry in the
passbook purportedly reflecting the withdrawal of
US$15,000.00 is a forgery. It was done to conform to
the defense of Velasco that he presented his passbook
on June 30, 1995. 23

On the charge of illegal suspension, the Labor Arbiter
held that the preventive suspension of Velasco was
reasonable in view of the sensitive nature of his
position. It was also necessary to protect the records
of PNB. 25 It follows that the withholding of his
company benefits is reasonable. 26 Nonetheless, he
should be paid his salary from May 12, 1996 up to
October 31, 1996. 27
His claim for damages and attorney's fees must be
denied because PNB did not violate his rights. 28
Dissatisfied with the decision of the Labor Arbiter,
both Velasco 29 and PNB 30 appealed to the NLRC.
On July 31, 2000, the NLRC affirmed with
modification the Labor Arbiter decision, disposing,
thus:
WHEREFORE, the decision appealed
from is hereby MODIFIED to the
extent that the award of unpaid salaries
is hereby REDUCED to the
complainant's salaries from May 27,
1996 to July 31, 1996. Other
dispositions in the appealed decision
stands (sic) affirmed. 31
In sustaining the Labor Arbiter, the NLRC held that
Velasco's lack of knowledge of the non-posting of his
withdrawal is not credible. Even a cursory look at his
passbook shows that no deposit of US$15,000.00 was
ever made. That there was still a balance of more than
US$15,000.00 in his account after the withdrawal he
made on June 30, 1995 could only mean that the
withdrawal was never posted. Worse, based also on
the entries in his passbook, it is clear that the
withdrawal on June 30, 1995 was a "no-book"
transaction. The withdrawal of US$15,000.00 was not
taken into consideration in the determination of the
balance of June 30, 1995 and the succeeding dates.
Thus, it is clear that the entry in question was
falsified. It was made merely to bolster his subsequent
claim that he presented his passbook when he
withdrew on June 30, 1995. 32 DAESTI
The NLRC concluded that the falsification of the
passbook shows deceit on the part of Velasco. He
took advantage of his position. The posting of the
falsified entry could not have been made without, or
was at least facilitated by, his being an employee of
the bank. Thus, his subsequent withdrawals amounted
to losses on the part of the bank. He made those
withdrawals from his account with full knowledge
that the balance of his passbook of more than
US$15,000.00 was attributed to the non-posting of the
June 30, 1995 withdrawal. 33
The NLRC also held that he had been preventively
suspended for more than thirty (30) days as of May
27, 1996. Since he was paid his salaries from August
1, 1996 to October 31, 1996, he may recover only his
salary from May 27, 1996 to July 31, 1996. 34
Like the Labor Arbiter, the NLRC held that Velasco
may not recover damages. His dismissal was not done
oppressively or in bad faith. Neither was he subjected
to unnecessary embarrassment or humiliation. 35
His motion for reconsideration having been denied,
Velasco elevated the matter to the CA by way of
petition for review on certiorari under Rule 43 of the
Rules of Court. 36 On April 22, 2004, the CA
rendered the assailed decision, the fallo stating, thus:
WHEREFORE, for the foregoing
discussions, We REVERSE and SET
ASIDE the findings of public
respondent NLRC and Labor Arbiter
and hereby enter a decision ordering
PNB to pay petitioner a separation pay
equivalent to half-month salary for
every year of service, plus backwages
from the time of his illegal termination
up to the finality of this decision.
SO ORDERED. 37
According to the CA, the failure of Velasco to present
his passbook and a letter of introduction does not
constitute misconduct. Assuming for the sake of
argument that he committed a serious misconduct in
not properly monitoring his account with ordinary
diligence and prudence, the same may be said of PNB
when it failed to make the necessary posting of his
withdrawal. 38 Lastly, the alleged offense of Velasco
is not work-related to constitute just cause for his
dismissal. 39 HASDcC
Issues
PNB has filed the instant petition for review on
certiorari, putting forth the following issues for Our
resolution, viz.:
I. WHETHER OR NOT THE COURT
OF APPEALS ERRED AND
GRAVELY ABUSED ITS
DISCRETION IN FINDING THAT
RESPONDENT HAS BEEN
ILLEGALLY DISMISSED BY THE
PETITIONERS.
II. WHETHER OR NOT THE COURT
OF APPEALS ERRED AND
GRAVELY ABUSED ITS
DISCRETION IN DIRECTING PNB
TO PAY RESPONDENT
SEPARATION PAY AND
BACKWAGES. 40 (Underscoring
supplied)
We add a third issue which was raised by PNB before
the CA but was, however, left unresolved: whether
Velasco took the correct recourse when he elevated
the decision of the NLRC to the CA by way of
petition for review on certiorari under Rule 43.
Our Ruling
I. Appeal does not lie from the decision of the
NLRC.
We first address the procedural question on the
propriety of the Rule 43 petition. Rule 43 provides for
appeal from quasi-judicial agencies to the CA by way
of petition for review. Petition for review on
certiorari or appeal by certiorari is a recourse to the
Supreme Court under Rule 45.
The mode of appeal resorted to by Velasco is wrong
because appeal is not the proper remedy in elevating
to the CA the decision of the NLRC. Section 2, Rule
43 of the 1997 Rules of Civil Procedure is explicit
that Rule 43 "shall not apply to judgments or final
orders issued under the Labor Code of the
Philippines".
The correct remedy that should have been availed of
is the special civil action of certiorari under Rule 65.
As this Court held in the case of Pure Foods
Corporation v. NLRC, 41 "the party may also
seasonably avail of the special civil action for
certiorari, where the tribunal, board or officer
exercising judicial functions has acted without or in
excess of its jurisdiction, or with grave abuse of
discretion, and praying that judgment be rendered
annulling or modifying the proceedings, as the law
requires, of such tribunal, board or officer". 42 In any
case, St. Martin Funeral Homes v. National Labor
Relations Commission 43 settled any doubt as to the
manner of elevating decisions of the NLRC to the CA
by holding that "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". 44
That the decision of the NLRC is not subject to appeal
could have been a ground for the CA to dismiss the
appeal of Velasco. 45 But even assuming, arguendo,
that his petition could be liberally treated as one for
certiorari under Rule 65, the recourse should not have
prospered. HcaDIA
II. Velasco committed serious misconduct, hence,
his dismissal is justified.
Article 282 of the Labor Code enumerates the just
causes where an employer may terminate the services
of an employee, 46 to wit:
a) Serious misconduct or willful
disobedience by the employee of
the lawful orders of his employer
or representative in connection
with his work;
b) Gross and habitual neglect by the
employee of his duties;
c) Fraud or willful breach by the
employee of the trust reposed in
him by his employer or duly
authorized representative;
d) Commission of a crime or offense by
the employee against the person
of his employer or any
immediate member of his family
or his duly authorized
representative; and
e) Other causes analogous to the
foregoing.
In Austria v. National Labor Relations Commission,
47 the Court defined misconduct as "improper and
wrongful conduct. It is the transgression of some
established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment." 48
In Camus v. Civil Service Board of Appeals, 49
misconduct was described as "wrong or improper
conduct". 50 It implies a wrongful intention and not a
mere error of judgment. 51
Of course, ordinary misconduct would not justify the
termination of the services of an employee. The law is
explicit that the misconduct should be serious. It is
settled that in order for misconduct to be serious, "it
must be of such grave and aggravated character and
not merely trivial or unimportant". 52 As amplified by
jurisprudence, the misconduct must (1) be serious; (2)
relate to the performance of the employee's duties;
and (3) show that the employee has become unfit to
continue working for the employer. 53
Measured by the foregoing yardstick, We rule that
Velasco committed serious misconduct that warrants
termination from employment. SaIACT
A. The misconduct is serious. Velasco violated bank
rules when he transacted a "no-book" withdrawal by
his failure to present his passbook to the PNB Ligao,
Albay Branch on June 30, 1995. Section 1216 of the
Manual of Regulations for Banks and Other Financial
Intermediaries state that "[b]anks are prohibited from
issuing/accepting 'withdrawal authority slips' or any
other similar instruments designed to effect
withdrawals of savings deposits without following the
usual practice of requiring the depositors concerned to
present their passbooks and accomplishing the
necessary withdrawal slips".
Further, he failed to present any letter of introduction
as mandated under General Circular 3-72-92 which
requires that "[b]efore going out-of-town, the
Depositor secures a Letter of Introduction from the
branch/office where his Peso Savings Account is
maintained".
The presentation of passbook and letter of
introduction is not without a valid reason. As aptly
stated by the IAD of PNB:
Considering that the PNB Ligao, Albay
Branch is an offline branch, it is a must
that an LOI and the passbook be
presented by the depositor before any
withdrawal is allowed. This procedure
is required in order for the negotiating
branch to determine or ascertain the
available balance and the specimen
signature of the withdrawing party.
Moreover, the maintaining branch upon
issuance of the LOI shall place a "hold"
on the account in the computer as an
internal control procedure. 54

True, a strict reading of General Circular 3-72-92
would lead one to conclude that only persons with
peso savings account are required to secure a letter of
introduction. However, simple logic dictates that
those maintaining dollar savings account are also
included. No cogent reason would be served by the
rule if only persons with peso savings account are
required to get a letter of introduction. Otherwise,
there can be a circumvention of the rule. Nemo potest
facere per alium qud non potest facere per directum.
No one is allowed to do indirectly what he is
prohibited to do directly. Sinuman ay hindi
pinapayagang gawin nang hindi tuwiran ang
ipinagbabawal gawin nang tuwiran.
As an audit officer, Velasco should be the first to
ensure that banking laws, policies, rules and
regulations, are strictly observed and applied by its
officers in the day-to-day transactions. The banking
system is an indispensable institution in the modern
world. It plays a vital role in the economic life of
every civilized nation. Whether banks act as mere
passive entities for the safekeeping and saving of
money, or as active instruments of business and
commerce, they have become an ubiquitous presence
among the citizenry, who have come to regard them
with respect and even gratitude and, most of all,
confidence. 55 ScAIaT
The CA, however, opined that the failure of Velasco
to abide by the rules is not serious misconduct
because (1) from the admission of PNB itself,
allowing bank personnel who are out-of-town to make
a "no-book" transaction without a letter of
introduction is considered a common practice, and (2)
the approving officers of PNB Ligao Branch should
have also been administratively charged considering
that the "no-book" transaction could not have pushed
through without their approval. 56
In Santos v. San Miguel Corporation, 57 petitioner, in
his defense, cited the prolonged practice of payroll
personnel, including persons in managerial levels, of
encashing personal checks. Finding this argument
unmeritorious, the Court held that "[p]rolonged
practice of encashing personal checks among
respondent's payroll personnel does not excuse or
justify petitioner's misdeeds. Her willful and
deliberate acts were in gross violation of respondent's
policy against encashment of personal checks of its
personnel, embodied in its Cash Department
Memorandum dated September 6, 1989". 58 The
Court even added that petitioner "cannot feign
ignorance of such memorandum as she is duty-bound
to keep abreast of company policies related to
financial matters within the corporation". 59 We apply
the same principle here.
Suffice it to state that the option of who to charge or
punish belongs to PNB. As an employer, PNB is
given the latitude to determine who among its erring
employees should be punished, to what extent and
what penalty to impose. 60 Too, by charging Velasco,
PNB is not estopped from charging its other
employees who might as well have been remiss with
their job.
Of course, We are not unaware that Velasco had a
change of heart. In his sworn Letter-Explanation
February 12, 1996, he admitted that his June 30, 1995
withdrawal of US$15,000.00 was a "no-book"
transaction. However, in his sworn Answer dated
April 30, 1996, he claimed that he actually presented
his passbook when he withdrew on June 30, 1995.
To recall, he was charged with dishonesty, grave
misconduct, and/or conduct grossly prejudicial to the
best interest of the service for irregularly handling his
dollar savings account. Thus, it is safe to assume that
when he prepared his February 12, 1996 sworn Letter-
Explanation, the circumstances surrounding his June
30, 1995 withdrawal at PNB Ligao, Albay Branch
were still fresh on his mind. The allegations against
him were serious, which should have put him on
guard from preparing a haphazard explanation. He
should have been mindful that dire consequences
would surely befall him should the charges against
him be proven. Lest it be forgotten, the no-book
withdrawal was confirmed by the concerned officers
of PNB Ligao, Albay Branch, namely, Quiambao, and
Gacer, and including Letada. These circumstances,
taken together, lead to no other conclusion than that
Velasco changed his explanation from "no-book" to
"with book" transaction after realizing that he violated
bank rules and regulations. EIDaAH
Perez v. People, 61 is illustrative on this score. Perez,
an acting municipal treasurer, submitted two
contradicting answers explaining the location of the
missing funds under his custody and control: the first,
reiterating his previous verbal admission before the
audit team that part of the money was used to pay for
the loan of his late brother, another portion was spent
for the food of his family, and the rest for his
medicine; and the second, claiming that the alleged
missing amount was in the possession and custody of
his accountable personnel at the time of the audit
examination.
This Court held that the sudden turnaround of Perez
was merely an afterthought. He "only changed his
story to exonerate himself, after realizing that his first
Answer put him in a hole, so to speak". 62 Neither did
the Court believe that his alleged sickness affected the
preparation of his first Answer. Perez "presented no
convincing evidence that his disease at the time he
formulated that Answer diminished his capacity to
formulate a true, clear and coherent response to any
query. In fact, its contents merely reiterated his verbal
explanation to the auditing team on January 5, 1989
on how he disposed of the missing funds". 63
We find no cogent reason to depart from Our ruling in
Perez. The claim of Velasco that his initial answer
was made under pressing circumstances is too flimsy
an excuse. It partakes of the nature of an alibi. As
such, it constitutes a self-serving negative evidence
which cannot he accorded greater evidentiary weight
than the declaration of credible witnesses who
testified on affirmative matters. 64 The Court has
consistently frowned upon the defense of alibi, and
received it with caution, not only because it is
inherently weak and unreliable but also because it can
be easily fabricated. 65
Also worth noting is that Velasco never imputed any
ill motive on the part of Rexor, Gacer, and Letada
who collectively narrated that the June 30, 1995
withdrawal was a no-book transaction. They
confirmed his earlier version that he did not present
his passbook when he withdrew the US$15,000.00 on
June 30, 1995. In any case, the fact that he changed
his stance puts his credibility in doubt. Was he lying
when he submitted his sworn letter-explanation of
February 12, 1996, or when he submitted his sworn
Answer dated April 30, 1996? Allegans contraria non
est audiendus. He is not to be heard who alleges
things contradictory to each other. Hindi dapat
pakinggan ang nagsasabi ng mga bagay na salungat
sa isa't-isa.
Velasco did not only violate bank rules and
regulations. What compounds his offense was his
unusual silence. He never informed PNB about the
huge overstatement of US$15,000.00 in his account.
He updated his passbook on October 6, 1995 by
depositing US$12.78. Thus, as early as that date, he
should have known that something was wrong with
the credited balance in his passbook and reported it
immediately to the concerned officers of PNB. What
he did, instead, was to keep mum until PNB
discovered the incident and notified him on February
7, 1996, or almost eight (8) months after his no-book
withdrawal on June 30, 1995. acAESC
With his silence, he clearly intended to gain at the
expense of PNB. The omission to report is not trivial
or inconsequential because it gave him the
opportunity to withdraw from his dollar savings
account more than its real balance, as what he actually
did. He took advantage of the overstatement of his
account, instead of protecting the interest of the bank.
It would be impossible for him not to detect the error
at the time he deposited US$12.78 on October 6,
1995, because his account had a big balance despite
the fact that no large amount of money was deposited.
His claim that he was satisfied with the updated
balance of US$15,486.01 on October 6, 1995, as he
thought that the US$15,000.00 in his account was the
amount given by his brother, is simply unbelievable.
It is a desperate attempt at exculpation. The deposit of
the money from his brother should have been
reflected in the on-line computer of PNB. The deposit
would have also been posted for update upon the
presentation of the passbook on October 6, 1995. No
deposit of US$15,000.00 was, however, reflected in
the passbook.
In Aboitiz Shipping Corporation v. Dela Serna, 66 Tiu
v. National Labor Relations Commission, 67 Five J
Taxi v. National Labor Relations Commission, 68 and
Falguera v. Linsangan, 69 among other cases, this
Court consistently held that factual findings of quasi-
judicial agencies, which have acquired expertise in
matters entrusted to their jurisdiction, are accorded
not only respect but also finality if they are supported
by substantial evidence. 70 Thus, in the absence of
proof that the Labor Arbiter or the NLRC had gravely
abused their discretion, this Court shall deem
conclusive and will not overturn their particular
factual findings. 71
The Labor Arbiter and the NLRC are in unison that
Velasco transacted a no-book withdrawal and failed to
present a letter of introduction at PNB Ligao, Albay
Branch on June 30, 1995. He also forged his passbook
to cover up his offense. Being duly supported by
substantial evidence, We sustain said finding. Fitness
for continued employment cannot be
compartmentalized into tight little cubicles of aspects
of character, conduct, and ability separate and
independent of each other. A service of irregularities,
when combined, may constitute serious misconduct
which is a just cause for dismissal. 72 IcTEaC

B. The serious misconduct relates to the
performance of duties. The CA ruled that the offense
of Velasco was not work-related and does not warrant
dismissal. It likewise held that there is no proof that
his failure to be a good depositor affected his duties or
performance as an employee of PNB. 73
At first glance, the acts committed by Velasco pertain
only to his being a depositor of PNB. But he has a
dual personality. He was a depositor and, at the same
time, an officer of the bank.
On one hand, he failed to present his passbook and a
letter of introduction when he withdrew
US$15,000.00 at PNB Ligao, Albay Branch on June
30, 1995. This serious misconduct was aggravated
when he presented a falsified passbook to make it
appear that he did not commit any misdeed. On the
other hand, he worked for PNB for eighteen (18) long
years, his last position having been as Manager 1 of
the IAD. As such, he was involved in the examination
of the books of account of PNB. Thus, when he
violated bank rules and regulations and tried to cover
up his infractions by falsifying his passbook, he was
not only committing them as a depositor but also, or
rather more so, as an officer of the bank. It is akin to
falsification of time cards, 74 and circulation of fake
meal tickets, 75 which this Court held as a just cause
for terminating the services of an employee.
C. Velasco has become unfit to continue working
at PNB. Taken together, his acts render him unfit to
remain in the employ of the bank. That it is his first
offense is of no moment because he holds a
managerial position. Employers are allowed wide
latitude of discretion in terminating managerial
employees who, by virtue of their position, require
full trust and confidence in the performance of their
duties. 76 Managerial employees like Velasco are
tasked to perform key and sensitive functions and are
bound by more exacting work ethics. 77 Indeed, not
even his eighteen (18) years of service could
exonerate him. As this Court held in Equitable
PCIBank v. Caguioa: 78
The leniency sought by respondent on
the basis of her 35 years of service to
the bank must be weighed in
conjunction with the other
considerations raised by petitioners. As
that service has been amply
compensated, her plea for leniency
cannot offset her dishonesty. Even
government employees who are validly
dismissed from the service by reason of
timely discovered offenses are deprived
of retirement benefits. Treating
respondent in the same manner as the
loyal and code-abiding employees,
despite the timely discovery of her
Code violations, may indeed have a
demoralizing effect on the entire bank.
Be it remembered that banks thrive on
and endeavor to retain public trust and
confidence, every violation of which
must thus be accompanied by
appropriate sanctions. 79
III. The CA erred in directing PNB to pay
Velasco separation pay and backwages.
PNB has no other liability to Velasco,
except his unpaid wages from May 27,
1996 to J uly 31, 1996.
PNB was registered under the Corporation Code
under SEC Reg. No. ASO 96-005555 dated May 27,
1996. 80 Thus, on that day, employees of PNB came
under the jurisdiction of the Labor Code, whose
Sections 8 and 9 of Rule XXIII, Book V of the
Implementing Rules state:
Section 8. Preventive Suspension.
The employer may place the worker
concerned under preventive suspension
if his continued employment poses a
serious and imminent threat to the life
or property of the employer or his co-
workers.
Section 9. No preventive suspension
shall last longer than thirty (30) days.
The employer shall thereafter reinstate
the worker in his former or in a
substantially equivalent position or the
employer may extend the period of
suspension provided that during the
period of extension, he pays the wages
and other benefits due to the worker. In
such case, the worker shall not be
bound to reimburse the amount paid to
him during the extension if the
employer decides, after completion of
the hearing, to dismiss the worker.
aTcIEH
PNB has the right to preventively suspend Velasco
during the pendency of the administrative case against
him. It was obviously done as a measure of self-
protection. It was necessary to secure the vital records
of PNB which, in view of the position of Velasco as
internal auditor, are easily accessible to him.
Velasco was preventively suspended for more than
thirty (30) days as of May 27, 1996, while the records
bear that Velasco was paid his salaries from August 1,
1996 to October 31, 1996. 81 Thus, the NLRC is
correct in its holding that he may recover his salaries
from May 27, 1996 to July 31, 1996.
He is not entitled to separation and backwages
because he was not illegally dismissed. 82 We note
though that PNB was not at all insensitive to his
plight, considering (1) his restitution of the amount
akin to no actual loss to the bank, and (2) his length of
service of eighteen (18) years. 83 As stated earlier,
PNB imposed on Velasco the penalty of forced
resignation with benefits, instead of dismissal. The
records bear out that he was granted P542,110.75 as
separation benefits 84 which was used to offset his
loan in the bank, leaving an outstanding balance of
P167,625.82 as of May 27, 1997. 85 We find that
PNB acted humanely under the circumstances.
One last word.
The law imposes great burdens on the employer. One
needs only to look at the varied provisions of the
Labor Code. Indeed, the law is tilted towards the
plight of the working man. The Labor Code is titled
that way and not as "Employer Code". As one
American ruling puts it, the protection of labor is the
highest office of our laws. 86
Corollary to this, however, is the right of the employer
to expect from the employee no less than adequate
work, diligence and good conduct. 87 As Mr. Justice
Joseph McKenna of the United States Supreme Court
said in Arizona Copper Co. v. Hammer, 88 "[t]he
difference between the position of the employer and
the employee, simply considering the latter as
economically weaker, is not a justification for the
violation of the rights of the former". 89
WHEREFORE, the petition is GRANTED and the
appealed Decision REVERSED and SET ASIDE. The
Decision of the National Labor Relations Commission
is REINSTATED. 2005cdasia
SO ORDERED.
Chico-Nazario, * Tinga, ** Velasco, Jr. ** and
Nachura, JJ., concur.
Footnotes
1. Rollo, pp. 78-89; Annex "A". CA-G.R. No.
61881. Penned by Associate Justice Danilo P.
Pine, with Associate Justices Martin S.
Villarama, Jr. and Arcangelita Romilla-
Lontok, concurring. HSTCcD
2. Id. at 90-91; Annex "B".
3. Id. at 108-114; Annex "D". NLRC CA No.
020663-99. Penned by Commissioner Ireneo
B. Bernardo, with Commissioners Lourdes C.
Javier and Tito F. Genilo, concurring.
4. Id. at 93-106; Annex "C". NLRC NRC Case No.
00-12-08987-97.
5. Annex "F".
6. Annex "G".
7. Id. at 121.
8. Annex "H".
9. Annex "I".
10. CA rollo, pp. 186-188; Annex "M".
11. Annex "J".
12. Rollo, pp. 123-125. ICHcTD
13. CA rollo, p. 121; Annex "G".
14. Annex "K".
15. Annex "L".
16. Rollo, p. 117.
17. Annex "M".
18. Annex "O".
19. Rollo, p. 106.
20. Id. at 101. aSTECI
21. Id. at 101-102.
22. Id. at 104-105.
23. Id. at 105.
24. Id.
25. Id.
26. Id. at 105-106.
27. Annex "T".
28. Annex "U". caSDCA
29. Rollo, p. 114.
30. Id. at 112-113.
31. Id. at 113.
32. Id.
33. Id. at 114.
34. Annex "W".
35. Rollo, pp. 88-89.
36. Id. at 85-86.
37. Id. at 86.
38. Id. at 413.
39. G.R. No. 78591, March 21, 1989, 171 SCRA
415.
40. Id. at 424.
41. G.R. No. 130866, September 16, 1998, 295
SCRA 494.
42. St. Martin Funeral Homes v. National Labor
Relations Commission, id. at 507.
43. Rules of Civil Procedure (1997), Sec. 1.
Grounds for dismissal of appeal. An
appeal may be dismissed by the Court of
Appeals, on its own motion or on that of the
appellee, on the following grounds: DSETcC
xxx xxx xxx
(i) The fact that the order or judgment appealed from
is not appealable.
44. As contradistinguished with Article 285 of the
Labor Code, which enumerates the instances
when an employee may terminate his
employment relation with the employer, to
wit: (1) Serious insult by the employer or his
representative on the honor and person of the
employee; (2) Inhuman and unbearable
treatment accorded the employee by the
employer or his representative; (3)
Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and (4)
Other causes analogous to any of the
foregoing.
45. G.R. No. 124382, August 16, 1999, 312 SCRA
410.
46. Austria v. National Labor Relations
Commission, id. at 429, citing Cosep v.
National Labor Relations Commission, G.R.
No. 124966, June 16, 1998, 290 SCRA 704.
47. 112 Phil. 301 (1961).
48. Camus v. Civil Service Board of Appeals, id. at
306.
49. Id., citing In re Morilleno, 43 Phil. 212, 214
(1922).
50. Austria v. National Labor Relations
Commissions, supra note 47.
51. Philippine Aeolus Automotive United
Corporation v. National Labor Relations
Commission, G.R. No. 124617, April 28,
2000, 331 SCRA 237, 246; Molato v.
National Labor Relations Commission, G.R.
No. 113085, January 2, 1997, 266 SCRA 42,
46; Aris Philippines, Inc. v. National Labor
Relations Commission, G.R. No. 97817,
November 10, 1994, 238 SCRA 59, 62.
52. CA rollo, p. 99. EScHDA
53. Simex International (Manila), Inc. v. Court of
Appeals, G.R. No. 88013, March 19, 1990,
183 SCRA 360, 366-367.
54. Rollo, pp. 84-85.
55. G.R. No. 149416, March 14, 2003, 399 SCRA
172.
56. Santos v. San Miguel Corporation, id. at 183.
57. Id.; see also San Miguel Corporation v. National
Labor Relations Commission, G.R. No. L-
50321, March 13, 1984, 128 SCRA 180.
58. See Soriano v. National Labor Relations
Commission, G.R. No. L-75510, October 27,
1987, 155 SCRA 124.

