Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. Nos. 191288 & 191304 March 7, 2012

MANILA ELECTRIC COMPANY, Petitioner,

vs.
JAN CARLO GALA, Respondent.

DECISION

BRION, J.:

We resolve the petition for review on certiorari,1 seeking to annul the decision2 dated August 25, 2009 and
the resolution3 dated February 10, 2010 of the Court of Appeals (CA) rendered in CA-G.R. SP. Nos.
105943 and 106021.

The Antecedents

The facts are summarized below.

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

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

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

While the Meralco crew was at work, one Noberto "Bing" Llanes, a non-Meralco employee, arrived. He
appeared to be known to the Meralco foremen as they were seen conversing with him. Llanes boarded the
trucks, without being stopped, and took out what were later found as electrical supplies. Aside from Gala,
the foremen and the other linemen who were at the worksite when the pilferage happened were later
charged with misconduct and dishonesty for their involvement in the incident.

Unknown to Gala and the rest of the crew, a Meralco surveillance task force was monitoring their activities
and recording everything with a Sony video camera. The task force was composed of Joseph Aguilar, Ariel
Dola and Frederick Riano.

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

Despite Galas explanation, Meralco proceeded with the investigation and eventually terminated his
employment on July 27, 2006.4 Gala responded by filing an illegal dismissal complaint against Meralco.5

The Compulsory Arbitration Rulings

In a decision dated September 7, 2007,6 Labor Arbiter Teresita D. Castillon-Lora dismissed the complaint
for lack of merit. She held that Galas participation in the pilferage of Meralcos property rendered him
unqualified to become a regular employee.

Gala appealed to the National Labor Relations Commission (NLRC). In its decision of May 2, 2008,7 the
NLRC reversed the labor arbiters ruling. It found that Gala had been illegally dismissed, since there was
"no concrete showing of complicity with the alleged misconduct/dishonesty[.]"8 The NLRC, however, ruled
out Galas reinstatement, stating that his tenure lasted only up to the end of his probationary period. It
awarded him backwages and attorneys fees.

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

The CA Decision

In its decision of August 25, 2009,9 the CA denied Meralcos petition for lack of merit and partially granted
Galas petition. It concurred with the NLRC that Gala had been illegally dismissed, a ruling that was
supported by the evidence. It opined that nothing in the records