59. G.R. No. 164763, February 12, 2008.
60. Perez v. People, id. at 11.
61. Id. at 13.
62. People v. Estomaca, G.R. Nos. 134288-89,
January 15, 2002, 373 SCRA 197.
63. People v. Villamor, G.R. Nos. 140407-08 &
141908-09, January 15, 2002, 373 SCRA 254.
64. G.R. No. 88538, July 25, 1991, 199 SCRA 568.
65. G.R. No. 83433, November 12, 1992, 215 SCRA
540.
66. G.R. No. 111474, August 22, 1994, August 22,
1994, 235 SCRA 556.
67. G.R. No. 114848, December 14, 1995, 251
SCRA 364.
68. See also German Marine Agencies, Inc. v.
National Labor Relations Commission, G.R.
No. 142049, January 30, 2001, 350 SCRA
629, 646, citing Travelaire & Tours
Corporation v. National Labor Relations
Commission, G.R. No. 131523, August 20,
1998, 294 SCRA 505; Suarez v. National
Labor Relations Commission, G.R. No.
124723, July 31, 1998, 293 SCRA 496;
Autobus Workers' Union v. National Labor
Relations Commission, G.R. No. 117453,
June 26, 1998, 291 SCRA 219; Prangan v.
National Labor Relations Commission, G.R.
No. 126529, April 15, 1998, 289 SCRA 142;
International Pharmaceuticals, Inc. v.
National Labor Relations Commission, G.R.
No. 106331, March 9, 1998, 287 SCRA 213;
Villa v. National Labor Relations
Commission, G.R. No. 117043, January 14,
1998, 284 SCRA 105. aDCIHE
69. Id. at 647, citing Gandara Mill Supply v.
National Labor Relations Commission, G.R.
No. 126703, December 29, 1998, 300 SCRA
702; National Union of Workers in Hotels,
Restaurants and Allied Industries v. National
Labor Relations Commission, G.R. No.
125561, March 6, 1998, 287 SCRA 192.
70. Piedad v. Lanao del Norte Electric Cooperative,
Inc., G.R. No. 73735, August 31, 1987, 153
SCRA 500, 509, citing National Service
Corporation v. Leogardo, Jr., G.R. No. L-
64296, July 20, 1984, 130 SCRA 502; see
also Gustilo v. Wyeth Philippines, Inc., G.R.
No. 149629, October 4, 2004, 440 SCRA 67,
75.
71. Rollo, pp. 86-87.
72. See San Miguel Corporation Employees Union
v. Ferrer-Calleja, G.R. No. 80141, July 5,
1989, 175 SCRA 85.
73. Ibarrientos v. National Labor Relations
Commission, G.R. No. 75277, July 31, 1989,
175 SCRA 761.
74. Mendoza v. National Labor Relations
Commission, G.R. No. 131405, July 20, 1999,
310 SCRA 846; see also Etcuban, Jr. v.
Sulpicio Lines, Inc., G.R. No. 148410,
January 17, 2005, 448 SCRA 516; Tan v.
National Labor Relations Commission, G.R.
No. 128290, November 24, 1998, 299 SCRA
169, 183; Filipro, Incorporated v. National
Labor Relations Commission, G.R. No. L-
70546, October 16, 1986, 145 SCRA 123;
Lamsan Trading, Inc. v. Leogardo, Jr., G.R.
No. L-73245, September 30, 1986, 144 SCRA
571; Metro Drug Corporation v. National
Labor Relations Commission, G.R. No. L-
72248, July 22, 1986, 143 SCRA 132; San
Miguel Corporation v. National Labor
Relations Commission, G.R. No. L-70177,
June 25, 1986, 142 SCRA 376.
75. Gonzales v. National Labor Relations
Commission, G.R. No. 131653, March 26,
2001, 355 SCRA 195. ESTAIH
76. G.R. No. 159170, August 12, 2005, 466 SCRA
686.
77. Equitable PCIBank v. Caguioa, id. at 698.
78. Rollo, p. 165.
79. Rollo, p. 258; Annex "1".
80. See Labor Code, Art. 279; Philippine Carpet
Employees Association v. Philippine Carpet
Manufacturing Corporation, G.R. Nos.
140269-70, September 14, 2000, 340 SCRA
383.
81. Rollo, p. 164.
82. CA rollo, p. 200.
83. Id. at 203.
84. Ex parte Newman, 9 Cal. 502, 521 (1858).
85. Coca-Cola Bottlers Philippines Incorporated v.
National Labor Relations Commission, G.R.
Nos. 82580 & 84075, April 25, 1989, 172
SCRA 751; Firestone Tire and Rubber Co. of
the Phils. v. Lariosa, G.R. No. L-70479,
February 27, 1987, 148 SCRA 187.
86. 250 US 400 (1919).
87. Arizona Copper Co. v. Hammer, id. at 437.
* Vice Associate Justice Consuelo Ynares-Santiago
as chairperson. Justice Ynares-Santiago is on
official leave per Special Order No. 516 dated
August 27, 2008.
** Designated as additional members Vice
Associate Justices Consuelo Ynares-Santiago
and Ma. Alicia Austria-Martinez per Special
Order No. 517 dated August 27, 2008.
DHETIS
















THIRD DIVISION
[G.R. No. 162739. February 12, 2008.]
AMA COMPUTER COLLEGE-
SANTIAGO CITY, INC., petitioner,
vs. CHELLY P. NACINO,
substituted by the Heirs of Chelly P.
Nacino, respondent.
R E S O L U T I O N
NACHURA, J p:
Before this Court is a Petition for Review on
Certiorari 1 under Rule 45 of the Rules of Civil
Procedure seeking the reversal of the Court of
Appeals (CA) Resolution 2 dated June 23, 2003, the
dispositive portion of which provides:
WHEREFORE, for being procedurally
flawed, this petition for certiorari is
hereby DENIED DUE COURSE, and
consequently DISMISSED. Needless
to say, the prayer for temporary
restraining order, being merely an
adjunct to the main suit, must be pro
tanto DENIED.
SO ORDERED.
and of the CA Resolution 3 dated March 3, 2004
which denied petitioner's motion for
reconsideration. IcaHTA
Petitioner AMA Computer College Santiago City,
Inc. (AMA) employed Chelly P. Nacino (Nacino) as
Online Coordinator of the college. On October 30,
2002, ostensibly upon inspection, the Human
Resources Division Supervisor, Mariziel C. San Pedro
(San Pedro) found Nacino absent from his post. On
the same day, San Pedro issued a Memorandum 4
requiring Nacino to explain his absence. Nacino filed
with San Pedro a written explanation 5 claiming that
he had to rush home at 1315 hours (1:15 PM) because
he was suffering from LBM (loose bowel movement)
and that the facilities in the school were inadequate
and inefficient, but he had gone back to the school at
1410 hours (2:10 PM). Not satisfied with the
explanation, San Pedro sought another explanation
because the earlier explanation "does not conform to a
previous investigation conducted." 6 Nacino furnished
San Pedro the same written explanation he had earlier
submitted. San Pedro then filed a formal complaint
against Nacino for false testimony, in addition to the
charge of abandonment. An Investigating Committee
7 was constituted to investigate the complaint and,
pending investigation, Nacino was placed under
preventive suspension for a maximum of thirty (30)
days, effective November 8, 2002. 8 The Investigating
Committee found Nacino guilty as charged, and was
dismissed from the service on December 5, 2002. 9
Aggrieved, Nacino filed on December 13, 2002 a
Complaint 10 for Illegal Suspension and Termination
before the National Conciliation and Mediation Board
(NCMB) in Tuguegarao City. On January 10, 2003,
Maria Luanne M. Jali-jali (Jali-jali), AMA's
representative, signed the submission Agreement,
accepting the jurisdiction of Voluntary Arbitrator
Nicanor Y. Samaniego (Voluntary Arbitrator) over the
controversy. SEIcHa
Before the Voluntary Arbitrator, the parties agreed to
settle the case amicably, with Nacino discharging and
releasing AMA from all his claims in consideration of
the sum of P7,719.81. The Decision 11 embodying
the Compromise Agreement and the corresponding
Quitclaim and Release, 12 both dated February 21,
2003, were duly prepared and signed, but the check in
payment of the consideration for the settlement had
yet to be released.
On April 1, 2003, Nacino died in an accident. On
April 15, 2003, the Voluntary Arbitrator rendered the
assailed Decision, 13 ordering Nacino's reinstatement
and the payment of his backwages and 13th month
pay. Therein, the Voluntary Arbitrator manifested
that, due to AMA's failure to pay the sum of
P7,719.81, Nacino withdrew from the Compromise
Agreement, as shown by the conduct of a hearing on
March 15, 2003 where both parties appeared and were
directed to file their position papers. The Voluntary
Arbitrator also stated that Nacino complied, but AMA
failed to file its position paper and to appear before
him despite summons. On May 7, 2003, the Voluntary
Arbitrator issued a Writ of Execution 14 upon motion
of Nacino's surviving spouse, one Bernadeth V.
Nacino. AMA filed a Motion to Quash the said Writ
but the Voluntary Arbitrator allegedly refused to
receive the same. 15 Thus, on May 22, 2003, the heirs
of Nacino were able to garnish AMA's bank deposits
in the amount of P52,021.70.
On June 16, 2003, AMA filed a Petition 16 for
Certiorari under Rule 65 before the CA. On June 23,
2003, the CA dismissed the said petition because it
was a wrong mode of review. It held that the proper
remedy was an appeal by way of Rule 43 of the Rules
of Civil Procedure. Accordingly, the CA opined, an
erroneous appeal shall be dismissed outright pursuant
to Section 2, Rule 50 of the Rules of Civil Procedure.
DCcIaE
AMA filed its Motion for Reconsideration but the CA
denied it in its Resolution dated March 3, 2004.
Hence, this petition based on the sole ground that:
THE COURT OF APPEALS
COMMITTED SERIOUS ERROR OF
LAW IN DISMISSING THE
PETITION FOR CERTIORARI
UNDER RULE 65 OF THE 1997
RULES OF CIVIL PROCEDURE
FILED BY HEREIN PETITIONER.
AMA claims that Jali-jali was misinformed and
misled in signing the Submission Agreement,
subjecting AMA to the jurisdiction of the Voluntary
Arbitrator; that the Voluntary Arbitrator's Decision
was issued under the Labor Code and, as such, the
same is not appealable under Rule 43, as provided for
by Section 2 17 thereof, but under Rule 65 of the
Rules of Civil Procedure; and that the petition for
certiorari is the only plain, speedy and adequate
remedy in this case since the Voluntary Arbitrator
acted with grave abuse of discretion in disregarding
the parties' compromise agreement, in rendering the
assailed Decision, and in issuing the Writ of
Execution without affording AMA its right to due
process. IDSaTE
On the other hand, the heirs of Nacino refused to
receive this Court's Resolution requiring them to file
their Comment 18 and, as such, were considered to
have waived their right to file the same. 19
The instant petition lacks merit.
Pertinent is our ruling in Centro Escolar University
Faculty and Allied Workers Union-Independent v.
Court of Appeals, 20 where we held:
We find that the Court of Appeals did
not err in holding that petitioner used a
wrong remedy when it filed a special
civil action on certiorari under Rule 65
instead of an appeal under Rule 43 of
the 1997 Rules of Civil Procedure. The
Court held in Luzon Development Bank
v. Association of Luzon Development
Bank Employees that decisions of the
voluntary arbitrator under the Labor
Code are appealable to the Court of
Appeals. In that case, the Court
observed that the Labor Code was silent
as regards the appeals from the
decisions of the voluntary arbitrator,
unlike those of the Labor Arbiter which
may be appealed to the National Labor
Relations Commission. The Court
noted, however, that the voluntary
arbitrator is a government
instrumentality within the
contemplation of Section 9 of Batas
Pambansa Blg. (BP) 129 which
provides for the appellate jurisdiction
of the Court of Appeals. The decisions
of the voluntary arbitrator are akin to
those of the Regional Trial Court, and,
therefore, should first be appealed to
the Court of Appeals before being
elevated to this Court. This is in
furtherance and consistent with the
original purpose of Circular No. 1-91 to
provide a uniform procedure for the
appellate review of adjudications of all
quasi-judicial agencies not expressly
excepted from the coverage of Section
9 of BP 129. Circular No. 1-91 was
later revised and became Revised
Administrative Circular No. 1-95. The
Rules of Court Revision Committee
incorporated said circular in Rule 43 of
the 1997 Rules of Civil Procedure. The
inclusion of the decisions of the
voluntary arbitrator in the Rule was
based on the Court's pronouncements in
Luzon Development Bank v.
Association of Luzon Development
Bank Employees. Petitioner's argument,
therefore, that the ruling in said case is
inapplicable in this case is without
merit.
We are not unmindful of instances when certiorari
was granted despite the availability of appeal, such as
(a) when public welfare and the advancement of
public policy dictates; (b) when the broader interest of
justice so requires; (c) when the writs issued are null
and void; or (d) when the questioned order amounts to
an oppressive exercise of judicial authority. 21
However, none of these recognized exceptions attends
the case at bar. AMA has sadly failed to show
circumstances that would justify a deviation from the
general rule. SaHIEA
While it is true that, in accordance with the liberal
spirit which pervades the Rules of Court and in the
interest of justice, a petition for certiorari may be
treated as having been filed under Rule 45, the
petition for certiorari filed by petitioner before the
CA cannot be treated as such, without the exceptional
circumstances mentioned above, because it was filed
way beyond the 15-day reglementary period within
which to file the Petition for Review. 22 AMA
received the assailed Decision of the Voluntary
Arbitrator on April 15, 2003 and it filed the petition
for certiorari under Rule 65 before the CA only on
June 16, 2003. 23 By parity of reasoning, the same
reglementary period should apply to appeals taken
from the decisions of Voluntary Arbitrators under
Rule 43. Based on the foregoing disquisitions, the
assailed Decision of the Voluntary Arbitrator had
already become final and executory and beyond the
purview of this Court to act upon. 24
Verily, rules of procedure exist for a noble purpose,
and to disregard such rules in the guise of liberal
construction would be to defeat such purpose.
Procedural rules are not to be disdained as mere
technicalities. They may not be ignored to suit the
convenience of a party. Adjective law ensures the
effective enforcement of substantive rights through
the orderly and speedy administration of justice. Rules
are not intended to hamper litigants or complicate
litigation. But they help provide for a vital system of
justice where suitors may be heard following judicial
procedure and in the correct forum. Public order and
our system of justice are well served by a
conscientious observance by the parties of the
procedural rules. 25 DISEaC

WHEREFORE, the instant Petition is DENIED for
lack of merit. The assailed Court of Appeals
Resolutions dated June 23, 2003 and March 3, 2004
are hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Corona, * and
Reyes, JJ., concur.
Footnotes
1. Dated April 27, 2004; rollo, pp. 8-39.
2. Particularly docketed as CA-G.R. SP No. 77508,
penned by Associate Justice Renato C.
Dacudao (retired), with Associate Justices
Godardo A. Jacinto and Danilo B. Pine (both
retired), concurring; id. at 48.
3. Id. at 43-45.
4. Memorandum, id. at 83.
5. Written Explanation; id. at 84.
6. Memorandum, dated November 5, 2002; id. at 85.
7. Memorandum, dated November 7, 2002; id. at 88.
cIADTC
8. Rollo, p. 89.
9. Memorandum, id. at 91.
10. Rollo, p. 93.
11. Decision in NCMB-RB2-VA Case No. 01-001-
2003; id. at 95-96.
12. Rollo, p. 94.
13. Id. at 76-79.
14. Id. at 80-81.
15. Affidavit of one Dennis Salvador, messenger of
AMA dated March 19, 2003; id. at 82.
16. Id. at 51-74.
17. Rule 43, SEC. 2. Cases not covered. This
Rule shall not apply to judgments or final
orders issued under the Labor Code of the
Philippines.
18. Resolution, April 11, 2005; rollo, p. 117.
19. Resolution, August 15, 2005; id. at 123.
20. G.R. No. 165486, May 31, 2006, 490 SCRA 61,
69-70, citing Luzon Development Bank v.
Association of Luzon Development Bank
Employees, 249 SCRA 162 (1995). ITDHcA
21. Chua v. Santos, G.R. No. 132467, October 18,
2004, 440 SCRA 365, 374-375.
22. First Corporation v. Former Sixth Division of
the Court of Appeals, G.R. No. 171989, July
4, 2007.
23. Supra note 16, at 53-54.
24. Zacate v. Commission on Elections, G.R. No.
144678, March 1, 2001, 353 SCRA 441, 449.
25. Audi Ag v. Hon. Jules A. Mejia, in his capacity
as Executive Judge of the Regional Trial
Court, Alaminos City; Auto Prominence
Corporation; and Proton Pilipinas
Corporation, G.R. No. 167533, July 27, 2007.
* In lieu of Associate Justice Minita V. Chico-
Nazario per Special Order No. 484 dated
January 11, 2008. aTcSID

SECOND DIVISION
[G.R. No. 149050. March 25, 2009.]
SAMAHAN NG MGA
MANGGAGAWA SA HYATT-
NUWHRAIN-APL, petitioner, vs.
VOLUNTARY ARBITRATOR
FROILAN M. BACUNGAN and
HYATT REGENCY MANILA,
respondents.
D E C I S I O N
TINGA, J p:
Before the Court is a petition for review on certiorari,
1 assailing the twin resolutions of the Court of
Appeals in CA-G.R. SP No. 60959. The Resolution 2
dated 16 November 2000 dismissed outright
petitioner's special civil action for certiorari therein
on the ground that it was a wrong remedy while the
Resolution 3 dated 10 July 2001 denied petitioner's
motion for reconsideration. SITCcE
The following factual antecedents are matters of
record.
In 1995 and 1996, Mario Dacles and Teodoro
Valencia respectively assumed their duties as glass
cleaners at Hyatt Regency Manila (respondent Hyatt),
pursuant to the cleaning service contract 4 executed
between respondent Hyatt and City Service
Corporation (CSC). 5
Meanwhile, in April 1998, respondent Hyatt hired
Amelia Dalmacio and Renato Dazo on a casual basis
as florist/sales clerk and helper/driver, respectively.
After their contracts expired on 30 August 1998,
Dalmacio and Dazo continued reporting for work. On
16 September 1998, Dalmacio and Dazo signed
another employment contract with respondent Hyatt. 6
During the Labor Management Committee Meeting
(LMC), petitioner Samahan ng mga Manggagawa sa
Hyatt-NUWHRAIN-APL (petitioner union), a
legitimate labor organization composed of the rank-
and-file employees of respondent Hyatt, questioned
the status as non-regular employees of Dacles,
Valencia, Dalmacio and Dazo (Dacles, et al.). 7
On 19 April 1999, petitioner union and respondent
Hyatt agreed to submit the matter for resolution
through the grievance machinery as provided for in
their collective bargaining agreement (CBA).
Petitioner union claimed that Dacles, et al. were
regular employees on account of the nature of their
functions as well as the length of their service. On the
other hand, respondent Hotel maintained that
Dalmacio and Dazo were mere project employees
whose employments were co-terminus with the
existence of the flower shop outlet and that Dacles
and Valencia were employees of CSC, an independent
contractor.
On 16 September 1999, respondent Hyatt dismissed
Dacles and Valencia and disallowed them from
reporting to work on the ground that the service
contract between respondent Hyatt and CSC had been
terminated.
Petitioner union and respondent Hyatt were unable to
settle the dispute through the grievance procedure
and, thus, agreed to elevate the issue for voluntary
arbitration. The parties selected Dean Froilan
Bacungan as voluntary arbitrator. After the exchange
of responsive pleadings, the case was deemed
submitted for resolution.
On 11 January 2000, the voluntary arbitrator rendered
a decision, the dispositive portion of which reads:
WHEREFORE, the Voluntary
Arbitrator rules that:
1. Mario Dacles and Teodoro Valencia
are not employees of the Hotel. They
are employees of the City Service
Corporation.
2. As employees of the Hotel, Amelia
Dalmacio and Renato Dazo can not be
legally terminated on September 17,
1999 and November 16, 1999
respectively, but they may be legally
terminated anytime the Hotel closes
down the Flower Shop wherein
Dalmacio and Dazo work, or earlier for
cause provided by law.
SO ORDERED. 8
Petitioner union moved for reconsideration, which
was denied in a Resolution dated 10 July 2000. On 08
September 2000, petitioner union elevated the matter
to the Court of Appeals via a petition for certiorari.
EcHTDI
In the assailed Resolution dated 16 November 2000,
the Court of Appeals dismissed the petition, to wit:
Contrary to Secs. 1, 4 and 6, in relation
to Sec. 7, Rule 43 of the 1997 Rules on
Civil Procedure, petitioner resorted to
the instant special civil action for
certiorari, instead of a petition for
review; its payment of the docket fees
is short by P10.00; and the petition is
not accompanied by a certified true
copy of the motion for reconsideration
of the decision dated January 11, 2000.
If the action were to be treated as a
petition for review, then it was filed out
of time. On July 20, 2000, petitioner
received the resolution dated July 10,
2000 denying its motion for
reconsideration of the assailed decision.
Consequently, it had until July 25,
2000, or fifteen days from notice of
denial of the motion for
reconsideration, within which to file a
petition for review (Sec. 4, Rule 43).
However, the petition was only filed on
September 8, 2000, or forty-five days
beyond the reglementary period.
WHEREFORE, the petition is
DISMISSED.
SO ORDERED. 9
Petitioner sought reconsideration, arguing that the
voluntary arbitrator's decision was rendered under
Title VII-A of the Labor Code and, therefore, is not
covered by Rule 43 of the 1997 Rules of Civil
Procedure as provided in Section 2 thereof. On 10
July 2001, the Court of Appeals rendered a resolution
denying the motion for reconsideration. 10
Hence, the instant petition, attributing the following
errors to the Court of Appeals: TIAEac
I.
THE HONORABLE COURT OF
APPEALS COMMITTED GRIEVOUS
ERROR IN RULING THAT THE
APPROPRIATE REMEDY FOR
ASSAILING THE DECISION OF
THE RESPONDENT VOLUNTARY
ARBITRATOR IS AN APPEAL BY
PETITION FOR REVIEW UNDER
RULE 43 AND NOT A PETITION
FOR CERTIORARI UNDER RULE 65
OF THE 1997 RULES OF CIVIL
PROCEDURE.
II.
THE HONORABLE COURT OF
APPEALS COMMITTED GRIEVOUS
ERROR IN DISMISSING THE
PETITION ON THE BASIS OF THE
REQUIREMENTS SET FORTH IN
RULE 43 OF THE 1997 RULES OF
CIVIL PROCEDURE. 11
Petitioner union argues that the proper remedy to
assail a decision of a voluntary arbitrator is a special
civil action for certiorari under Rule 65 of the Rules
of Court and not an appeal via a petition for review
under Rule 43. Petitioner union's theory is based on
the following ratiocinations: first, the decision of the
voluntary arbitrator is similar to the decisions
rendered by the National Labor Relations
Commission (NLRC) and the Secretary of Labor and
Employment, which become final and executory after
ten (10) calendar days from receipt of notice, in that
the Labor Code expressly disallows an appeal from
their judgment or final order; second, Section 2 of
Rule 43, which exempts judgments or final orders
issued under the Labor Code from an appeal via Rule
43, should apply with equal force to decisions of labor
voluntary arbitrators.
The petition lacks merit.
The question on the proper recourse to assail a
decision of a voluntary arbitrator has already been
settled in Luzon Development Bank v. Association of
Luzon Development Bank Employees, 12 where the
Court held that the decision or award of the voluntary
arbitrator or panel of arbitrators should likewise be
appealable to the Court of Appeals, in line with the
procedure outlines * in Revised Administrative
Circular No. 1-95 (now embodied in Rule 43 of the
1997 Rules of Civil Procedure), just like those of the
quasi-judicial agencies, boards and commissions
enumerated therein, and consistent with the original
purpose to provide a uniform procedure for the
appellate review of adjudications of all quasi-judicial
entities. 13
Subsequently, in Alcantara, Jr. v. Court of Appeals,
14 and Nippon Paint Employees Union v. Court of
Appeals, 15 the Court reiterated the aforequoted
ruling. In Alcantara, the Court held that
notwithstanding Section 2 of Rule 43, the ruling in
Luzon Development Bank still stands. The Court
explained, thus:
The provisions may be new to the
Rules of Court but it is far from being a
new law. Section 2, Rules 42 of the
1997 Rules of Civil Procedure, as
presently worded, is nothing more but a
reiteration of the exception to the
exclusive appellate jurisdiction of the
Court of Appeals, as provided for in
Section 9, Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902:
HEDCAS
(3) Exclusive appellate
jurisdiction over all final
judgments, decisions,
resolutions, orders or awards of
Regional Trial Courts and quasi-
judicial agencies,
instrumentalities, boards or
commissions, including the
Securities and Exchange
Commission, the Employees'
Compensation Commission and
the Civil Service Commission,
except those falling within the
appellate jurisdiction of the
Supreme Court in accordance
with the Constitution, the Labor
Code of the Philippines under
Presidential Decree No. 442, as
amended, the provisions of this
Act and of subparagraph (1) of
the third paragraph and
subparagraph (4) of the fourth
paragraph of Section 17 of the
Judiciary Act of 1948.
The Court took into account this
exception in Luzon Development Bank
but, nevertheless, held that the
decisions of voluntary arbitrators issued
pursuant to the Labor Code do not
come within its ambit . . . 16
On some occasions, rules of procedure may be relaxed
and on that basis the Court of Appeals could have
treated the petition for certiorari as a petition for
review under Rule 43. However, as correctly pointed
out by the Court of Appeals, the petition was filed
beyond the reglementary period for filing a petition
for review under Rule 43. It is elementary in remedial
law that the use of an erroneous mode of appeal is a
cause for dismissal of the petition for certiorari and it
has been repeatedly stressed that a petition for
certiorari is not a substitute for a lost appeal. 17
In any event, the voluntary arbitrator did not commit
any reversible error in ruling that Dacles and Valencia
were employees of CSC, an independent contractor,
whose services may be terminated upon the expiration
of the contract for cleaning services between CSC and
respondent Hyatt. There is no dispute that Dacles and
Valencia performed services at respondent Hyatt
pursuant to the said contract. The Court affirms the
ruling of the voluntary arbitrator that Dacles and
Valencia cannot be considered as employees of
respondent Hyatt in the absence of evidence to prove
that CSC had been engaged in labor-only contracting.
cSEaDA

The Court also affirms the voluntary arbitrator's
findings that Dalmacio and Dazo were project
employees, whose employment may be terminated
only upon the closure of the flower shop. Said
findings are in accord with the conditions of the
employment contracts between respondent Hyatt and
the two employees.
Well-settled is the rule that findings of fact of
administrative agencies and quasi-judicial bodies
which have acquired expertise because their
jurisdiction is confined to specific matters, are
generally accorded not only great respect but even
finality. They are binding upon this Court unless there
is a showing of grave abuse of discretion or where it is
clearly shown that they were arrived at arbitrarily or
in utter disregard of the evidence on record. 18
WHEREFORE, the instant petition for review on
certiorari is DENIED and the resolutions dated 16
November 2000 and 10 July 2001 of the Court of
Appeals in CA-G.R. SP No. 60959 are AFFIRMED.
Costs against petitioner. TIADCc
SO ORDERED.
Austria-Martinez, * Corona, ** Velasco, Jr. and
Brion, JJ., concur.
Footnotes
1. Rollo, pp. 3-26.
2. Id. at 28; penned by Justice Edgardo P. Cruz and
concurred in by Justices Eubulo G. Verzola,
Chairman of the Ninth Division, and Marina
L. Buzon. cTADCH
3. Id. at 30-31.
4. Id. at 45-50.
5. Id. at 6.
6. Id. at 7.
7. Id.
8. Id. at 157.
9. Id. at 28.
10. Supra note 3.
11. Id. at 11-12.
12. 319 Phil. 262 (1995).
13. Id. at 271.
14. G.R. No. 143397, 435 Phil. 395 (2002).
15. G.R. No. 159010, 19 November 2004, 443
SCRA 286.
16. Alcantara, Jr. v. Court of Appeals, supra note 19
at 404-405.
17. Nippon Paint Employees Union-Olalia v. Court
of Appeals, supra note 20 at 291. ETCcSa
18. Colegio de San Juan de Letran-Calamba v.
Villas, 447 Phil. 692, 700 (2003).
* Additional member per Special Order No. 593 in
lieu of J. Quisumbing who is on official leave.
** Additional member per Special Order No. 600 in
lieu of J. Carpio-Morales who is on official
leave.












FIRST DIVISION
[G.R. No. 141802. January 29, 2007.]
G & M (PHIL.), INC., petitioner, vs.
ZENAS RIVERA, respondent.
D E C I S I O N
SANDOVAL-GUTIERREZ, J p:
Before us is a Petition for Review on Certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assailing the Decision 1 dated September
13, 1999 and Resolution 2 dated January 13, 2000
rendered by the Court of Appeals in CA-G.R. SP No.
51454, entitled "G & M (Phil.) Inc., petitioner, v.
National Labor Relations Commission and Zenas
Rivera, respondents."
G & M (Phil.), Inc., petitioner, is a corporation
engaged in the placement and recruitment business of
overseas contract workers. It deployed Lorenzo
Rivera, respondent's husband, to work as equipment
driver for its foreign principal, Mohammad Al-
Hammad Recruiting Office in Riyadh, Saudi Arabia
for a period of two (2) years. After working for one 1
year, 7 months and 17 days, Lorenzo met an accident
and died on December 23, 1993.
Respondent filed with the Labor Arbiter a complaint
for unpaid salary differentials for her late husband
alleging that he was not paid his salary for 23 days
before he died. She submitted a "Final Settlement of
Liability of Foreign Employer" bearing the seal of the
Philippine Embassy at Riyadh, Saudi Arabia and
translated into English by AL AMRI Translation
Office. The Final Settlement is quoted as follows:
Entitlement Amount
1. Pending Leave Days SR 570.00
Months Day
2. Severance Pay (service award) 19 17
SR 896.81
3. Unpaid Salary 23 days SR 896.81
4. Death Compensation
TOTAL SR 2,310.14
Respondent further claimed that her husband actually
received only a monthly salary of SR 700, way below
than that he ought to receive under his contract of
employment which is US$ 600.
For its part, petitioner assailed the genuineness of the
Final Settlement for lack of proper authentication. It
pointed out that petitioner's allegation that her
husband received only a monthly salary of SR 700 is
inconsistent with the claim for unpaid salaries as it is
not possible for a worker receiving SR 700 per month
to have unpaid salaries in the amount of SR 843.33 for
23 days. It likewise questioned respondent's basis for
filing the complaint, she not being a privy to her
husband's working conditions while abroad. acCDSH
In a Decision dated November 28, 1997, the Labor
Arbiter ordered petitioner to pay respondent the
following amounts:
a) Unpaid salary
= US $23.08 per day
= US $23.08 x 23 working days
= US $530.84 or its peso equivalent its
========== actual payment
b) Salary Differential
US $ 600 x P26 = P15,600.00
SR 700 x 6.5 = P4,550.00
per month P10,050.00
x 19

Total P190,950.00
=========
c) Plus 10% of the total award for and
as attorney's fees.
On appeal, the National Labor Relations Commission
(NLRC) rendered a Decision on July 13, 1998
denying petitioner's appeal and affirming the Labor
Arbiter's judgment. Petitioner's motion for
reconsideration was denied in a Resolution dated
November 27, 1998.
Petitioner then filed a Petition for Certiorari with the
Court of Appeals contending that the Labor Arbiter
committed grave abuse of discretion in sustaining
respondent's claims.
In a Decision dated September 13, 1999, the Court of
Appeals denied the petition, sustaining the findings of
the Labor Arbiter and the NLRC, thus:
The OCW INFO SHEET clearly states
that the beneficiary of Lorenzo Rivera
is his wife Zenas Rivera, hence, the
complainant in this case is the real
party in interest because "she stands to
be benefited by the judgment in this
suit or is the party entitled to the avails
of the suit" (Salonga v. Warner, Barnes
& Co., LTD., L-2246, Jan. 31, 1951).
In the same manner, the OCW INFO
SHEET reveals that Lorenzo Rivera
ought to receive US $600.00 basic
monthly salary. Since respondent's
foreign principal keeps and maintains
the employment records, it is therefore
incumbent upon the respondent to
produce the payrolls and vouchers to
prove that complainant's deceased
husband was duly paid of his basic
monthly salary. Accordingly, whether
the "Final Settlement" adduced as
supporting evidence by complainant is
genuine or fake does not overcome the
rule that the burden on labor standards
claim rests upon the employer.
Failure therefore on the part of the
respondent to offer such payrolls and
vouchers to controvert complainant's
claim for salary differentials is fatal.
The same ruling holds true with respect
to claim for unpaid salary for 23 days.
(p. 32, Rollo)
As to petitioner's allegation of inconsistency between
the monthly salary of respondent's husband appearing
in the OCW Information Sheet and the claim of
respondent that her husband is still entitled to a salary
of SR 843.33 for 23 days, the appellate court found
that "this discrepancy is explained by the fact that
aside from his monthly salary of SR 700, the deceased
is still entitled to a monthly food allowance of SR 200
and monthly overtime pay of SR 200."
The Court of Appeals further held:
On the other hand, petitioner was the
one who failed to show that
complainant's husband has received the
salary provided for under his OCW Info
Sheet and OEC when the petitioner and
its foreign principals were the ones who
keep and maintain the employment
document of the deceased Rivera, such
as the payrolls, the vouchers and were
in the best position to show that indeed
the deceased received his monthly
salary of US $600.00 as per POEA
approved contract.
Petitioner even failed to present any
document/evidence to show/prove its
contention of payment so, in the
absence of such evidence, it can be
safely concluded that the deceased was
not paid his monthly salary as per
POEA approved contract and his
unpaid salaries were not given to him.
Petitioner filed the instant Petition for Review
alleging that: (1) the Court of Appeals gravely erred in
applying the rule on "burden of proof" against
petitioner inasmuch as non-payment of salaries, as
claimed by respondent was not sufficiently shown;
and in holding that there is no inconsistency between
the salary of petitioner's husband appearing in the
OCW Information Sheet and in the Final Settlement
considering that no evidence supports such
conclusion.
The issues raised are essentially factual. Elementary is
the principle that this Court is not a trier of facts.
Judicial review of labor cases does not go beyond the
evaluation of the sufficiency of the evidence upon
which its labor officials' findings rest. As such, the
findings of fact and conclusion of the NLRC are
generally accorded not only great weight and respect
but even clothed with finality and deemed binding on
this Court as long as they are supported by substantial
evidence. 3 This is because it is not the function of
this Court to analyze or weigh all over again the
evidence already considered in the proceedings
below; or reevaluate the credibility of witnesses; or
substitute the findings of fact of an administrative
tribunal which has expertise in its special field. In this
case, we defer to the factual findings of the Labor
Arbiter, who is deemed to have acquired expertise in
matters within his jurisdiction, specially since his
findings were affirmed in toto by the NLRC and the
Court of Appeals. 4
While there are recognized exceptions to this rule, we
found no grounds to warrant our departure from the
common findings of the three tribunals below.
WHEREFORE, we DENY the instant petition and
AFFIRM the assailed Decision of the Court of
Appeals in CA-G.R. SP No. 51454. Costs against
petitioner.
SO ORDERED.
Puno, C.J., Corona, Azcuna and Garcia, JJ., concur.
Footnotes
1. Penned by Associate Justice Mercedes Gozo-
Dadole, and concurred in by Associate Justice
Ramon A. Barcelona and Associate Justice
Demetrio G. Demetria (all retired), Annex
"A" of the petition, Rollo, pp. 20-27. EACHaI
2. Annex "B" of the petition, id., pp. 28-30.
3. Association of Integrated Security Force of Bislig
(AISFB-ALU) v. Court of Appeals, G.R. No.
140150, August 22, 2005, 467 SCRA 483.
4. Bolinao Security and Investigation, Inc. v. Toston,
G.R. No. 139135, January 29, 2004, 421
SCRA 406; Urbanes, Jr. v. Court of Appeals,
G.R. No. 138379, November 25, 2004, 444
SCRA 84.


















THIRD DIVISION
[G.R. No. 168475. July 4, 2007.]
EMILIO E. DIOKNO, VICENTE R.
ALCANTARA, ANTONIO Z.
VERGARA, JR., DANTE M. TONG,
JAIME C. MENDOZA, ROMEO M.
MACAPULAY, ROBERTO M.
MASIGLAT, LEANDRO C.
ATIENZA, ROMULO AQUINO,
JESUS SAMIA, GAUDENCIO
CAMIT, DANTE PARAO,
ALBERTO MABUGAT, EDGARDO
VILLANUEVA, JR., FRANCISCO
ESCOTO, EDGARDO SEVILLA,
FELICITO MACASAET, and JOSE
Z. TULLO, petitioners, vs. HON.
HANS LEO J. CACDAC, in his
capacity as Director of the Bureau of
Labor Relations, DOLE, MANILA,
MED-ARBITER TRANQUILINO C.
REYES, EDGARDO DAYA, PABLO
LUCAS, LEANDRO M. TABILOG,
REYNALDO ESPIRITU, JOSE
VITO, ANTONIO DE LUNA,
ARMANDO YALUNG, EDWIN
LAYUG, NARDS PABILONA,
REYNALDO REYES,
EVANGELINE ESCALL,
ALBERTO ALCANTARA,
ROGELIO CERVITILLO,
MARCELINO MORELOS,
FAUSTINO ERMINO, JIMMY S.
ONG, ALFREDO ESCALL,
NARDITO C. ALVAREZ, JAIME T.
VALERIANO, JOHNSON S.
REYES, GAUDENCIO JIMENEZ,
JR., GAVINO R. VIDANES,
ARNALDO G. TAYAO,
BONIFACIO F. CIRUJANO,
EDGARDO G. CADVONA,
MAXIMO A. CAOC, JOSE O.
MACLIT, JR., LUZMINDO D.
ACORDA, JR., LEMUEL R.
RAGASA, and GIL G. DE VERA,
respondents.
D E C I S I O N
CHICO-NAZARIO, J p:
This is a Petition for Review on Certiorari under Rule
45 of the 1997 Revised Rules of Civil Procedure,
seeking the nullification of the Decision 1 and
Resolution 2 of the Court of Appeals in CA-G.R. SP
No. 83061, dated 17 June 2004 and 10 June 2005,
respectively, which dismissed petitioners' Petition for
Certiorari and denied their Motion for
Reconsideration thereon.
The Facts
The First Line Association of Meralco Supervisory
Employees (FLAMES) is a legitimate labor
organization which is the supervisory union of
Meralco. Petitioners and private respondents are
members of FLAMES.
On 1 April 2003, the FLAMES Executive Board
created the Committee on Election (COMELEC) for
the conduct of its union elections scheduled on 7 May
2003. 3 The COMELEC was composed of petitioner
Dante M. Tong as its chairman, and petitioners Jaime
C. Mendoza and Romeo M. Macapulay as members.
Subsequently, private respondents Jimmy S. Ong,
Nardito C. Alvarez, Alfredo J. Escall, and Jaime T.
Valeriano filed their respective certificates of
candidacy. On 12 April 2003, the COMELEC rejected
Jimmy S. Ong's candidacy on the ground that he was
not a member of FLAMES. Meanwhile, the
certificates of candidacy of Nardito C. Alvarez,
Alfredo J. Escall, and Jaime T. Valeriano were
similarly rejected on the basis of the exclusion of their
department from the scope of the existing collective
bargaining agreement (CBA). The employees
assigned to the aforesaid department are allegedly
deemed disqualified from membership in the union
for being confidential employees. ITaCEc
On 24 April 2003, private respondents Jimmy S. Ong,
Nardito C. Alvarez, Alfredo J. Escall, Jaime T.
Valeriano (Ong, et al.), and a certain Leandro M.
Tabilog filed a Petition 4 before the Med-Arbitration
Unit of the Department of Labor and Employment
(DOLE). They prayed, inter alia, for the nullification
of the order of the COMELEC which disallowed their
candidacy. 5 They further prayed that petitioners be
directed to render an accounting of funds with full and
detailed disclosure of expenditures and financial
transactions; and that a representative from the Bureau
of Labor Relations (BLR) be designated to act as
chairman of the COMELEC in lieu of petitioner
Dante M. Tong. 6
On 30 April 2003, DOLE-NCR Regional Director
Alex E. Maraan issued an Order 7 directing DOLE
personnel to observe the conduct of the FLAMES
election on 7 May 2003. 8
On 2 May 2003, petitioners filed a Petition 9 with the
COMELEC seeking the disqualification of private
respondents Edgardo Daya, Pablo Lucas, Leandro
Tabilog, Reynaldo Espiritu, Jose Vito, Antonio de
Luna, Armando Yalung, Edwin Layug, Nards
Pabilona, Reynaldo Reyes, Evangeline Escall, Alberto
Alcantara, Rogelio Cervitillo, Marcelino Morelos, and
Faustino Ermino (Daya, et al.). Petitioners alleged
that Daya, et al., allowed themselves to be assisted by
non-union members, and committed acts of disloyalty
which are inimical to the interest of FLAMES. In their
campaign, they allegedly colluded with the officers of
the Meralco Savings and Loan Association
(MESALA) and the Meralco Mutual Aid and Benefits
Association (MEMABA) and exerted undue influence
on the members of FLAMES.
On 6 May 2003, the COMELEC issued a Decision, 10
declaring Daya, et al., officially disqualified to run
and/or to participate in the 7 May 2003 FLAMES
elections. The COMELEC also resolved to exclude
their names from the list of candidates in the polls or
precincts, and further declared that any vote cast in
their favor shall not be counted. According to the
COMELEC, Daya, et al., violated Article IV, Section
4 (a) (6) 11 of the FLAMES Constitution and By-
Laws (CBL) by allowing non-members to aid them in
their campaign. Their acts of solicitation for support
from non-union members were deemed inimical to the
interest of FLAMES. CAScIH
On 7 May 2003, the COMELEC proclaimed the
following candidates, including some of herein
petitioners as winners of the elections, to wit: 12
NAME POSITION
Emilio E. Diokno President
Vicente P. Alcantara Executive Vice
President External
Antonio Z. Vergara, Jr. Executive Vice
President Internal
Alberto L. Mabugat Vice-President
Organizing
Roberto D. Masiglat, Jr. Vice-President
Education
Leandro C. Atienza Vice-President
Chief Steward
Felito C. Macasaet Secretary
Edgardo R. Villanueva Asst. Secretary
Romulo C. Aquino Treasurer
Jesus D. Samia Asst. Treasurer
Gaudencio C. Camit Auditor
Rodante B. [Parao] Asst. Auditor
Jose Z. Tullo Central Coordinator
Bernardo C. Sevilla North Coordinator
Francis B. Escoto South Coordinator
On 8 May 2003, private respondents Daya, et al.,
along with Ong, et al., filed with the Med-Arbitration
Unit of the DOLE-NCR, a Petition 13 to: a) Nullify
Order of Disqualification; b) Nullify Election
Proceedings and Counting of Votes; c) Declare
Failure of Election; and d) Declare Holding of New
Election to be Controlled and Supervised by the
DOLE. The Petition was docketed as Case No. NCR-
OD-0304-002-LRD.
On 14 May 2003, another group led by private
respondent Gaudencio Jimenez, Jr., along with private
respondents Johnson S. Reyes, Gavino R. Vidanes,
Arnaldo G. Tayao, Bonifacio F. Cirujano, Edgardo G.
Cadavona, Maximo A. Caoc, Jose O. Maclit, Jr.,
Luzmindo D. Acorda, Jr., Lemuel R. Ragasa and Gil
G. de Vera (Jimenez, et al.) filed a Petition with the
Med-Arbitration Unit of the DOLE-NCR against
petitioners to nullify the 7 May 2003 election on the
ground that the same was not free, orderly, and
peaceful. It was docketed as Case No. NCR-OD-
0305-004-LRD, which was subsequently consolidated
with the Petition of Daya, et al. and the earlier
Petition of Ong, et al.
Meanwhile, the records show that a subsequent
election was held on 30 June 2004, which was
participated in and won by herein private respondents
Daya, et al. The validity of the 30 June 2004 elections
was assailed by herein petitioners before the DOLE
14 and taken to the Court of Appeals in CA-G.R. SP
No. 88264 on certiorari, which case does not concern
us in the instant Petition. The Court of Appeals, in the
aforesaid case, rendered a Decision 15 dated 12
January 2007, upholding the validity of the 30 June
2004 elections, and the declaration of herein private
respondents Daya, et al., as the duly elected winners
therein. ECcTaH
The Decision of the Med-Arbiter
On 7 July 2003, Med-Arbiter Tranquilino B. Reyes,
Jr. issued a Decision 16 in favor of private
respondents, Daya, et al. However, the petition of
Jimenez, et al., was dismissed because it was
premature, it appearing that the COMELEC had not
yet resolved their protest prior to their resort to the
Med-Arbiter. Finally, the Petition of Ong, et al.,
seeking to declare themselves as bona fide members
of FLAMES was ordered dismissed.
The Med-Arbiter noted in his decision that during a
conference which was held on 15 May 2003, the
parties agreed that the issue anent the qualifications of
private respondents Ong, et al. had been rendered
moot and academic. 17
The Med-Arbiter reversed the disqualification
imposed by the COMELEC against private
respondents Daya, et al. He said that the COMELEC
accepted all the allegations of petitioners against
private respondents Daya, et al., sans evidence to
substantiate the same. Moreover, he found that the
COMELEC erred in relying on Article IV, Section 4
(a) (6) of the CBL as basis for their disqualification.
The Med-Arbiter read the aforesaid provision to refer
to the dismissal and/or expulsion of a member from
FLAMES, but not to the disqualification of a member
as a candidate in a union election. He rationalized that
the COMELEC cannot disqualify a candidate on the
same grounds for expulsion of members, which power
is vested by the CBL on the Executive Board. The
Med-Arbiter also held that there was a denial of due
process because the COMELEC failed to receive
private respondents Daya, et al.'s motion for
reconsideration of the order of their disqualification.
The COMELEC was also found to have refused to
receive their written protest in violation of the union's
CBL. 18
Lastly, the Med-Arbiter defended his jurisdiction over
the case. He concluded that even as the election of
union officers is an internal affair of the union, his
office has the right to inquire into the merits and
conduct of the election when its jurisdiction is sought.
19
The decretal portion of the Med-Arbiter's Decision
states, viz:
WHEREFORE, premises considered,
the [P]etition to Nullify the Order of
Disqualification; Nullify Election
proceedings and counting of Votes; and
Declare a Failure of Elections is hereby
granted. The disqualification of [private
respondent] Ed[gardo] Daya, et al., is
hereby considered as null and void.
Perforce, the election of union officers
of FLAMES on May 7, 2003 is
declared a failure and a new election is
ordered conducted under the
supervision of the Department of Labor
and Employment. TAaCED

The [P]etition to conduct an accounting
of union funds and to stop the release of
funds to [petitioner] Diokno, et al., is
ordered dismissed for lack of merit.
And the Petition to Declare [private
respondents] Jimmy Ong, Alfredo
[E]scall, Nardito Alvarez, and Jaime
Valeriano as members of FLAMES is
hereby ordered dismissed for lack of
merit.
The [P]etition to Nullify the election
filed by [private respondents]
Gaudencio Jimenez, et al., is likewise
ordered dismissed. 20
Aggrieved, petitioners filed an appeal before the
Director of the BLR.
The Ruling of the BLR Director
On 3 December 2003, the Director of the BLR issued
a Resolution, 21 affirming in toto the assailed
Decision of the Med-Arbiter.
Public respondent Director Hans Leo J. Cacdac ruled,
inter alia, that the COMELEC's reliance on Article
IV, Section 4 (a) (6) of the CBL, as a ground for
disqualifying private respondents Daya, et al., was
premature. He echoed the interpretation of the Med-
Arbiter that the COMELEC erroneously resorted to
the aforecited provision which refers to the expulsion
of a member from the union on valid grounds and
with due process, along with the requisite 2/3 vote of
the Executive Board. Hence, the COMELEC cut short
the expulsion proceedings in disqualifying private
respondents Daya, et al. 22 The BLR Director further
held that the case involves a question of
disqualification on account of the alleged commission
by private respondents Daya, et al., of illegal
campaign acts, which acts were not specifically
mentioned in the guidelines for the conduct of
election as issued by the COMELEC. Likewise, on
the alleged refusal of private respondents Daya, et al.,
to submit to the jurisdiction of the COMELEC by
failing to file a petition to nullify its order of
disqualification, the BLR Director deemed the same
as an exception to the rule on exhaustion of
administrative remedies. Thus: TCAHES
By themselves, such acts could not be
taken as repugnant of COMELEC's
authority. Sensing that they were
prejudiced by the disqualification order,
it was only incumbent upon [private
respondents Daya, et al.] to seek
remedy before a body, which they
thought has a more objective
perspective over the situation. In short,
they opted to bypass the administrative
remedies within the union. Such a
move could not be taken against
[private respondents Daya, et al.]
considering that non-exhaustion of
administrative remedies is justified in
instances where it would practically
amount to a denial of justice, or would
be illusory or vain, as in the present
controversy. 23
The BLR Director disposed in this wise:
WHEREFORE, the appeal is
DISMISSED for lack of merit. The
Decision of Med-Arbiter Tranquilino
B. Reyes, DOLE-NCR, dated 7 July
2003 is AFFIRMED in its entirety.
Let the records of this case be returned
to the DOLE-NCR for the immediate
conduct of election of officers of the
First Line Association of Meralco
Supervisory Employees (FLAMES)
under the supervision of DOLE-NCR
personnel. 24
Subsequently, petitioners sought a reversal of the 3
December 2003 Resolution, but the BLR Director
issued a Resolution dated 10 February 2003, 25
refusing to reverse his earlier Resolution for lack of
merit.
Petitioners elevated the case to the Court of Appeals
via a Petition for Certiorari.
The Ruling of the Court of Appeals
The Court of Appeals found petitioners' appeal to be
bereft of merit.
The appellate court held that the provision relied upon
by the COMELEC concerns the dismissal and/or
expulsion of union members, which power is vested
in the FLAMES' Executive Board, and not the
COMELEC. It affirmed the finding of the BLR
Director that the COMELEC, in disqualifying private
respondents Daya, et al., committed a procedural
shortcut. It held:
Without the requisite two-thirds (2/3)
vote of the Executive Board dismissing
and/or expelling private respondents for
acts contemplated thereunder, the
COMELEC was clearly violating the
union's constitution and bylaws (sic) by
utilizing the aforequoted provision in
its said May 6, 2003 decision and, in
the process, arrogating unto itself a
power it did not possess. As the
document embodying the covenant
between a union and its members and
the fundamental law governing the
members' rights and obligations, it goes
without saying that the constitution and
bylaws (sic) should be upheld for as
long as they are not contrary to law,
good morals or public policy. 26
EICSDT
On the matter of the failure of private respondents
Daya, et al. to come up with 30 percent (30%)
members' support in filing the Petition to Nullify the
COMELEC's Decision before the Med-Arbiter, the
Court of Appeals said that the petition did not involve
the entire membership of FLAMES, so there was no
need to comply with the aforesaid requirement.
Furthermore, the appellate court applied the exception
to the rule on exhaustion of administrative remedies
on the ground, inter alia, that resort to such a remedy
would have been futile, illusory or vain. 27 Indeed,
the Court of Appeals emphasized that private
respondents Daya, et al., were directed by the
COMELEC to file their Answer to the petition for
their disqualification only on 5 May 2003. Private
respondents Daya, et al., filed their Answer on 6 May
2003. On the same day, the COMELEC issued its
Decision disqualifying them. A day after, the 7 May
2003 election was held. The Court of Appeals further
stressed that private respondents Daya, et al.'s efforts
to have their disqualification reconsidered were
rebuffed by the COMELEC; hence, they were left
with no choice but to seek the intervention of the
BLR, 28 which was declared to have jurisdiction over
intra-union disputes even at its own initiative under
Article 226 29 of the Labor Code.
Petitioners sought a reconsideration of the 17 June
2004 Decision of the Court of Appeals, but the same
was denied in a Resolution 30 dated 10 June 2005.
Hence, the instant Petition.
At the outset, petitioners contend that the instant
Petition falls under the exceptions to the rule that the
Supreme Court is not a trier of facts. They implore
this Court to make factual determination anent the
conduct of the 7 May 2003 elections. They also
question the jurisdiction of the BLR on the case at bar
because of the failure of private respondents Daya, et
al., to exhaust administrative remedies within the
union. It is the stance of petitioner that Article 226 31
of the Labor Code which grants power to the BLR to
resolve inter-union and intra-union disputes is dead
law, and has been amended by Section 14 of Republic
Act No. 6715, whereby the conciliation, mediation
and voluntary arbitration functions of the BLR had
been transferred to the National Conciliation and
Mediation Board.
Petitioners similarly assert that the 7 May 2003
election was conducted in a clean, honest, and orderly
manner, and that private respondents, some of whom
are not bona fide members of FLAMES, were validly
disqualified by the COMELEC from running in the
election. They also rehashed their argument that non-
members of the union were allowed by private
respondents Daya, et al., to participate in the affair.
They challenge the finding of the BLR Director that
the reliance by the COMELEC on Article IV, Section
4 (a) (6) of the CBL, was premature. Petitioners insist
that the COMELEC had the sole and exclusive power
to pass upon the qualification of any candidate, and
therefore, it has the correlative power to disqualify
any candidate in accordance with its guidelines.
SHIcDT
For their part, private respondents Daya, et al.,
maintain that the Petition they filed before the DOLE-
NCR Med-Arbiter questioning the disqualification
order of the COMELEC and seeking the nullification
of the 7 May 2003 election involves an intra-union
dispute which is within the jurisdiction of the BLR.
They further claim that the COMELEC, in
disqualifying them, mistakenly relied on a provision
in the FLAMES' CBL that addresses the expulsion of
members from the union, and no expulsion
proceedings were held against them. Finally, they
underscore the finding of the appellate court that there
was disenfranchisement among the general
membership of FLAMES due to their wrongful
disqualification which restricted the members' choices
of candidates. They reiterate the conclusion of the
Court of Appeals that had the COMELEC tabulated
the votes cast in their favor, there would have been, at
least, a basis for the declaration that they lost in the
elections.
Issues
Petitioners attribute to the Court of Appeals several
errors to substantiate their Petition. 32 They all boil
down, though, to the question of whether the Court of
Appeals committed grave abuse of discretion when it
affirmed the jurisdiction of the BLR to take
cognizance of the case and then upheld the ruling of
the BLR Director and Med-Arbiter, nullifying the
COMELEC's order of disqualification of private
respondents Daya et al., and annulling the 7 May
2003 FLAMES elections.
The Court's Ruling
The Petition is devoid of merit.
We affirm the finding of the Court of Appeals
upholding the jurisdiction of the BLR. Article 226 of
the Labor Code is hereunder reproduced, to wit:
ART. 226. BUREAU OF LABOR
RELATIONS. The Bureau of Labor
Relations and the Labor Relations
Divisions in the regional offices of the
Department of Labor shall have
original and exclusive authority to act,
at their own initiative or upon request
of either or both parties, on all inter-
union and intra-union conflicts, and all
disputes, grievances or problems
arising from or affecting labor-
management relations in all workplaces
whether agricultural or nonagricultural,
except those arising from the
implementation or interpretation of
collective bargaining agreements which
shall be the subject of grievance
procedure and/or voluntary arbitration.
DAEIHT
The Bureau shall have fifteen (15)
working days to act on labor cases
before it, subject to extension by
agreement of the parties.

The amendment to Article 226, as couched in
Republic Act No. 6715, 33 which is relied upon by
petitioners in arguing that the BLR had been divested
of its jurisdiction, simply reads, thus:
Sec. 14. The second paragraph of
Article 226 of the same Code is
likewise hereby amended to read as
follows:
"The Bureau shall have fifteen (15)
calendar days to act on labor cases
before it, subject to extension by
agreement of the parties."
This Court in Bautista v. Court of Appeals, 34
interpreting Article 226 of the Labor Code, was
explicit in declaring that the BLR has the original and
exclusive jurisdiction on all inter-union and intra-
union conflicts. We said that since Article 226 of the
Labor Code has declared that the BLR shall have
original and exclusive authority to act on all inter-
union and intra-union conflicts, there should be no
more doubt as to its jurisdiction. As defined, an intra-
union conflict would refer to a conflict within or
inside a labor union, while an inter-union controversy
or dispute is one occurring or carried on between or
among unions. 35 More specifically, an intra-union
dispute is defined under Section (z), Rule I of the
Rules Implementing Book V of the Labor Code, viz:
(z) "Intra-Union Dispute" refers to any
conflict between and among union
members, and includes all disputes or
grievances arising from any violation of
or disagreement over any provision of
the constitution and by-laws of a union,
including cases arising from chartering
or affiliation of labor organizations or
from any violation of the rights and
conditions of union membership
provided for in the Code.
The controversy in the case at bar is an intra-union
dispute. There is no question that this is one which
involves a dispute within or inside FLAMES, a labor
union. At issue is the propriety of the disqualification
of private respondents Daya, et al., by the FLAMES
COMELEC in the 7 May 2003 elections. It must also
be stressed that even as the dispute involves
allegations that private respondents Daya, et al.,
sought the help of non-members of the union in their
election campaign to the detriment of FLAMES, the
same does not detract from the real character of the
controversy. It remains as one which involves the
grievance over the constitution and by-laws of a
union, and it is a controversy involving members of
the union. Moreover, the non-members of the union
who were alleged to have aided private respondents
Daya, et al., are not parties in the case. We are,
therefore, unable to understand petitioners' persistence
in placing the controversy outside of the jurisdiction
of the BLR. The law is very clear. It requires no
further interpretation. The Petition which was initiated
by private respondents Daya, et al., before the BLR
was properly within its cognizance, it being an intra-
union dispute. Indubitably, when private respondents
Daya, et al., brought the case to the BLR, it was an
invocation of the power and authority of the BLR to
act on an intra-union conflict.
After having settled the jurisdiction of the BLR, we
proceed to determine if petitioners correctly raised the
argument that private respondents Daya, et al.,
prematurely sought the BLR's jurisdiction on the
ground that they failed to exhaust administrative
remedies within the union. On this matter, we affirm
the findings of the Court of Appeals which upheld the
application by the BLR Director of the exception to
the rule of exhaustion of administrative remedies.
2005jur
In this regard, this Court is emphatic that "before a
party is allowed to seek the intervention of the court,
it is a pre-condition that he should have availed of all
the means of administrative processes afforded him.
Hence, if a remedy within the administrative
machinery can still be resorted to by giving the
administrative officer concerned every opportunity to
decide on a matter that comes within his jurisdiction
when such remedy should be exhausted first before
the court's judicial power can be sought. The
premature invocation of court's judicial intervention is
fatal to one's cause of action." 36
Verily, there are exceptions to the applicability of the
doctrine. 37 Among the established exceptions are: 1)
when the question raised is purely legal; 2) when the
administrative body is in estoppel; 3) when the act
complained of is patently illegal; 4) when there is
urgent need for judicial intervention; 5) when the
claim involved is small; 6) when irreparable damage
will be suffered; 7) when there is no other plain,
speedy, and adequate remedy; 8) when strong public
interest is involved; 9) when the subject of the
proceeding is private land; 10) in quo warranto
proceedings; 38 and 11) where the facts show that
there was a violation of due process. 39 As aptly
determined by the BLR Director, private respondents
Daya, et al., were prejudiced by the disqualification
order of the COMELEC. They endeavored to seek
reconsideration, but the COMELEC failed to act
thereon. 40 The COMELEC was also found to have
refused to receive their written protest. 41 The
foregoing facts sustain the finding that private
respondents Daya, et al., were deprived of due
process. Hence, it becomes incumbent upon private
respondents Daya, et al., to seek the aid of the BLR.
To insist on the contrary is to render their exhaustion
of remedies within the union as illusory and vain. 42
These antecedent circumstances convince this Court
that there was proper application by the Med-Arbiter
of the exception to the rule of exhaustion of
administrative remedies, as affirmed by the BLR
Director, and upheld by the Court of Appeals.
We cannot accept, and the Court of Appeals rightfully
rejected, the contention of petitioners that the private
respondents Daya, et al.'s complaint filed before the
Med-Arbiter failed to comply with the jurisdictional
requirement because it was not supported by at least
thirty percent (30%) of the members of the union.
Section 1 of Rule XIV of the Implementing Rules of
Book V mandates the thirty percent (30%)
requirement only in cases where the issue involves the
entire membership of the union, which is clearly not
the case before us. The issue is obviously limited to
the disqualification from participation in the elections
by particular union members.
Having resolved the jurisdictional cobwebs in the
instant case, it is now apt for this Court to address the
issue anent the disqualification of private respondents
and the conduct of the 7 May 2003 elections.
On this matter, petitioners want this Court to consider
the instant case as an exception to the rule that the
Supreme Court is not a trier of facts; hence,
importuning that we make findings of fact anew. It
bears stressing that in a petition for review on
certiorari, the scope of this Court's judicial review of
decisions of the Court of Appeals is generally
confined only to errors of law, 43 and questions of
fact are not entertained. We elucidated on our fidelity
to this rule, and we said:
Thus, only questions of law may be
brought by the parties and passed upon
by this Court in the exercise of its
power to review. Also, judicial review
by this Court does not extend to a
reevaluation of the sufficiency of the
evidence upon which the proper labor
tribunal has based its determination. 44
SCEDaT
It is aphoristic that a re-examination of factual
findings cannot be done through a petition for review
on certiorari under Rule 45 of the Rules of Court
because as earlier stated, this Court is not a trier of
facts; it reviews only questions of law. 45 The
Supreme Court is not duty-bound to analyze and
weigh again the evidence considered in the
proceedings below. 46 This is already outside the
province of the instant Petition for Certiorari. While
there may be exceptions to this rule, petitioners
miserably failed to show why the exceptions should
be applied here. With greater force must this rule be
applied in the instant case where the factual findings
of the Med-Arbiter were affirmed by the BLR
Director, and then, finally, by the Court of Appeals.
The findings below had sufficient bases both in fact
and in law. The uniform conclusion was that private
respondents Daya, et al., were wrongfully disqualified
by the COMELEC; consequently, the FLAMES
election should be annulled.
On the issue of disqualification, there was a blatant
misapplication by the COMELEC of the FLAMES'
CBL. As has been established ad nauseam, the
provision 47 relied upon by the COMELEC in
disqualifying private respondents Daya, et al., applies
to a case of expulsion of members from the union.
In full, Article IV, Section 4 (a) (6) of the FLAMES'
CBL, provides, to wit:
Section 4 (a). Any member may be
DISMISSED and/or EXPELLED from
the UNION, after due process and
investigation, by a two-thirds (2/3) vote
of the Executive Board, for any of the
following causes:
xxx xxx xxx
(6) Acting in a manner harmful to the
interest and welfare of the UNION
and/or its MEMBERS. 48
We highlight five points, thus:
First, Article IV, Section 4 (a) (6) of the FLAMES'
CBL, embraces exclusively the case of dismissal
and/or expulsion of members from the union. Even a
cursory reading of the provision does not tell us that
the same is to be automatically or directly applied in
the disqualification of a candidate from union
elections, which is the matter at bar. It cannot be
denied that the COMELEC erroneously relied on
Article IV, Section 4 (a) (6) because the same does
not contemplate the situation of private respondents
Daya, et al. The latter are not sought to be expelled or
dismissed by the Executive Board. They were brought
before the COMELEC to be disqualified as candidates
in the 7 May 2003 elections. aSECAD
Second, the aforecited provision evidently enunciates
with clarity the procedural course that should be taken
to dismiss and expel a member from FLAMES. The
CBL is succinct in stating that the dismissal and
expulsion of a member from the union should be after
due process and investigation, the same to be
exercised by two-thirds (2/3) vote of the Executive
Board for any of the causes 49 mentioned therein. The
unmistakable directive is that in cases of expulsion
and dismissal, due process must be observed as laid
down in the CBL.

Third, nevertheless, even if we maintain a lenient
stance and consider the applicability of Article IV,
Section 4 (a) (6) in the disqualification of private
respondents Daya, et al., from the elections of 7 May
2003, still, the disqualification made by the
COMELEC pursuant to the subject provision was a
rank disregard of the clear due process requirement
embodied therein. Nowhere do we find that private
respondents Daya, et al. were investigated by the
Executive Board. Neither do we see the observance of
the voting requirement as regards private respondents
Daya, et al. In all respects, they were denied due
process.
Fourth, the Court of Appeals, the BLR Director, and
the Med-Arbiter uniformly found that due process was
wanting in the disqualification order of the
COMELEC. We are in accord with their conclusion.
If, indeed, there was a violation by private
respondents Daya, et al., of the FLAMES' CBL that
could be a ground for their expulsion and/or dismissal
from the union, which in turn could possibly be made
a ground for their disqualification from the elections,
the procedural requirements for their expulsion should
have been observed. In any event, therefore, whether
the case involves dismissal and/or expulsion from the
union or disqualification from the elections, the
proper procedure must be observed. The
disqualification ruled by the COMELEC against
private respondents Daya, et al., must not be allowed
to abridge a clear procedural policy established in the
FLAMES' CBL. If we uphold the COMELEC, we are
countenancing a clear case of denial of due process
which is anathema to the Constitution of the
Philippines which safeguards the right to due process.
Fifth, from another angle, the erroneous
disqualification of private respondents Daya, et al.,
constituted a case of disenfranchisement on the part of
the member-voters of FLAMES. By wrongfully
excluding them from the 7 May 2003 elections, the
options afforded to the union members were clipped.
Hence, the mandate of the union cannot be said to
have been rightfully determined. The factual
irregularities in the FLAMES elections clearly
provide proper bases for the annulment of the union
elections of 7 May 2003. ASCTac
On a final note, as it appears that the question of the
qualifications of private respondents Ong, et al. had
been rendered moot and academic, 50 we do not find
any reason for this Court to rule on the matter. As
borne out by the records, the question had been laid to
rest even when the case was still before the Med-
Arbiter. 51
WHEREFORE, the Petition is DENIED. The
Decision of the Court of Appeals dated 17 June 2004,
and its Resolution dated 10 June 2005 in CA-G.R. SP
No. 83061 are AFFIRMED. Costs against petitioners.
SO ORDERED.
Ynares-Santiago, Austria-Martinez and Nachura, JJ.,
concur.
Footnotes
1. Penned by Associate Justice Rebecca de Guia-
Salvador with Associate Justices Salvador J.
Valdez, Jr., and Aurora Santiago-Lagman,
concurring. Rollo, pp. 62-72.
2. Id. at 74-75.
3. According to Section 5, Article V of the
FLAMES Constitution and By-Laws, the
OFFICERS of the UNION shall hold office
for a period of three (3) years from the date of
their election until their successors shall have
been duly elected and qualified; provided that
they remain members of the UNION in good
standing. Id. at 83.
4. Id. at 88-103.
5. Id. at p. 100.
6. Id.
7. Id. at 105.
8. DOLE personnel were assigned to the following
precincts, to wit:
a) Head Office Ortigas
b) Manila Sector
c) Pasig Sector
d) Balintawak Sector
e) Valenzuela Sector
f) Alabang Sector
g) Plaridel Sector
h) Rizal Sector
i) Sta. Rosa Sector
j) Dasmarias Sector
k) San Pablo Sector. Id.
9. Id. at 106-113.
10. Id. at 121-128.
11. Section 4.
(a) Any member may be DISMISSED and/or
EXPELLED from the UNION, after due
process and investigation, by a two-thirds
(2/3) vote of the Executive Board for any of
the following causes:
xxx xxx xxx
6. Acting in a manner harmful to the interest and
welfare of the UNION and/or its MEMBERS.
12. Rollo, p. 129.
13. Id. at 130.
14. From the Decision dated 12 January 2007 of the
Court of Appeals in CA-G.R. SP No. 88264,
it can be gleaned that on 4 October 2004,
Med-Arbiter Tranquilino C. Reyes proclaimed
private respondents Daya, et al. as the duly
elected winners. On appeal, BLR Director
Hans Leo J. Cacdac affirmed the Med-Arbiter
and upheld the validity of the 30 June 2004
election, as well as the propriety of the
proclamation of private respondents Daya, et
al., as officers-elect of FLAMES. Id. at 420.
HDATCc
15. Penned by Associate Justice Lucas P. Bersamin
with Associate Justices Martin S. Villarama,
Jr., and Lucenito N. Tagle, concurring; id. at
417-435.
16. Id. at 170-183.
17. Id. at 176, 179. Notwithstanding his statement in
the Decision dated 7 July 2003, that the
parties had agreed in a conference on 15 May
2003 that the qualifications of private
respondents Ong, et al. became moot and
academic, the Med-Arbiter proceeded to rule
that Jimmy S. Ong is not a member of
FLAMES as he was assigned to the
Accounting Department which had been
excluded from the bargaining unit per
Addendum to the 1998 CBA. The Med-
Arbiter said that Ong's transfer to a
department not excluded from the bargaining
unit per the 2002 CBA as well as the
deduction from his salary of union dues did
not automatically make him a member of
FLAMES. It was not shown that he filed an
application for membership nor was the same
approved by the union president. Moreover,
the Med-Arbiter stressed that private
respondents Alfredo J. Escall, Nardito C.
Alvarez, and Jaime T. Valeriano are
disqualified from FLAMES membership
because they belong to departments excluded
from the bargaining unit pursuant to 2002
CBA. The group of Ong, et al. were found to
have no corresponding right to inquire into the
funds of the union.
18. The Med-Arbiter in his Decision, cited Article
IX, Section 1 of the FLAMES CBL, which
provides, thus:
Section 1.
xxx xxx xxx
(c) In the event of any election protest or questions,
the COMELEC shall rule [on] such protest or
questions regarding the conduct of the
election provided that the protest or questions
must be submitted in writing within twenty-
four (24) hours from the time that the last
ballot has been officially opened. The
COMELEC has three (3) days to decide the
protest or question.
19. Id. at 181.
20. Id. at 183.
21. Penned by Director Hans Leo J. Cacdac; id. at
209-216.
22. Id. at 214.
23. Id. at 216.
24. Id.
25. Id. at 217-220.
26. Id. at 69.
27. The Court of Appeals expounded in this wise,
thus:
Although the rule had, likewise, been long-settled
that redress must first be sought within the
union itself, in accordance with its
constitution and bylaws (sic), before a case
should be elevated to the jurisdiction of labor
agencies, said requirement had been
traditionally held inapplicable under the
following circumstances, to wit: (a) when
resort to the remedy would be futile, illusory
or vain; (b) when the remedy applied for was
not acted upon for an unreasonable length of
time; (c) when the relief sought was simply
for damages; (d) when the act complained of
is contrary to the constitution and bylaws
(sic); (e) when the issue is purely a question
of law; and (f) when due process was not
observed. Id. at 71. SEcITC
28. Id. at 70.
29. ART. 226. BUREAU OF LABOR
RELATIONS. The Bureau of Labor
Relations and the Labor Relations Division in
the regional offices of the Department of
Labor shall have original and exclusive
authority to act, at their own initiative or upon
request of either or both parties, on all inter-
union and intra-union conflicts, and all
disputes, grievances or problems arising from
or affecting labor-management relations in all
workplaces whether agricultural or
nonagricultural, except those arising from the
implementation or interpretation of collective
bargaining agreements which shall be the
subject of grievance procedure and/or
voluntary arbitration.
The Bureau shall have fifteen (15) working days to
act on labor cases before it, subject to
extension by agreement of the parties.
30. Id. at 74.
31. Supra note 29.
32. Id. at 367.
33. Entitled AN ACT TO EXTEND PROTECTION
TO LABOR, STRENGTHEN THE
CONSTITUTIONAL RIGHTS OF
WORKERS TO SELF-ORGANIZATION,
COLLECTIVE BARGAINING AND
PEACEFUL CONCERTED ACTIVITIES,
FOSTER INDUSTRIAL PEACE AND
HARMONY, PROMOTE THE
PREFERENTIAL USE OF VOLUNTARY
MODES OF SETTLING LABOR
DISPUTES, AND REORGANIZE THE
NATIONAL LABOR RELATIONS
COMMISSION, AMENDING FOR THESE
PURPOSES CERTAIN PROVISIONS OF
PRESIDENTIAL DECREE NO. 442, AS
AMENDED, OTHERWISE KNOWN AS
THE LABOR CODE OF THE
PHILIPPINES, APPROPRIATING FUNDS
THEREFOR AND FOR OTHER
PURPOSES. aSIDCT
34. G.R. 123375, 28 February 2005, 452 SCRA 406,
420.
35. Id.
36. Metro Drug Distribution, Inc. v. Metro Drug
Corporation Employees Association-
Federation of Free Workers, G.R. No.
142666, 26 September 2005, 471 SCRA 45,
58, citing Ambil, Jr. v. Commission on
Elections, G.R. No. 143398, 25 October 2000,
344 SCRA 372.
37. Morcal v. Lavia, G.R. No. 166753, 29
November 2005, 476 SCRA 508, 512-513.
38. Id.
39. Verceles v. Bureau of Labor Relations-
Department of Labor and Employment-
National Capital Region, G.R. No. 153322,
15 February 2005, 451 SCRA 338, 349.
40. Id. at 175.
41. Id.
42. Rollo, p. 216.
43. Gerlach v. Reuters Limited, Phils., G.R. No.
148542, 17 January 2005, 448 SCRA 535,
544-545.
44. Id.
45. Umpoc v. Mercado, G.R. No. 158166, 21
January 2005, 449 SCRA 220, 235.
46. Id.
47. Article IV, Section 4 (a) (6) of the FLAMES'
CBL.
48. Rollo, p. 82 and its dorsal page.
49. (1) Non-payment of dues and other monetary
obligations for a reasonable period of time,
subject to the provisions of Article X;
(2) Joining or forming another UNION;
(3) Violation of any provision of the Constitution,
By-laws, rules and regulations of the UNION;
(4) Willfull (sic) violation of any provision of the
Collective Bargaining Agreement (CBA);

(5) Urging or advocating that a member start an
action in any court of justice against the
UNION or any of its officers, without first
exhausting all internal remedies open to him
or available in accordance with the
constitution and by-laws of the UNION;
ICAcTa
(6) Acting in a manner harmful to the interest and
welfare of the UNION and/or its MEMBERS;
id.
50. Supra note 17.
51. Id.
THIRD DIVISION
[G.R. No. 180551. February 10, 2009.]
ERWIN H. REYES, petitioner, vs.
NATIONAL LABOR RELATIONS
COMMISSION, COCA-COLA
BOTTLERS PHILS. and/or
ROTAIDA TAGUIBAO, respondents.
D E C I S I O N
CHICO-NAZARIO, J p:
Before this Court is a Special Civil Action for
Certiorari under Rule 65 of the Revised Rules of
Court filed by petitioner Erwin H. Reyes, seeking to
reverse and set aside the Resolutions dated 10
November 2006 1 and 9 November 2007 2 of the
Court of Appeals in CA-G.R. SP No. 96343. In its
assailed Resolutions, the appellate court dismissed
petitioner's Petition for Certiorari therein for failure
to give an explanation why copy of the said Petition
was not personally served upon the counsel of the
respondents.
The present Petition arose from a Complaint for
illegal dismissal with claims for moral and exemplary
damages and attorney's fees filed by petitioner against
respondents Coca Cola Bottlers Philippines (CCBP)
and Rotaida Taguibao (Taguibao) before the Labor
Arbiter on 14 June 2004.
Respondent CCBP is a corporation engaged in the
business of production and distribution of carbonated
drinks, and Taguibao is its Human Resource Manager.
CEaDAc
In his Complaint, petitioner alleged that he was first
employed by respondent CCBP, through Interserve
Manpower Agency (Interserve), as a Leadman in
February 1988. Petitioner was initially assigned to the
Mendiola Sales Office of respondent CCBP.
Petitioner's employment contract was renewed every
five months and he was assigned a different task every
time. Such an arrangement continued until petitioner
was directly hired by respondent CCBP as a Route
Salesman on 15 September 2000. Exactly one year
from the time of petitioner's employment as a Route
Salesman, respondent CCBP, thru Taguibao,
terminated his services on 15 September 2001. Since
he already acquired the status of a regular employee,
petitioner asserted that his dismissal from
employment without the benefit of due process was
unlawful.
In opposing the Complaint, respondent CCBP refuted
petitioner's allegation that he was a regular employee.
Petitioner's employment was for a fixed period of
three months, which was subsequently extended 3
with petitioner's consent. Petitioner was employed
pursuant to the mini-bodega project of respondent
CCBP wherein respondent CCBP sought to extend its
market to areas that cannot be serviced by its regular
salesmen. After the viability of this marketing scheme
was found to be unsuccessful, respondent CCBP was
constrained to discontinue petitioner's fixed-term
employment. In addition, respondent Taguibao had no
liability for terminating petitioner's employment when
it was not effected in bad faith. DEcSaI
On 30 April 2005, the Labor Arbiter promulgated his
Decision, 4 favoring petitioner, since there was
insufficient evidence to sustain the averment of
respondents CCBP and Taguibao that petitioner's
employment was for a fixed period. The Labor Arbiter
noted that respondents CCBP and Taguibao failed to
present a copy of petitioner's purported Contract of
Employment. The only evidence adduced by
respondents CCBP and Taguibao to buttress their
contention of petitioner's fixed-period employment
was the Affidavit of respondent Taguibao herself,
which could not be afforded any evidentiary weight in
the absence of independent corroborating evidence.
The Labor Arbiter thus decreed:
WHEREFORE, all the foregoing
premises being considered, judgment is
hereby rendered ordering [herein
respondents CCBP and Taguibao] as
follows:
(1) To reinstate [herein petitioner] to
his former position as route salesman,
or to any substantially equivalent
position with all the rights, privileges,
and benefits appertaining thereto
including seniority rights;
(2) To pay [petitioner] his full
backwages which as of August 30,
2005 already amount to P565,500.00
subject to re-computation to include
salary increases granted during the
intervening period and during the
pendency of the instant case, as well as
benefits and privileges due a regular
employee; and acEHSI
(3) To pay [petitioner] the award of
attorney's fees equivalent to 10% of the
total judgment sum.
In compliance with the directive of the Labor Arbiter,
respondents CCBP and Taguibao immediately
reinstated petitioner to his former position as Route
Salesman on 1 March 2006. 5 However, respondents
CCBP and Taguibao, by filing a Memorandum of
Appeal before the National Labor Relations
Commission (NLRC) and posting the corresponding
Supersedeas Bond, sought the stay of the execution of
the monetary awards made by the Labor Arbiter in his
Decision. Respondents CCBP and Taguibao asserted
in their appeal that petitioner was merely employed
for a particular project which turned out to be not
viable. Petitioner was subsequently terminated from
work on account of the expiration of his employment
contract. Petitioner's claim of illegal dismissal was,
therefore, tenuous.
On 31 May 2006, the NLRC promulgated its Decision
6 dismissing the appeal of respondents CCBP and
Taguibao and affirming with modification the 30
April 2005 Decision of the Labor Arbiter. The NLRC
reduced the amount of backwages awarded to
petitioner underscoring the latter's unexplained delay
(more than three years) in filing his Complaint for
illegal dismissal. Instead, the NLRC reckoned the
computation of backwages only from the time
petitioner filed his Complaint for illegal dismissal
before the Labor Arbiter. 7 The NLRC further
modified the Labor Arbiter's Decision by deleting the
order reinstating petitioner to his former position in
view of the confidential nature of the latter's
employment as a salesman, which exposed him to
voluminous financial transactions involving the
property of respondent CCBP. The NLRC likewise
deleted the Labor Arbiter's award for attorney's fees.
The fallo of the NLRC Decision reads: cdasia2005
WHEREFORE, the decision dated 30
April 2005 is MODIFIED. The order
reinstating [herein petitioner] is deleted.
[Respondents CCBP and Taguibao] are
hereby ordered to pay [petitioner] the
following:
1. Backwages:
24 October 2004 to 30 April
2005
Salary P13,000 x 6.2 months
= P80,200.00
13th month pay P80,600 =
6,716.67

12 P87,316.67
2. Separation Pay
1 September 2000 to 30 April
2005
P13,000 x 5 years = P65,000.00

P152,316.67
The award of 10% attorney's fees is
deleted.
All the parties, namely petitioner and respondents
CCBP and Taguibao, moved for the reconsideration
of the foregoing NLRC Decision. Petitioner, on one
hand, maintained that the reckoning point for the
computation of his backwages must be from the time
his employment was unlawfully terminated, and not
from the institution of his Complaint for illegal
dismissal. Respondents CCBP and Taguibao, on the
other hand, reiterated their previous position that
petitioner's employment was terminated only after the
expiration of the fixed period for the same; and prayed
that the NLRC vacate its previous finding of illegal
dismissal.
In a Resolution dated 13 July 2006, the NLRC denied
the Motions for Reconsideration of all the parties for
lack of a valid reason to disturb its earlier disposition.
aIAcCH
From the 13 July 2006 Resolution of the NLRC, only
petitioner elevated his case before the Court of
Appeals by filing a Petition for Certiorari, which was
docketed as CA-G.R. S.P. No. 96343. Petitioner
averred in his Petition that the NLRC abused its
discretion in ignoring the established facts and legal
principles when it modified the award for his
backwages and deleted the order for his reinstatement.
The Court of Appeals, however, in its Resolution
dated 10 November 2006, dismissed petitioner's
Petition for Certiorari for his failure to give any
explanation why a copy of the said Petition was not
personally served upon the counsel of the adverse
parties. aAIcEH
Since petitioner failed to timely file a Motion for
Reconsideration, the Resolution dated 10 November
2006 of the Court of Appeals became final and
executory, and an Entry of Judgment was made in
CA-G.R. S.P. No. 96343 on 2 December 2006.
On 19 July 2007, petitioner's new counsel filed an
Entry of Appearance with an Urgent Motion for
Reconsideration. Petitioner, through his new counsel,
sought for the liberality of the Court of Appeals,
faulting his former counsel for the procedural defects
of his Petition and for his failure to seasonably seek
reconsideration of the 10 November 2006 Resolution
of the appellate court. Also, this time, it would appear
that petitioner provided the explanation required by
Section 11, Rule 13 of the Revised Rules of Court.
In a Resolution dated 9 November 2007, the Court of
Appeals denied petitioner's Urgent Motion for
Reconsideration for being filed out of time.
Hence, petitioner comes before this Court via the
instant Special Civil Action for Certiorari assailing
the Resolutions dated 10 November 2006 and 9
November 2007 of the Court of Appeals. Petitioner
raises the following issues in the Petition at bar:
I.
WHETHER OR NOT THE COURT
OF APPEALS GRAVELY ABUSED
ITS DISCRETION IN NOT
EXCUSING PETITIONER'S
PROCEDURAL LAPSES.
II.
WHETHER OR NOT THE NLRC
GRAVELY ABUSED ITS
DISCRETION IN REDUCING THE
AMOUNT OF BACKWAGES
AWARDED COMPUTED FROM
THE TIME THE COMPLAINT FOR
ILLEGAL DISMISSAL WAS FILED.
aTcIEH
III.
WHETHER OR NOT THE NLRC
GRAVELY ABUSED ITS
DISCRETION IN ORDERING THE
PAYMENT OF SEPARATION PAY
IN LIEU OF REINSTATEMENT.
IV.
WHETHER OR NOT THE NLRC
GRAVELY ABUSED ITS
DISCRETION IN DELETING THE
AWARD FOR ATTORNEY'S FEE.
The Court first disposes the procedural issues
involved in the present case.
It is evident from a perusal of the records that
petitioner indeed failed to provide the Court of
Appeals a written explanation as to why he did not
personally serve a copy of his Petition therein upon
the adverse parties, as required by Section 11, Rule 13
8 of the Revised Rules of Court. The records also
readily reveal that petitioner did not file a timely
Motion for Reconsideration of the 10 November 2006
Resolution of the Court of Appeals.

Petitioner, however, submits that he raised
meritorious arguments in his Petition before the Court
of Appeals, and the dismissal thereof on a mere
technicality defeated the greater interest of substantial
justice. Petitioner attributes the technical flaws
committed before the appellate court to his former
counsel, and urges the Court to excuse him therefrom
since compliance with the procedural rules calls for
the application of legal knowledge and expertise
which he, as a layman, cannot be expected to know.
Petitioner, thus, prays that this Court give his Petition
due course and set aside the Resolutions dated 10
November 2006 and 9 November 2007 of the Court of
Appeals in CA-G.R. SP No. 96343. DCIAST
For their part, respondents CCBP and Taguibao had
long conceded in this battle when they no longer
appealed the 31 May 2006 Decision of the NLRC,
therefore, rendering the same final and executory with
respect to them. Yet, respondents CCBP and Taguibao
still insist before this Court that petitioner was not
illegally dismissed, since he was employed for a
fixed-term only, and his services were terminated
upon the expiration thereof. Respondents CCBP and
Taguibao also argue that petitioner's procedural faux
pas cannot be excused by merely attributing the same
to his former counsel, in view of the doctrinal rule that
negligence of the counsel binds his client.
The Court rules in favor of petitioner.
It is true that for petitioner's failure to comply with
Section 11, Rule 13 of the Revised Rules of Court, his
petition should be expunged from the records. In the
case of Solar Team Entertainment, Inc. v. Ricafort, 9
the Court stressed the mandatory character of Section
11, Rule 13, viz.:
We thus take this opportunity to clarify
that under Section 11, Rule 13 of the
1997 Rules of Civil Procedure, personal
service and filing is the general rule,
and resort to other modes of service and
filing, the exception. Henceforth,
whenever personal service or filing is
practicable, in light of the
circumstances of time, place and
person, personal service or filing is
mandatory. Only when personal service
or filing is not practicable may resort to
other modes be had, which must then
be accompanied by a written
explanation as to why personal service
or filing was not practicable to begin
with. In adjudging the plausibility of an
explanation, a court shall likewise
consider the importance of the subject
matter of the case or the issues involved
therein, and the prima facie merit of the
pleading sought to be expunged for
violation of Section 11. This Court
cannot rule otherwise, lest we allow
circumvention of the innovation
introduced by the 1997 Rules in order
to obviate delay in the administration of
justice. TAHIED
Nevertheless, the Rules of Court itself calls for its
liberal construction, with the view of promoting their
objective of securing a just, speedy and inexpensive
disposition of every action and proceeding. 10 The
Court is fully aware that procedural rules are not to be
belittled or simply disregarded for these prescribed
procedures insure an orderly and speedy
administration of justice. However, it is equally true
that litigation is not merely a game of technicalities.
Law and jurisprudence grant to courts the prerogative
to relax compliance with procedural rules of even the
most mandatory character, mindful of the duty to
reconcile both the need to put an end to litigation
speedily and the parties' right to an opportunity to be
heard. 11
In numerous cases, 12 the Court has allowed liberal
construction of Section 11, Rule 13 of the Revised
Rules of Court when doing so would be in the service
of the demands of substantial justice and in the
exercise of the equity jurisdiction of this Court. In one
such case, Fulgencio v. National Labor Relations
Commission, 13 this Court provided the following
justification for its non-insistence on a written
explanation as required by Section 11, Rule 13 of the
Revised Rules of Court:
The rules of procedure are merely tools
designed to facilitate the attainment of
justice. They were conceived and
promulgated to effectively aid the court
in the dispensation of justice. Courts
are not slaves to or robots of technical
rules, shorn of judicial discretion. In
rendering justice, courts have always
been, as they ought to be,
conscientiously guided by the norm that
on the balance, technicalities take a
backseat against substantive rights, and
not the other way around. Thus, if the
application of the Rules would tend to
frustrate rather than promote justice, it
is always within our power to suspend
the rules, or except a particular case
from its operation. AIcECS
The call for a liberal interpretation of the Rules is
even more strident in the instant case which
petitioner's former counsel was obviously negligent in
handling his case before the Court of Appeals. It was
petitioner's former counsel who failed to attach the
required explanation to the Petition in CA-G.R. SP
No. 96343. Said counsel did not bother to inform
petitioner, his client, of the 10 November 2006
Resolution of the appellate court dismissing the
Petition for lack of the required explanation. Worse,
said counsel totally abandoned petitioner's case by
merely allowing the reglementary period for filing a
Motion for Reconsideration to lapse without taking
any remedial steps; thus, the 10 November 2006
Resolution became final and executory.
The basic general rule is that the negligence of
counsel binds the client. Hence, if counsel commits a
mistake in the course of litigation, thereby resulting in
his losing the case, his client must perforce suffer the
consequences of the mistake. The reason for the rule
is to avoid the possibility that every losing party
would raise the issue of negligence of his or her
counsel to escape an adverse decision of the court, to
the detriment of our justice system, as no party would
ever accept a losing verdict. This general rule,
however, pertains only to simple negligence of the
lawyer. Where the negligence of counsel is one that
is so gross, palpable, pervasive, reckless and
inexcusable, then it does not bind the client since,
in such a case, the client is effectively deprived of
his or her day in court. 14
The circumstances of this case qualify it under the
exception, rather than the general rule. The negligence
of petitioner's former counsel may be considered
gross since it invariably resulted to the foreclosure of
remedies otherwise readily available to the petitioner.
Not only was petitioner deprived of the opportunity to
bring his case before the Court of Appeals with the
outright dismissal of his Petition on a technicality, but
he was also robbed of the chance to seek
reconsideration of the dismissal of his Petition. What
further impel this Court to heed the call for
substantial justice are the pressing merits of this
case which, if left overshadowed by technicalities,
could result in flagrant violations of the provisions
of the Labor Code and of the categorical mandate
of the Constitution affording protection to labor.
CaHAcT
Higher interests of justice and equity demand that
petitioner should not be denied his day in court and
made him to suffer for his counsel's indiscretions. To
cling to the general rule in this case would only to
condone, rather than rectify, a serious injustice to a
party whose only fault was to repose his faith and
trust in his previous counsel and close our eyes to
the glaring grave abuse of discretion committed by the
NLRC.
This Court is aware that in the instant case, since
petitioner's appeal before the Court of Appeals is to be
given due course, the normal procedure is for us to
remand the case to the appellate court for further
proceedings. The Court, however, dispensed with this
time-consuming procedure, since there is enough
basis on which proper evaluation of the merits of the
case may be had. Remand of this case would serve no
purpose save to further delay its disposition contrary
to the spirit of fair play. It is already an accepted rule
of procedure for us to strive to settle the entire
controversy in a single proceeding, leaving no root or
branch to bear the seed of future litigation. 15
Having thus settled the procedural matters in the
instant case, the Court now proceeds to resolve the
substantive issues.
The Court is convinced beyond cavil that the NLRC
committed grave abuse of its discretion, amounting to
lack or excess of jurisdiction, in modifying the 30
April 2005 Decision of the Labor Arbiter, for in so
doing, the NLRC not only disregarded the elementary
statutory and jurisprudential principles, but also
violated the basic principles of social justice and
protection to labor enshrined in the Constitution.
HaTISE
Explicit is Art. 279 of the Labor Code which states:
Art. 279. Security of Tenure. In
cases of regular employment, the
employer shall not terminate the
services of an employee except for a
just cause or when authorized by this
Title. An employee who is unjustly
dismissed from work shall be entitled to
reinstatement without loss of seniority
rights and other privileges and to his
full backwages, inclusive of
allowances, and to his other benefits or
their monetary equivalent computed
from the time his compensation was
withheld from him up to the time of his
actual reinstatement.
Applying the above-quoted statutory provision, this
Court decreed in Pheschem Industrial Corporation v.
Moldez: 16
Article 279 of the Labor Code provides
that an illegally dismissed employee
shall be entitled, inter alia, to the
payment of his full backwages,
inclusive of allowances and to his other
benefits or their monetary equivalent
computed from the time that his
compensation was withheld from
him, i.e., from the time of his illegal
dismissal, up to the time of his actual
reinstatement. Thus, where
reinstatement is adjudged, the award of
backwages and other benefits continues
beyond the date of the Labor Arbiter's
Decision ordering reinstatement and
extends up to the time said order of
reinstatement is actually carried out.
(Emphasis supplied.) SHECcT

The Court was more emphatic in Philippine Industrial
Security Agency Corporation v. Dapiton, 17 when it
ruled that backwages had to be paid by the employer
as part of the price or penalty he had to pay for
illegally dismissing his employee. It was to be
computed from the time of the employee's illegal
dismissal (or from the time his compensation was
withheld from him) up to the time of his
reinstatement.
One of the natural consequences of a finding that an
employee has been illegally dismissed is the payment
of backwages corresponding to the period from his
dismissal up to actual reinstatement. The statutory
intent of this matter is clearly discernible. The
payment of backwages allows the employee to
recover from the employer that which he has lost by
way of wages as a result of his dismissal. 18
Logically, it must be computed from the date of
petitioner's illegal dismissal up to the time of actual
reinstatement. There can be no gap or interruption,
lest we defeat the very reason of the law in granting
the same. That petitioner did not immediately file his
Complaint should not affect or diminish his right to
backwages, for it is a right clearly granted to him by
law should he be found to have been illegally
dismissed and for as long as his cause of action has
not been barred by prescription.
The law fixes the period of time within which
petitioner could seek remedy for his illegal dismissal
and for as long as he filed his Complaint within the
prescriptive period, he shall be entitled to the full
protection of his right to backwages. In illegal
dismissal cases, the employee concerned is given a
period of four years from the time of his illegal
dismissal within which to institute the complaint. This
is based on Article 1146 of the New Civil Code which
states that actions based upon an injury to the rights of
the plaintiff must be brought within four years. 19 The
four-year prescriptive period shall commence to run
only upon the accrual of a cause of action of the
worker. 20 Here, petitioner was dismissed from
service on 15 September 2001. He filed his complaint
for illegal dismissal on 14 June 2004. Clearly, then,
the instant case was filed within the prescriptive
period.
The Labor Arbiter, in his computation of the award
for backwages to petitioner, had followed the long-
settled rule 21 that full backwages should be awarded,
to be reckoned from the time of illegal dismissal up to
actual reinstatement. The NLRC, however, modified
the Labor Arbiter's award for backwages by
computing the same only from the time petitioner
filed his Complaint for illegal dismissal before the
Labor Arbiter, i.e., on 24 October 2004, up to the day
when the Labor Arbiter promulgated his judgment,
i.e., 30 April 2005. The NLRC provided no other
explanation for its modification except that it was just
and equitable to reduce the amount of backwages
given to petitioner since, having been dismissed on 15
September 2001, it took him more than three years to
file his Complaint against respondents CCBP and
Taguibao. AacCIT
We find no justice or rationality in the distinction
created by the NLRC; and when there is neither
justice or rationality, the distinction transgresses the
elementary principle of equal protection and must be
stricken out. Equal protection requires that all persons
or things similarly situated should be treated alike, as
to both rights conferred and responsibilities imposed.
22 There is no sufficient basis why petitioner should
not be placed in the same plane with other illegally
dismissed employees who were awarded backwages
without qualification.
Herein petitioner, having been unjustly dismissed
from work, is entitled to reinstatement without loss of
seniority rights and other privileges and to full
backwages, inclusive of allowances, and to other
benefits or their monetary equivalents computed from
the time compensation was withheld up to the time
of actual reinstatement. 23 Accordingly, backwages
must be awarded to petitioner in the amount to be
computed from the time his employment was
unlawfully terminated by respondents CCBP and
Taguibao on 15 September 2001 up to the time he was
actually reinstated on 1 March 2006.
We also do not agree with the NLRC in deleting the
directive of the Labor Arbiter for the reinstatement of
petitioner to his former position, on the flimsy excuse
that the petitioner's position as Route Salesman was
confidential in nature and that the relationship
between petitioner and respondents CCBP and
Taguibao was already strained.
To protect the employee's security of tenure, the Court
has emphasized that the doctrine of "strained
relations" should be strictly applied so as not to
deprive an illegally dismissed employee of his right to
reinstatement. Every labor dispute almost always
results in "strained relations", and the phrase cannot
be given an overarching interpretation; otherwise, an
unjustly dismissed employee can never be reinstated.
24 The assumption of strained relations was already
debunked by the fact that as early as March 2006
petitioner returned to work for respondent CCBP,
without any antagonism having been reported thus far
by any of the parties. Neither can we sustain the
NLRC's conclusion that petitioner's position is
confidential in nature. Receipt of proceeds from sales
of respondent CCBP's products does not make
petitioner a confidential employee. A confidential
employee is one who (1) assists or acts in a
confidential capacity, in regard to (2) persons who
formulate, determine, and effectuate management
policies specifically in the field of labor relations. 25
Verily, petitioner's job as a salesman does not fall
under this qualification.
Finally, the Court overrules the deletion by the NLRC
of the Labor Arbiter's award for attorney's fees to
petitioner. Petitioner is evidently entitled to attorney's
fees, since he was compelled to litigate 26 to protect
his interest by reason of unjustified and unlawful
termination of his employment by respondents CCBP
and Taguibao.
WHEREFORE, premises considered, the instant
Petition is GRANTED. The Resolutions dated 10
November 2006 and 9 November 2007 of the Court of
Appeals in CA-G.R. SP No. 96343 and the Decision
dated 31 May 2006 of the NLRC in NLRC NCR CA
No. 044658-05 are REVERSED and SET ASIDE.
The Decision of the Labor Arbiter in NLRC-NCR
Case No. 00-06-07161-14 is hereby REINSTATED.
Let the records of this case be remanded to the Labor
Arbiter for implementation of this Decision, and he
shall report his compliance herewith within ten (10)
days from receipt hereof. IDTSEH
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Corona, * and
Peralta, JJ., concur.
Footnotes
1. Penned by Associate Justice Renato C. Dacudao
with Associate Justices Rosmari D.
Carandang and Estela M. Perlas-Bernabe,
concurring. Rollo, pp. 34-35.
2. Penned by Associate Justice Rosmari D.
Carandang with Associate Justices Regalado
E. Maambong and Estela M. Perlas-Bernabe,
concurring. Rollo, pp. 37-38.
3. Pleadings submitted by respondent CCBP were
silent as to how long petitioner's employment
was extended. No copy of the original
contract or its extension was submitted by
respondent CCBP. ESTcIA
4. Rollo, pp. 175-179.
5. Id. at 302.
6. Id. at 38-45.
7. The Complaint before the Labor Arbiter was filed
on 14 June 2004 as shown in the upper right
corner of the form, but the NLRC stated in its
Decision that it was filed on 24 October 2004.
8. SEC. 11. Priorities in modes of service and filing.
Whenever practicable, the service and
filing of pleadings and other papers shall be
done personally. Except with respect to papers
emanating from the court, a resort to other
modes must be accompanied by a written
explanation why the service or filing was not
done personally. A violation of this Rule may
be cause to consider the paper as not filed.
9. 355 Phil. 404, 413-414 (1998).
10. 1997 RULES OF CIVIL PROCEDURE, Rule 1,
Section 6.
11. Barnes v. Padilla, G.R. No. 160753, 28 June
2005, 461 SCRA 533, 539.
12. Fulgencio v. National Labor Relations
Commission, 457 Phil. 868, 881-882 (2003);
Musa v. Amor, 430 Phil. 128, 138 (2002);
Maceda v. De Guzman Vda. De Macatangay,
G.R. No. 164947, 31 January 2006, 481
SCRA 415, 423; Barnes v. Reyes, 458 Phil.
430, 438 (2003). CacTSI
13. Id.
14. Escudero v. Dulay, G.R. No. L-60578, 23
February 1988, 158 SCRA 69, 77.
15. Bunao v. Social Security System, G.R. No.
159606, 13 December 2005, 477 SCRA 564,
571.
16. G.R. No. 161158, 9 May 2005, 458 SCRA 339,
348.
17. 377 Phil. 951, 966 (1999).
18. Santos v. National Labor Relations Commission,
G.R. No. L-76721, 21 September 1987, 154
SCRA 168, 172.
19. Callanta v. Carnation Philippines, Inc., 229
Phil. 279, 288-289 (1986).
20. Ramos v. Our Lady of Peace School, 218 Phil.
708, 712 (1984).
21. Labor Code, Art. 279; C-E Construction Corp. v.
National Labor Relations Commission, 456
Phil. 597, 607-608 (2003); Dela Cruz v.
National Labor Relations Commission, 359
Phil. 317, 329 (1998); Paramount Vinyl
Products Corp. v. National Labor Relations
Commission, G.R. No. 81200, 17 October
1990, 190 SCRA 525, 537.
22. Lao Ichong v. Hernandez, 101 Phil. 1155, 1164
(1957).
23. Labor Code of the Philippines, Article 279.
aEAcHI
24. Quijano v. Mercury Drug Corporation, 354 Phil.
112, 122 (1998).
25. San Miguel Corp. Supervisors and Exempt
Union v. Laguesma, 343 Phil. 143, 149
(1997).
26. Civil Code of the Philippines, Art. 2208 (2).
* Associate Justice Renato C. Corona was
designated to sit as additional member
replacing Associate Justice Antonio Eduardo
B. Nachura per Raffle dated 10 September
2008.




THIRD DIVISION
[G.R. No. 161003. May 6, 2005.]
FELIPE O. MAGBANUA, CARLOS
DE LA CRUZ, REMY ARNAIZ,
BILLY ARNAIZ, ROLLY ARNAIZ,
DOMINGO SALARDA, JULIO
CAHILIG and NICANOR LABUEN,
petitioners, vs. RIZALINO UY,
respondent.
D E C I S I O N
PANGANIBAN, J p:
Rights may be waived through a compromise
agreement, notwithstanding a final judgment that has
already settled the rights of the contracting parties. To
be binding, the compromise must be shown to have
been voluntarily, freely and intelligently executed by
the parties, who had full knowledge of the judgment.
Furthermore, it must not be contrary to law, morals,
good customs and public policy.
The Case
Before us is a Petition for Review 1 under Rule 45 of
the Rules of Court, assailing the May 31, 2000
Decision 2 and the October 30, 2003 Resolution 3 of
the Court of Appeals (CA) in CA-GR SP No. 53581.
The challenged Decision disposed as follows:
"WHEREFORE, having found that
public respondent NLRC committed
grave abuse of discretion, the Court
hereby SETS ASIDE the two assailed
Resolutions and REINSTATES the
order of the Labor Arbiter dated
February 27, 1998." 4
The assailed Resolution denied reconsideration.
The Facts
The CA relates the facts in this wise:
"As a final consequence of the final and
executory decision of the Supreme
Court in Rizalino P. Uy v. National
Labor Relations Commission, et al.
(GR No. 117983, September 6, 1996)
which affirmed with modification the
decision of the NLRC in NLRC Case
No. V-0427-93, hearings were
conducted [in the National Labor
Relations Commission Sub-Regional
Arbitration Branch in Iloilo City] to
determine the amount of wage
differentials due the eight (8)
complainants therein, now [petitioners].
As computed, the award amounted to
P1,487,312.69 . . .
"On February 3, 1997, [petitioners]
filed a Motion for Issuance of Writ of
Execution.
"On May 19, 1997, [respondent]
Rizalino Uy filed a Manifestation
requesting that the cases be terminated
and closed, stating that the judgment
award as computed had been complied
with to the satisfaction of [petitioners].
Said Manifestation was also signed by
the eight (8) [petitioners]. Together
with the Manifestation is a Joint
Affidavit dated May 5, 1997 of
[petitioners], attesting to the receipt of
payment from [respondent] and
waiving all other benefits due them in
connection with their complaint.
xxx xxx xxx
"On June 3, 1997, [petitioners] filed an
Urgent Motion for Issuance of Writ of
Execution wherein they confirmed that
each of them received P40,000 from
[respondent] on May 2, 1997.
"On June 9, 1997, [respondent]
opposed the motion on the ground that
the judgment award had been fully
satisfied. In their Reply, [petitioners]
claimed that they received only partial
payments of the judgment award.
xxx xxx xxx
"On October 20, 1997, six (6) of the
eight (8) [petitioners] filed a
Manifestation requesting that the cases
be considered closed and terminated as
they are already satisfied of what they
have received (a total of P320,000)
from [respondent]. Together with said
Manifestation is a Joint Affidavit in the
local dialect, dated October 20, 1997,
of the six (6) [petitioners] attesting that
they have no more collectible amount
from [respondent] and if there is any,
they are abandoning and waiving the
same. EASCDH
"On February 27, 1998, the Labor
Arbiter issued an order denying the
motion for issuance of writ of execution
and [considered] the cases closed and
terminated . . .
"On appeal, the [National Labor
Relations Commission (hereinafter
'NLRC')] reversed the Labor Arbiter
and directed the immediate issuance of
a writ of execution, holding that a final
and executory judgment can no longer
be altered and that quitclaims and
releases are normally frowned upon as
contrary to public policy." 5
Ruling of the Court of Appeals
The CA held that compromise agreements may be
entered into even after a final judgment. 6 Thus,
petitioners validly released respondent from any
claims, upon the voluntary execution of a waiver
pursuant to the compromise agreement. 7
The appellate court denied petitioners' motion for
reconsideration for having been filed out of time. 8
Hence, this Petition. 9
The Issues
Petitioners raise the following issues for our
consideration:
"1. Whether or not the final and
executory judgment of the Supreme
Court could be subject to compromise
settlement;
"2. Whether or not the petitioners'
affidavit waiving their awards in [the]
labor case executed without the
assistance of their counsel and labor
arbiter is valid;
"3. Whether or not the ignorance of the
jurisprudence by the Court of Appeals
and its erroneous counting of the period
to file [a] motion for reconsideration
constitute a denial of the petitioners'
right to due process." 10
The Court's Ruling
The Petition has no merit.
First Issue:
Validity of the Compromise Agreement
A compromise agreement is a contract whereby the
parties make reciprocal concessions in order to
resolve their differences and thus avoid or put an end
to a lawsuit. 11 They adjust their difficulties in the
manner they have agreed upon, disregarding the
possible gain in litigation and keeping in mind that
such gain is balanced by the danger of losing. 12
Verily, the compromise may be either extrajudicial (to
prevent litigation) or judicial (to end a litigation). 13
A compromise must not be contrary to law, morals,
good customs and public policy; and must have been
freely and intelligently executed by and between the
parties. 14 To have the force of law between the
parties, 15 it must comply with the requisites and
principles of contracts. 16 Upon the parties, it has the
effect and the authority of res judicata, once entered
into. 17
When a compromise agreement is given judicial
approval, it becomes more than a contract binding
upon the parties. Having been sanctioned by the court,
it is entered as a determination of a controversy and
has the force and effect of a judgment. 18 It is
immediately executory and not appealable, except for
vices of consent or forgery. 19 The nonfulfillment of
its terms and conditions justifies the issuance of a writ
of execution; in such an instance, execution becomes
a ministerial duty of the court. 20
Following these basic principles, apparently
unnecessary is a compromise agreement after final
judgment has been entered. Indeed, once the case is
terminated by final judgment, the rights of the parties
are settled. There are no more disputes that can be
compromised.
Compromise Agreements
after Final Judgment
The Court is tasked, however, to determine the
legality of a compromise agreement after final
judgment, not the prudence of entering into one.
Petitioners vehemently argue that a compromise of a
final judgment is invalid under Article 2040 of the
Civil Code, which we quote: 21
"Art. 2040. If after a litigation has been
decided by a final judgment, a
compromise should be agreed upon,
either or both parties being unaware of
the existence of the final judgment, the
compromise may be rescinded.
"Ignorance of a judgment which may be
revoked or set aside is not a valid
ground for attacking a compromise."
(Bold types supplied)
The first paragraph of Article 2040 refers to a scenario
in which either or both of the parties are unaware of a
court's final judgment at the time they agree on a
compromise. In this case, the law allows either of
them to rescind the compromise agreement. It is
evident from the quoted paragraph that such an
agreement is not prohibited or void or voidable.
Instead, a remedy to impugn the contract, which is an
action for rescission, is declared available. 22 The law
allows a party to rescind a compromise agreement,
because it could have been entered into in ignorance
of the fact that there was already a final judgment.
Knowledge of a decision's finality may affect the
resolve to enter into a compromise agreement.
The second paragraph, though irrelevant to the present
case, refers to the instance when the court's decision is
still appealable or otherwise subject to modification.
Under this paragraph, ignorance of the decision is not
a ground to rescind a compromise agreement, because
the parties are still unsure of the final outcome of the
case at this time.
Petitioners' argument, therefore, fails to convince.
Article 2040 of the Civil Code does not refer to the
validity of a compromise agreement entered into after
final judgment. Moreover, an important requisite,
which is lack of knowledge of the final judgment, is
wanting in the present case.
Supported by Case Law
The issue involving the validity of a compromise
agreement notwithstanding a final judgment is not
novel. Jesalva v. Bautista 23 upheld a compromise
agreement that covered cases pending trial, on appeal,
and with final judgment. 24 The Court noted that
Article 2040 impliedly allowed such agreements;
there was no limitation as to when these should be
entered into. 25 Palanca v. Court of Industrial
Relations 26 sustained a compromise agreement,
notwithstanding a final judgment in which only the
amount of back wages was left to be determined. The
Court found no evidence of fraud or of any showing
that the agreement was contrary to law, morals, good
customs, public order, or public policy. 27
Gatchalian v. Arlegui 28 upheld the right to
compromise prior to the execution of a final
judgment. The Court ruled that the final judgment had
been novated and superseded by a compromise
agreement. 29 Also, Northern Lines, Inc. v. Court of
Tax Appeals 30 recognized the right to compromise
final and executory judgments, as long as such right
was exercised by the proper party litigants. 31
Rovero v. Amparo, 32 which petitioners cited, did not
set any precedent that all compromise agreements
after final judgment were invalid. In that case, the
customs commissioner imposed a fine on an importer,
based on the appraised value of the goods illegally
brought to the country. The latter's appeal, which
eventually reached this Court, was denied. Despite a
final judgment, the customs commissioner still
reappraised the value of the goods and effectively
reduced the amount of fine. Holding that he had no
authority to compromise a final judgment, the Court
explained:

"It is argued that the parties to a case
may enter into a compromise about
even a final judgment rendered by a
court, and it is contended . . . that the
reappraisal ordered by the
Commissioner of Customs and
sanctioned by the Department of
Finance was authorized by Section
1369 of the [Revised Administrative
Code]. The contention may be correct
as regards private parties who are
the owners of the property subject-
matter of the litigation, and who are
therefore free to do with what they
own or what is awarded to them, as
they please, even to the extent of
renouncing the award, or condoning
the obligation imposed by the
judgment on the adverse party. Not
so, however, in the present case. Here,
the Commissioner of Customs is not a
private party and is not the owner of the
money involved in the fine based on the
original appraisal. He is a mere agent of
the Government and acts as a trustee of
the money or property in his hands or
coming thereto by virtue of a favorable
judgment. Unless expressly authorized
by his principal or by law, he is not
authorized to accept anything different
from or anything less than what is
adjudicated in favor of the
Government." 33 (Bold types supplied)
SHDAEC
Compliance with the
Rule on Contracts
There is no justification to disallow a compromise
agreement, solely because it was entered into after
final judgment. The validity of the agreement is
determined by compliance with the requisites and
principles of contracts, not by when it was entered
into. As provided by the law on contracts, a valid
compromise must have the following elements: (1) the
consent of the parties to the compromise, (2) an object
certain that is the subject matter of the compromise,
and (3) the cause of the obligation that is established.
34
In the present factual milieu, compliance with the
elements of a valid contract is not in issue. Petitioners
do not challenge the factual finding that they entered
into a compromise agreement with respondent. There
are no allegations of vitiated consent. Neither was
there any proof that the agreement was defective or
could be characterized as rescissible, 35 voidable, 36
unenforceable, 37 or void. 38 Instead, petitioners base
their argument on the sole fact that the agreement was
executed despite a final judgment, which the Court
had previously ruled to be allowed by law.
Petitioners voluntarily entered into the compromise
agreement, as shown by the following facts: (1) they
signed respondent's Manifestation (filed with the labor
arbiter) that the judgment award had been satisfied; 39
(2) they executed a Joint Affidavit dated May 5, 1997,
attesting to the receipt of payment and the waiver of
all other benefits due them; 40 and (3) 6 of the 8
petitioners filed a Manifestation with the labor arbiter
on October 20, 1997, requesting that the cases be
terminated because of their receipt of payment in full
satisfaction of their claims. 41 These circumstances
also reveal that respondent has already complied with
its obligation pursuant to the compromise agreement.
Having already benefited from the agreement,
estoppel bars petitioners from challenging it.
Advantages of Compromise
A reciprocal concession inherent in a compromise
agreement assures benefits for the contracting parties.
For the defeated litigant, obvious is the advantage of a
compromise after final judgment. Liability arising
from the judgment may be reduced. As to the
prevailing party, a compromise agreement assures
receipt of payment. Litigants are sometimes deprived
of their winnings because of unscrupulous
mechanisms meant to delay or evade the execution of
a final judgment.
The advantages of a compromise agreement appear to
be recognized by the NLRC in its Rules of Procedure.
As part of the proceedings in executing a final
judgment, litigants are required to attend a pre-
execution conference to thresh out matters relevant to
the execution. 42 In the conference, any agreement
that would settle the final judgment in a particular
manner is necessarily a compromise.
Novation of an Obligation
The principle of novation supports the validity of a
compromise after final judgment. Novation, a mode of
extinguishing an obligation, 43 is done by changing
the object or principal condition of an obligation,
substituting the person of the debtor, or surrogating a
third person in the exercise of the rights of the
creditor. 44
For an obligation to be extinguished by another, the
law requires either of these two conditions: (1) the
substitution is unequivocally declared, or (2) the old
and the new obligations are incompatible on every
point. 45 A compromise of a final judgment operates
as a novation of the judgment obligation, upon
compliance with either requisite. 46 In the present
case, the incompatibility of the final judgment with
the compromise agreement is evident, because the
latter was precisely entered into to supersede the
former.
Second Issue:
Validity of the Waiver
Having ruled on the validity of the compromise
agreement in the present suit, the Court now turns its
attention to the waiver of claims or quitclaim executed
by petitioners. The subject waiver was their
concession when they entered into the agreement.
They allege, however, that the absence of their
counsel and the labor arbiter when they executed the
waiver invalidates the document.
Not Determinative
of the Waiver's Validity
The presence or the absence of counsel when a waiver
is executed does not determine its validity. There is no
law requiring the presence of a counsel to validate a
waiver. The test is whether it was executed
voluntarily, freely and intelligently; and whether the
consideration for it was credible and reasonable. 47
Where there is clear proof that a waiver was wangled
from an unsuspecting or a gullible person, the law
must step in to annul such transaction. 48 In the
present case, petitioners failed to present any evidence
to show that their consent had been vitiated.
The law is silent with regard to the procedure for
approving a waiver after a case has been terminated.
49 Relevant, however, is this reference to the NLRC's
New Rules of Procedure:
"Should the parties arrive at any
agreement as to the whole or any part
of the dispute, the same shall be
reduced to writing and signed by the
parties and their respective counsel, or
authorized representative, if any, 50
before the Labor Arbiter.
"The settlement shall be approved by
the Labor Arbiter after being satisfied
that it was voluntarily entered into by
the parties and after having explained to
them the terms and consequences
thereof. EAHcCT
"A compromise agreement entered into
by the parties not in the presence of the
Labor Arbiter before whom the case is
pending shall be approved by him, if
after confronting the parties,
particularly the complainants, he is
satisfied that they understand the terms
and conditions of the settlement and
that it was entered into freely and
voluntarily by them and the agreement
is not contrary to law, morals, and
public policy." 51
This provision refers to proceedings in a
mandatory/conciliation conference during the initial
stage of the litigation. Such provision should be made
applicable to the proceedings in the pre-execution
conference, for which the procedure for approving a
waiver after final judgment is not stated. There is no
reason to make a distinction between the proceedings
in mandatory/conciliation and those in pre-execution
conferences.
The labor arbiter's absence when the waivers were
executed was remedied upon compliance with the
above procedure. The Court observes that the arbiter
made searching questions during the pre-execution
conference to ascertain whether petitioners had
voluntarily and freely executed the waivers. 52
Likewise, there was evidence that they made an
intelligent choice, considering that the contents of the
written waivers had been explained to them. 53 The
labor arbiter's absence when those waivers were
executed does not, therefore, invalidate them.
The Court declines to rule on the allegation that
respondent's counsels encroached upon the
professional employment of petitioners' lawyer when
they facilitated the waivers. 54 The present action is
not the proper forum in which to raise any charge of
professional misconduct. More important, petitioners
failed to present any supporting evidence.
The third issue, which refers to the timely filing of
petitioners' Motion for Reconsideration filed with the
CA, will no longer be discussed because this Court's
decision has resolved the case on the merits.
WHEREFORE, the Petition is DENIED and the
assailed Decision AFFIRMED. Costs against
petitioners.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio Morales and
Garcia, JJ., concur.
Footnotes
1. Rollo, pp. 3-14.
2. Id., pp. 16-28. Special Fifteenth Division. Penned
by Justice Ruben T. Reyes (Division chair),
with the concurrence of Justices Andres B.
Reyes Jr. and Jose L. Sabio Jr. (members).
3. Id., p. 71.
4. Id., p. 27.
5. Assailed Decision, pp. 2-6; rollo, pp. 17-21.
6. Id., pp. 8 & 23.
7. Id., pp. 9 & 24.
8. Assailed Resolution; rollo, p. 71.
9. The case was deemed submitted for decision on
October 5, 2004, upon this Court's receipt of
petitioners' Memorandum, signed by Atty.
Mariano R. Pefianco. Respondent's
Memorandum, signed by Attys. Nicolas P.
Lapea Jr. and Gilbert F. Ordoa, was
received by this Court on September 8, 2004.
10. Petitioners' Memorandum, p. 4; rollo, p. 121.
11. Art. 2028, Civil Code; Manila International
Airport Authority v. ALA Industries
Corporation, 422 SCRA 603, 609, February
13, 2004; Ramnani v. Court of Appeals, 413
Phil. 194, 207, July 10, 2001; Abarintos v.
Court of Appeals, 374 Phil. 157, 168,
September 30, 1999; Del Rosario v. Madayag,
317 Phil. 883, 887, August 28, 1995.
12. Armed Forces of the Philippines Mutual Benefit
Association, Inc. v. Court of Appeals, 311
SCRA 143, 154, July 26, 1999.

13. Armed Forces of the Philippines Mutual Benefit
Association, Inc. v. Court of Appeals, supra;
Abinujar v. Court of Appeals, 313 Phil. 407,
413, April 18, 1995.
14. The Learning Child, Inc. v. Lazaro, 340 SCRA
72, 75, September 7, 2000; Calla v.
Maglalang, 382 Phil. 138, 143, February 9,
2000; Salazar v. Jarabe, 91 Phil. 596, 601,
July 11, 1952.
15. Golden Donuts, Inc. v. National Labor Relations
Commission, 379 Phil. 303, 314, January 19,
2000.
16. See Regal Films, Inc. v. Concepcion, 414 Phil.
807, 813, August 9, 2001; Anacleto v. Van
Twest, 393 Phil. 616, 624, August 29, 2000;
Del Rosario v. Madayag, supra.
17. Art. 2037, Civil Code; Cebu International
Finance Corporation v. Court of Appeals, 374
Phil. 844, 858, October 12, 1999; Del Rosario
v. Madayag, supra.
18. Velasquez v. Court of Appeals, 426 SCRA 309,
316, March 25, 2004; Manila International
Airport Authority v. ALA Industries
Corporation, supra.; Golden Donuts, Inc. v.
National Labor Relations Commission, supra;
Abarintos v. Court of Appeals, supra.
19. Art. 2038; San Antonio v. Court of Appeals, 371
SCRA 536, 543, December 7, 2001;
Thermphil, Inc. v. Court of Appeals, 421 Phil.
589, 596, November 20, 2001; Salvador v.
Ortoll, 343 SCRA 658, 668, October 18,
2000; Santos v. Dames, 345 Phil. 242, 247,
October 2, 1997.
20. Manila International Airport Authority v. ALA
Industries Corporation, supra; Abinujar v.
Court of Appeals, supra.
21. Petitioners' Memorandum, p. 5; rollo, p. 122.
22. City of Zamboanga v. Mandi, 196 SCRA 498,
502, April 30, 1991.
23. 105 Phil. 348, March 24, 1959.
24. Id., p. 351.
25. Id., p. 351.
26. 150-C Phil. 354, November 24, 1972.
27. Id., p. 359.
28. 75 SCRA 234, February 17, 1977.
29. Id., p. 241.
30. 163 SCRA 25, June 29, 1988.
31. Id., p. 30.
32. 91 Phil. 228, May 5, 1952.
33. Id., p. 234, per Montemayor, J.
34. Art. 1318, Civil Code.
35. Art. 1381, Civil Code.
36. Art. 1390, Civil Code.
37. Art. 1403, Civil Code.
38. Art. 1409, Civil Code.
39. Assailed Decision, p. 3; rollo, p. 18.
40. Ibid.
41. Id., pp. 5 & 20. In their Joint Affidavit written in
their local dialect, the six petitioners attested
to the truth of all the allegations in their Joint
Affidavit dated May 5, 1997 (id., pp. 9 & 24).
42. 1, Rule VIII (Execution Proceedings), New
Rules of Procedure of the NLRC, enacted
February 12, 2002.
43. Arts. 1157 & 1231, Civil Code.
44. Art. 1291.
45. Art. 1292.
46. See Dormitorio v. Fernandez, 72 SCRA 388,
393, August 21, 1976; Lu v. Yap, 74 Phil. 287,
July 30, 1943. In these cases, the Court
specifically found an animus novandi or intent
to substitute an obligation that arose from a
final judgment.
47. Art. 2038, Civil Code; Agustilo v. Court of
Appeals, 417 Phil. 218, 234, September 7,
2001; AG&P United Rank & File Association
v. National Labor Relations Commission, 332
Phil. 937, 947, November 29, 1996; Sicangco
v. National Labor Relations Commission, 235
SCRA 96, 101, August 4, 1994; Periquet v.
National Labor Relations Commission, 186
SCRA 724, 730, June 22, 1990.
48. Alcosero v. National Labor Relations
Commission, 351 Phil. 368, 383, March 26,
1998; AG&P United Rank & File Association
v. National Labor Relations Commission,
supra; Sicangco v. National Labor Relations
Commission, supra; Periquet v. National
Labor Relations Commission, supra, p. 731.
"Dire necessity" may be an acceptable ground to
annul quitclaims if the consideration is
unconscionably low and the employee was
tricked into accepting it. Veloso v.
Department of Labor and Employment, 200
SCRA 201, 205, August 5, 1991.
49. See Loyola Security & Detective Agency v.
National Labor Relations Commission, 313
Phil. 750, 754, May 9, 1995.
50. It is apparent from the provision that the
signatures of counsels and authorized
representatives would not be required if they
are not present at the time the agreements are
made.
51. 2, Rule V (Proceedings Before Labor Arbiters),
New Rules of Procedure of the NLRC.
52. Assailed Decision, pp. 10-11; rollo, pp. 25-26.
53. Id., pp. 12 & 27.
54. Petitioners' Memorandum, p. 6; rollo, p. 123.














THIRD DIVISION
[G.R. No. 160913. August 31, 2006.]
EUROTECH HAIR SYSTEMS,
INC., LUTZ KUNACK, and JOSE
BARIN, petitioners, vs. ANTONIO S.
GO, respondent.
R E S O L U T I O N
QUISUMBING, J p:
For review on certiorari are the Decision 1 dated July
9, 2003 and the Resolution 2 dated November 19,
2003, of the Court of Appeals in CA-G.R. SP No.
69909 setting aside the National Labor Relations
Commission (NLRC) Decision 3 but reinstating with
modification the Decision 4 of the Labor Arbiter.
The facts are as follows:
Petitioner Eurotech Hair Systems, Inc. is a domestic
corporation engaged in the manufacture and export of
wigs and toupees. Petitioners Lutz Kunack and Jose
E. Barin are the company's president and general
manager, respectively.
Respondent Antonio S. Go served as Eurotech's
operations manager from September 2, 1996 until he
was dismissed on September 27, 1999. As operations
manager, he drafted and implemented the plans for the
production of wigs and toupees. Respondent's
responsibilities included manpower planning to meet
the monthly production targets.
In 1999, the company suffered production shortfalls.
Thus, on September 2, 1999, petitioner Barin issued
respondent a memorandum, strongly advising him to
improve his performance. He was also admonished
because of the late shipment of 80 units of hairpieces
to one of petitioners' clients, Bergmann Company.
On September 7, 1999, Eurotech issued another
memorandum reiterating the previous reminder for
respondent to improve his performance. Again, on
September 21, 1999, Eurotech issued two memoranda,
reminding respondent of his continued failure to
improve his performance. He was given 24 hours to
explain in writing why the company should not
terminate his services on the ground of loss of trust
and confidence.
On September 22, 1999, Eurotech relieved respondent
as operations manager pending evaluation of his
performance. On September 24, 1999, Eurotech
issued yet another memorandum reminding
respondent of his failure to submit his written
explanation and granting him another 24 hours to
submit such explanation. The second 24-hour period
lapsed without respondent's explanation. On
September 27, 1999, petitioner Kunack finally issued
respondent a termination letter citing loss of trust and
confidence. ITSaHC
Consequently, respondent filed against petitioners a
complaint docketed as NLRC Case No. RAB-IV-10-
11565-99-L for illegal dismissal, separation pay,
backwages, and damages. 5 The Labor Arbiter ruled
for respondent.
On appeal, the NLRC reversed the Labor Arbiter and
dismissed the complaint for lack of merit. 6
Respondent's motion for reconsideration was denied.
Hence, respondent elevated the matter to the Court of
Appeals. The appellate court set aside the decision of
the NLRC and essentially reinstated the ruling of the
Labor Arbiter.
Respondent received said Decision of the Court of
Appeals on July 21, 2003. Prior to such receipt, he
had executed a quitclaim 7 in consideration of
P450,000. Hence, on July 16, 2003, the Labor Arbiter
issued an Order 8 dismissing with prejudice the
complaint for illegal dismissal in view of the said
waiver.
Petitioners thus moved for reconsideration of the
Court of Appeals' decision in light of the said
settlement. Respondent, on the other hand, manifested
that he was not represented by his counsel when he
signed the quitclaim. He further alleged that he was in
fact advised by petitioners not to inform his counsel
about the quitclaim.
The Court of Appeals denied the motion for
reconsideration for lack of merit and voided for lack
of jurisdiction the Labor Arbiter's Order dismissing
the case with prejudice.
Hence, the instant petition raising the following
issues:
A
WHETHER OR NOT THE NLRC
EXHIBITED GRAVE ABUSE OF
DISCRETION IN RENDERING ITS
DECISION DATED 30 JULY 2001
AND ITS ORDER DATED 20
DECEMBER 2001.
1. Whether or not respondent's Petition
for Certiorari prayed for the
Court of Appeals' correction of
the NLRC's evaluation of the
evidence without establishing
where the grave of abuse lies.
2. Whether or not the findings of facts
by the NLRC are conclusive upon
the Court of Appeals, which can
no longer be disturbed.
B
WHETHER OR NOT THE
JUDGMENT OF THE COURT OF
APPEALS HAD LEGAL BASIS AND
WAS BASED ON GROSS
MISAPPRECIATION OF FACTS.
1. Whether or not the NLRC correctly
ruled that there was sufficient
and legitimate basis to terminate
the services of respondent for his
gross incompetence resulting in
the Company's loss of confidence
on said employee.
2. Whether or not the Court of Appeals
had substantial basis to support
its judgment.
3. Whether or not the Court of Appeals'
ruling has violated the
Company's constitutional right to
reasonable returns on its
investments.
4. Whether or not respondent was
afforded the required procedural
due process.
C
WHETHER OR NOT THE COURT
OF APPEALS HAD LEGAL BASIS
IN HOLDING THAT THE LABOR
ARBITER DID NOT HAVE
JURISDICTION TO DISMISS THE
CASE IN VIEW OF THE
COMPROMISE AGREEMENT
REACHED BETWEEN THE
PARTIES. 9
Simply put, the issues now for our resolution are: (1)
Was respondent's dismissal in accordance with law?
and (2) Is the compromise agreement entered into by
the parties valid? IEAacT
Petitioners contend the NLRC correctly ruled there
was legitimate basis to terminate respondent for gross
incompetence resulting in the company's loss of
confidence in him. But petitioners also claim that the
Court of Appeals' ruling effectively violated their
constitutional right to reasonable returns on
investment. They allege that the evidence on record
shows respondent was afforded the required
procedural due process.
Petitioners likewise contend that the pendency of
respondent's petition for certiorari before the Court of
Appeals did not divest the Labor Arbiter of
jurisdiction to dismiss the case in view of the
quitclaim. They add that respondent knowingly and
voluntarily executed the waiver in the presence of the
Labor Arbiter. Petitioners further allege that the
compromise agreement has the force and effect of res
judicata.
Respondent, for his part, counters that there was no
legal or factual basis to terminate him on the ground
of loss of trust and confidence. He argues that
allowing an employer to dismiss an employee on a
simple claim of loss of trust and confidence places the
employee's right to security of tenure at the mercy of
the employer.
Respondent further contends that the petition raises
only questions of fact and should therefore be denied
outright. Finally, he assails the Court of Appeals'
deletion of the award of attorney's fees. He argues that
since moral and exemplary damages have been
awarded to respondent, an award of attorney's fees is
proper under Article 2208 10 of the Civil Code.
Considering all the circumstances in this case, we find
the present petition meritorious.
Loss of trust and confidence to be a valid ground for
an employee's dismissal must be based on a willful
breach and founded on clearly established facts. A
breach is willful if it is done intentionally, knowingly
and purposely, without justifiable excuse, as
distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. 11
While failure to observe prescribed standards of work,
or to fulfill reasonable work assignments due to
inefficiency may be a just cause for dismissal, 12 the
employer must show what standards of work or
reasonable work assignments were prescribed which
the employee failed to observe. In addition, the
employer must prove that the employee's failure to
observe any such standards or assignments was due to
his own inefficiency. 13
In this case, petitioners showed that respondent failed
to meet production targets despite reminders to
measure up to the goals set by the company. However,
they were unable to prove that such failure was due to
respondent's inefficiency. Significant factors that
might explain the company's poor production include
existing market conditions at the time, the overall
spending behavior of consumers, and the prevailing
state of the country's economy as a whole. The
company's production shortfalls cannot be attributed
to respondent alone, absent any showing that he
willfully breached the trust and confidence reposed in
him by the petitioners. CIAacS
Note that the burden of proof in dismissal cases rests
on the employer. 14 In the instant case, however,
petitioners failed to prove that respondent was
terminated for a valid cause. Evidence adduced was
utterly wanting as to respondent's alleged inefficiency
constituting a willful breach of the trust and
confidence reposed in him by petitioners.
However, on the second issue, we find for petitioners.
Article 227 of the Labor Code provides:
ART. 227. Compromise agreements.
Any compromise settlement, including
those involving labor standard laws,
voluntarily agreed upon by the parties
with the assistance of the Bureau or the
regional office of the Department of
Labor, shall be final and binding upon
the parties. . . .
Note, however, that even if contracted without the
assistance of labor officials, compromise agreements
between workers and their employers remain valid
and are still considered desirable means of settling
disputes. 15
A compromise agreement is valid as long as the
consideration is reasonable and the employee signed
the waiver voluntarily, with a full understanding of
what he was entering into. All that is required for the
compromise to be deemed voluntarily entered into is
personal and specific individual consent. Thus,
contrary to respondent's contention, the employee's
counsel need not be present at the time of the signing
of the compromise agreement.
In this case, we find the consideration of P450,000
fair and reasonable under the circumstances. In
addition, records show that respondent gave his
personal and specific individual consent with a full
understanding of the stakes involved. In our view, the
compromise agreement in this case does not suffer
from the badges of invalidity.

The fact that the Order, which dismissed the case in
view of the compromise agreement, was issued during
the pendency of the petition for certiorari in the Court
of Appeals does not divest the Labor Arbiter of
jurisdiction. A petition for certiorari is an original
action and does not interrupt the course of the
principal case unless a temporary restraining order or
a writ of preliminary injunction has been issued
against the public respondent from further proceeding.
16 The Labor Arbiter thus acted well within his
jurisdiction. Therefore, the Labor Arbiter's Order
dismissing the case with prejudice in view of the
compromise agreement entered into by the parties
must be upheld.
WHEREFORE, the petition is GRANTED. The
assailed Decision dated July 9, 2003 and Resolution
dated November 19, 2003, of the Court of Appeals in
CA-G.R. SP No. 69909 are SET ASIDE. The July 16,
2003 Order of the Labor Arbiter in NLRC Case No.
RAB-IV-10-11565-99-L dismissing the case with
prejudice is AFFIRMED. aTAEHc
No costs.
SO ORDERED.
Carpio Morales, Tinga and Velasco, Jr., JJ., concur.
Carpio, J., took no part, former counsel of a party.
Footnotes
1. Rollo, pp. 60-72. Penned by Associate Justice
Oswaldo D. Agcaoili, with Associate Justices
Perlita J. Tria Tirona, and Edgardo F.
Sundiam concurring.
2. Id. at 74-77.
3. Id. at 79-95.
4. Id. at 117-122.
5. Id. at 115.
6. Id. at 94.
7. Id. at 569.
8. Id. at 96.
9. Id. at 520-521.
10. Art. 2208. In the absence of stipulation,
attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has
compelled the plaintiff to litigate with third
persons or to incur expenses to protect his
interest;
xxx xxx xxx
(5) Where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim;
xxx xxx xxx
(7) In actions for the recovery of wages of
household helpers, laborers and skilled
workers;
xxx xxx xxx
11. Asia Pacific Chartering (Phils.), Inc. v. Farolan,
G.R. No. 151370, December 4, 2002, 393
SCRA 454, 466.
12. Buiser v. Leogardo, Jr., No. L-63316, July 31,
1984, 131 SCRA 151, 158.
13. Asia Pacific Chartering (Phils.), Inc. v. Farolan,
supra note 11 at 467-468.
14. Athenna International Manpower Services, Inc.
v. Villanos, G.R. No. 151303, April 15, 2005,
456 SCRA 313, 320.
15. Galicia v. NLRC (Second Division), G.R. No.
119649, July 28, 1997, 276 SCRA 381, 387.
16. Tomas Claudio Memorial College, Inc. v. Court
of Appeals, G.R. No. 152568, February 16,
2004, 423 SCRA 122, 132.







FIRST DIVISION
[G.R. No. 126322. January 16, 2002.]
YUPANGCO COTTON MILLS,
INC., petitioner, vs. COURT OF
APPEALS, HON. URBANO C.
VICTORIO, SR., Presiding Judge,
RTC Branch 50, Manila, RODRIGO
SY MENDOZA, SAMAHANG
MANGGAGAWA NG ARTEX
(SAMAR-ANGLO) represented by
its Local President RUSTICO
CORTEZ, and WESTERN
GUARANTY CORPORATION,
respondents.
Ermitao Sangco Manzano & Associates for
petitioner.
Ninfa P. Camitan for private respondent Western
Guaranty Corp.
Potenciano Flores, Jr. for private respondent
SAMAR-ANGLO & R. Mendoza.
SYNOPSIS
The petitioner alleged that a sheriff of the National
Labor Relations Commission (NLRC) erroneously
levied upon certain properties which it claims
ownership. As a consequence, it filed an adverse
claim with the NLRC, which was dismissed by the
labor arbiter. The dismissal was appealed by the
petitioner to the NLRC, but the same was also
dismissed for lack of merit. In the meantime,
petitioner filed an original mandatory injunction with
the NLRC. While the injunction case was pending
before the NLRC, petitioner filed a complaint for
accion reivindicatoria with the Regional Trial Court
of Manila. The trial court dismissed the complaint,
hence, petitioner brought the case to the Court of
Appeals. The Court of Appeals dismissed the petition
on the ground of forum shopping and lack of
jurisdiction. Upon denial of the motion for
reconsideration, the petitioner filed this appeal before
the Supreme Court.
The Supreme Court reversed the decision of the Court
of Appeals. The Court ruled that there was no forum
shopping in the case at bar as there was no identity of
parties, rights and causes of action and reliefs sought.
The case before the NLRC was a labor case on which
petitioner was not a party, while the reivindicatoria
case filed by the petitioner in the trial court was to
recover the property illegally levied upon and sold at
public auction. The Court also ruled that a third party
may avail himself of alternative remedies
cumulatively, and one will not preclude the third party
from availing himself of the alternative remedies in
the event he failed in the remedy first availed of. The
Supreme Court annulled the sale on execution of the
subject property and the subsequent sale of the same.
SYLLABUS
1. REMEDIAL LAW; ACTIONS; FORUM
SHOPPING; CONSTRUED. In Golangco v. Court
of Appeals, we held: "What is truly important to
consider in determining whether forum shopping
exists or not is the vexation caused the courts and
parties-litigant by a party who asks different courts
and/or administrative agencies to rule on the same or
related causes and/or grant the same or substantially
the same reliefs, in the process creating possibility of
conflicting decisions being rendered by the different
for a upon the same issues. ". . . "There is no forum-
shopping where two different orders were questioned,
two distinct causes of action and issues were raised,
and two objectives were sought." The rule is that "for
forum-shopping to exist both actions must involve the
same transactions, the same circumstances. The
actions must also raise identical causes of action,
subject matter and issues. In Chemphil Export &
Import Corporation v. Court of Appeals, we ruled
that: "Forum-shopping or the act of a party against
whom an adverse judgment has been rendered in one
forum, of seeking another (and possible) opinion in
another forum (other than by appeal or the special
civil action of certiorari), or the institution of two (2)
or more actions or proceedings grounded on the same
cause on the supposition that one or the other would
make a favorable disposition." DTAcIa
2. ID.; ID.; THIRD PARTY CLAIMANT; MAY
AVAIL OF SEVERAL ALTERNATIVE REMEDIES
FOR THE PROTECTION OF HIS INTEREST. 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. Even if a third
party claim was denied, a third party may still file a
proper action with a competent court to recover
ownership of the property illegally seized by the
sheriff. This finds support in Section 17 (now 16),
Rule 39, Revised Rules of Court. In light of the
above, 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.
3. ID.; ID.; ID.; FILING OF SEPARATE CIVIL
ACTION FOR RECOVERY OF OWNERSHIP OF
THE PROPERTY LEVIED SHOULD NOT BE
CONSIDERED INTERFERENCE UPON THE
MAIN ACTION. Jurisprudence is likewise replete
with rulings that since the third-party claimant is not
one of the parties to the action, he could not, strictly
speaking, appeal from the order denying his claim, but
should file a separate reivindicatory action against the
execution creditor or the purchaser of the property
after the sale at public auction, or a complaint for
damages against the bond filed by the judgment
creditor in favor of the sheriff. And in Lorenzana v.
Cayetano, we ruled that: "The rights of a third-party
claimant should not be decided in the action where the
third-party claim has been presented, but in a separate
action to be instituted by the third person. The appeal
that should be interposed if the term 'appeal' may
properly be employed, is a separate reivindicatory
action against the execution creditor or the purchaser
of the property after the sale at public auction, or
complaint for damages to be charged against the bond
filed by the judgment creditor in favor of the sheriff.
Such reivindicatory action is reserved to the third-
party claimant." 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.
aDSHIC
D E C I S I O N
PARDO, J p:
The Case
The case is a petition for review on certiorari of the
decision of the Court of Appeals 1 dismissing the
petition ruling that petitioner was guilty of forum
shopping and that the proper remedy was appeal in
due course, not certiorari or mandamus.
In its decision, the Court of Appeals sustained the trial
court's ruling that the remedies granted under Section
17, Rule 39 of the Rules of Court are not available to
the petitioner because the Manual of Instructions for
Sheriffs of the NLRC does not include the remedy of
an independent action by the owner to establish his
right to his property.
The Facts
The facts, as found by the Court of Appeals, are as
follows:
"From the records before us and by
petitioner's own allegations and
admission, it has taken the following
actions in connection with its claim that
a sheriff of the National Labor
Relations Commission "erroneously
and lawfully levied" upon certain
properties which it claims as its own.
"1. It filed a notice of third-party claim
with the Labor Arbiter on May 4, 1995.
"2. It filed an Affidavit of Adverse
Claim with the National Labor
Relations Commission (NLRC) on July
4, 1995, which was dismissed on
August 30, 1995, by the Labor Arbiter.
"3. It filed a petition for certiorari and
prohibition with the Regional Trial
Court of Manila, Branch 49, docketed
as Civil Case No. 95-75628 on October
6, 1995. The Regional Trial Court
dismissed the case on October 11, 1995
for lack of merit.
"4. It appealed to the NLRC the order
of the Labor Arbiter dated August 13,
1995 which dismissed the appeal for
lack of merit on December 8, 1995.
"5. If filed an original petition for
mandatory injunction with the NLRC
on November 16, 1995. This was
docketed as Case No. NLRC-NCR-IC.
0000602-95. This case is still pending
with that Commission.
"6. It filed a complaint in the Regional
Trial Court in Manila which was
docketed as Civil Case No. 95-76395.
The dismissal of this case by public
respondent triggered the filing of the
instant petition.
"In all of the foregoing actions,
petitioner raised a common issue,
which is that it is the owner of the
properties located in the compound and
buildings of Artex Development
Corporation, which were erroneously
levied upon by the sheriff of the NLRC
as a consequence of the decision
rendered by the said Commission in a
labor case docketed as NLRC-NCR
Case No. 00-05-02960-90." 2
On March 29, 1996, the Court of Appeals
promulgated a decision 3 dismissing the petition on
the ground of forum shopping and that petitioner's
remedy was to seek relief from this Court.
On April 18, 1996, petitioner filed with the Court of
Appeals a motion for reconsideration of the decision.
4 Petitioner argued that the filing of a complaint for
accion reivindicatoria with the Regional Trial Court
was proper because it is a remedy specifically granted
to an owner (whose properties were subjected to a
writ of execution to enforce a decision rendered in a
labor dispute in which it was not a party) by Section
17 (now 16), Rule 39, Revised Rules of Court and by
the doctrines laid down in Sy v. Discaya, 5 Santos v.
Bayhon 6 and Manliguez v. Court of Appeals. 7
In addition, petitioner argued that the reliefs sought
and the issues involved in the complaint for recovery
of property and damages filed with the Regional Trial
Court of Manila, presided over by respondent judge,
were entirely distinct and separate from the reliefs
sought and the issues involved in the proceedings
before the Labor Arbiter and NLRC. Besides,
petitioner pointed out that neither the NLRC nor the
Labor Arbiter is empowered to adjudicate matters
involving ownership of properties. AECacS

On August 27, 1996, the Court of Appeals denied
petitioner's motion for reconsideration. 8
Hence, this appeal. 9
The Issues
The issues raised are (1) whether the Court of Appeals
erred in ruling that petitioner was guilty of forum
shopping, and (2) whether the Court of Appeals erred
in dismissing the petitioner's accion reivindicatoria on
the ground of lack of jurisdiction of the trial court.
The Court's Ruling
On the first issue raised, we rule that there was no
forum shopping.
In Golangco v. Court of Appeals, 10 we held:
"What is truly important to consider in
determining whether forum shopping
exists or not is the vexation caused the
courts and parties-litigant by a party
who asks different courts and/or
administrative agencies to rule on the
same or related causes and/or grant the
same or substantially the same reliefs,
in the process creating possibility of
conflicting decisions being rendered by
the different for a upon the same issues.
"xxx xxx xxx
"There is no forum-shopping where two
different orders were questioned, two
distinct causes of action and issues
were raised, and two objectives were
sought." (Italics ours)
In the case at bar, there was no identity of parties,
rights and causes of action and reliefs sought.
The case before the NLRC where Labor Arbiter
Reyes issued a writ of execution on the property of
petitioner was a labor dispute between Artex and
Samar-Anglo. Petitioner was not a party to the case.
The only issue petitioner raised before the NLRC was
whether or not the writ of execution issued by the
labor arbiter could be satisfied against the property of
petitioner, not a party to the labor case.
On the other hand, the accion reivindicatoria filed by
petitioner in the trial court was to recover the property
illegally levied upon and sold at auction. Hence, the
causes of action in these cases were different.
The rule is that "for forum-shopping to exist both
actions must involve the same transactions, the same
circumstances. The actions must also raise identical
causes of action, subject matter and issues." 11
In Chemphil Export & Import Corporation v. Court of
Appeals, 12 we ruled that:
"Forum-shopping or the act of a party
against whom an adverse judgment has
been rendered in one forum, of seeking
another (and possible) opinion in
another forum (other than by appeal or
the special civil action of certiorari), or
the institution of two (2) or more
actions or proceedings grounded on the
same cause on the supposition that one
or the other would make a favorable
disposition."
On the second issue, 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. 13
Even if a third party claim was denied, a third party
may still file a proper action with a competent court to
recover ownership of the property illegally seized by
the sheriff. This finds support in Section 17 (now 16),
Rule 39, Revised Rules of Court, to wit:
"SEC. 17 (now 16). Proceedings where
property claimed by third person. If
property claimed by any other person
than the judgment debtor or his agent,
and such person makes an affidavit of
his title thereto or right to the
possession thereof, stating the grounds
of such right or title, and serve the same
upon the officer making the levy, and a
copy thereof upon the judgment
creditor, the officer shall not be bound
to keep the property, unless such
judgment creditor or his agent, on
demand of the officer, indemnify the
officer against such claim by a bond in
a sum not greater than the value of the
property levied on. In case of
disagreement as to such value, the same
shall be determined by the court issuing
the writ of execution.
"The officer is not liable for damages,
for the taking or keeping of the
property, to any third-party claimant
unless a claim is made by the latter and
unless an action for damages is brought
by him against the officer within one
hundred twenty (120) days from the
date of the filing of the bond. But
nothing herein contained shall prevent
such claimant or any third person from
vindicating his claim to the property by
any proper action.
"When the party in whose favor the
writ of execution runs, is the Republic
of the Philippines, or any officer duly
representing it, the filing of such bond
shall not be required, and in case the
sheriff or levying officer is sued for
damages as a result of the levy, he shall
be represented by the Solicitor General
and if held liable therefor, the actual
damages adjudged by the court shall be
paid by the National Treasurer out of
such funds as may be appropriated for
the purpose." (Italics ours)
In Sy v. Discaya, 14 we ruled that:
"The right of a third-party claimant to
file an independent action to vindicate
his claim of ownership over the
properties seized is reserved by Section
17 (now 16), Rule 39 of the Rules of
Court, . . .:
"xxx xxx xxx
"As held in the case of Ong v. Tating,
et. al., construing the aforecited rule, a
third person whose property was seized
by a sheriff to answer for the obligation
of a judgment debtor may invoke the
supervisory power of the court which
authorized such execution. Upon due
application by the third person and after
summary hearing, the court may
command that the property be released
from the mistaken levy and restored to
the rightful owner or possessor. What
said court do in these instances,
however, is limited to a determination
of whether the sheriff has acted rightly
or wrongly in the performance of his
duties in the execution of judgment,
more specifically, if he has indeed
taken hold of property not belonging to
the judgment debtor. The court does not
and cannot pass upon the question of
title to the property, with any character
of finality. It can treat of the matter
only insofar as may be necessary to
decide if the sheriff has acted correctly
or not. It can require the sheriff to
restore the property to the claimant's
possession if warranted by the
evidence. However, if the claimant's
proof do not persuade the court of the
validity of his title or right of
possession thereto, the claim will be
denied.
"Independent of the above-stated
recourse, a third-party claimant may
also avail of the remedy known as
'terceria,' provided in Section 17 (now
16), Rule 39, by serving on the officer
making the levy an affidavit of his title
and a copy thereof upon the judgment
creditor. The officer shall not be bound
to keep the property, unless such
judgment creditor or his agent, on
demand of the officer, indemnifies the
officer against such claim by a bond in
a sum not greater than the value of the
property levied on. An action for
damages may be brought against the
sheriff within one hundred twenty (120)
days from the filing of the bond.
"The aforesaid remedies are
nevertheless without prejudice to 'any
proper action' that a third-party
claimant may deem suitable to
vindicate 'his claim to the property.'
Such a 'proper action' is, obviously,
entirely distinct from that explicitly
prescribed in Section 17 of Rule 39,
which is an action for damages brought
by a third-party claimant against the
officer within one hundred twenty
(120) days from the date of the filing of
the bond for the taking or keeping of
the property subject of the 'terceria.'
"Quite obviously, too, this 'proper
action' would have for its object the
recovery of ownership or possession of
the property seized by the sheriff, as
well as damages resulting from the
allegedly wrongful seizure and
detention thereof despite the third-party
claim; and it may be brought against
the sheriff and such other parties as
may be alleged to have colluded with
him in the supposedly wrongful
execution proceedings, such as the
judgment creditor himself. Such 'proper
action,' as above pointed out, is and
should be an entirely separate and
distinct action from that in which
execution has issued, if instituted by a
stranger to the latter suit.
"The remedies above mentioned are
cumulative and may be resorted to by a
third-party claimant independent of or
separately from and without need of
availing of the others. If a third-party
claimant opted to file a proper action to
vindicate his claim of ownership, he
must institute an action, distinct and
separate from that in which the
judgment is being enforced, with the
court of competent jurisdiction even
before or without need of filing a claim
in the court which issued the writ, the
latter not being a condition sine qua
non for the former. In such proper
action, the validity and sufficiency of
the title of the third-party claimant will
be resolved and a writ of preliminary
injunction against the sheriff may be
issued." (Emphasis and italics supplied)
In light of the above, 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. 15
In Santos v. Bayhon, 16 wherein Labor Arbiter
Ceferina Diosana rendered a decision in NLRC NCR
Case No. 1-313-85 in favor of Kamapi, the NLRC
affirmed the decision. Thereafter, Kamapi obtained a
writ of execution against the properties of Poly-Plastic
products or Anthony Ching. However, respondent
Priscilla Carrera filed a third-party claim alleging that
Anthony Ching had sold the property to her.
Nevertheless, upon posting by the judgment creditor
of an indemnity bond, the NLRC Sheriff proceeded
with the public auction sale. Consequently,
respondent Carrera filed with Regional Trial Court,
Manila an action to recover the levied property and
obtained a temporary restraining order against Labor
Arbiter Diosana and the NLRC Sheriff from issuing a
certificate of sale over the levied property. Eventually,
Labor Arbiter Santos issued an order allowing the
execution to proceed against the property of Poly-
Plastic Products. Also, Labor Arbiter Santos and the
NLRC Sheriff filed a motion to dismiss the civil case
instituted by respondent Carrera on the ground that
the Regional Trial Court did not have jurisdiction over
the labor case. The trial court issued an order
enjoining the enforcement of the writ of execution
over the properties claimed by respondent Carrera
pending the determination of the validity of the sale
made in her favor by the judgment debtor Poly-Plastic
Products and Anthony Ching.

In dismissing the petition for certiorari filed by Labor
Arbiter Santos, we ruled that:
". . .. The power of the NLRC to
execute its judgments extends only to
properties unquestionably belonging to
the judgment debtor (Special Servicing
Corp. v. Centro La Paz, 121 SCRA
748).
"The general rule that no court has the
power to interfere by injunction with
the judgments or decrees of another
court with concurrent or coordinate
jurisdiction possessing equal power to
grant injunctive relief, applies only
when no third-party claimant is
involved (Traders Royal Bank v.
Intermediate Appellate Court, 133
SCRA 141 [1984]). When a third-party,
or a stranger to the action, asserts a
claim over the property levied upon, the
claimant may vindicate his claim by an
independent action in the proper civil
court which may stop the execution of
the judgment on property not belonging
to the judgment debtor." (Italics ours)
In Consolidated Bank and Trust Corp. v. Court of
Appeals, 193 SCRA 158 [1991], we ruled that:
"The well-settled doctrine is that a
'proper levy' is indispensable to a valid
sale on execution. A sale unless
preceded by a valid levy is void.
Therefore, since there was no sufficient
levy on the execution in question, the
private respondent did not take any title
to the properties sold thereunder . . ..
"A person other than the judgment
debtor who claims ownership or right
over the levied properties is not
precluded, however, from taking other
legal remedies." (Italics ours)
Jurisprudence is likewise replete with rulings that
since the third-party claimant is not one of the parties
to the action, he could not, strictly speaking, appeal
from the order denying his claim, but should file a
separate reivindicatory action against the execution
creditor or the purchaser of the property after the sale
of public auction, or a complaint for damages against
the bond filed by the judgment creditor in favor of the
sheriff. 17
And in Lorenzana v. Cayetano, 18 we ruled that:
"The rights of a third-party claimant
should not be decided in the action
where the third-party claim has been
presented, but in a separate action to be
instituted by the third person. The
appeal that should be interposed if the
term 'appeal' may properly be
employed, is a separate reivindicatory
action against the execution creditor or
the purchaser of the property after the
sale at public auction, or compliant for
damages to be charged against the bond
filed by the judgment creditor in favor
of the sheriff. Such reivindicatory
action is reserved to the third-party
claimant."
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.
The Fallo
WHEREFORE, the Court REVERSES the decision of
the Court of Appeals and the resolution denying
reconsideration. 19 In lieu thereof, the Court renders
judgment ANNULLING the sale on execution of the
subject property conducted by NLRC Sheriff Anam
Timbayan in favor of respondent SAMAR-ANGLO
and the subsequent sale of the same to Rodrigo Sy
Mendoza. The Court declares the petitioner to be the
rightful owner of the property involved and remands
the case to the trial court to determine the liability of
respondents SAMAR-ANGLO, Rodrigo Sy Mendoza,
and WESTERN GUARANTY CORPORATION to
pay actual damages that petitioner claimed.
Costs against respondents, except the Court of
Appeals.
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan and Ynares-
Santiago, JJ., concur.
Footnotes
1. In CA-G.R. SP No. 39700, promulgated on
March 29, 1996, Petition, Annex "A", Rollo,
pp. 65-76. Verzola, J., ponente, Abad
Santos, Jr. and Agcaoili, JJ., concurring.
2. Supra, Note 1, at pp. 67-68.
3. Petition, Annex "A", Rollo, pp. 65-71. Verzola, J.,
ponente, Abad Santos, Jr. and Agcaoili, JJ.,
concurring.
4. CA Rollo, pp. 410-438.
5. 181 SCRA 378, 382 [1990].
6. 199 SCRA 252 [1991].
7. 232 SCRA 427, 431-432 [1994].
8. Petition, Annex "B", Rollo, pp. 73-76.
9. Petition, filed on September 27, 1996, Rollo, pp.
4-63. On October 18, 1999, we gave due
course to the petition (Rollo, pp. 724-727).
10. 347 Phil. 771 [1997].
11. International Container Terminal Services, Inc.
v. Court of Appeals, 319 Phil. 510 [1995].
12. 231 SCRA 257 [1994].
13. Section 2, Rule VI of the Manual of Instructions
for Sheriffs of the NLRC.
14. Supra, Note 7.
15. Manliguez v. Court of Appeals, 232 SCRA 427
[1994].
16. Supra, Note 8.
17. Bayer Philippines, Inc. v. Agana, 63 SCRA 355
[1975].
18. 78 SCRA 425 [1977].
19. In CA-G.R. SP No. 39700.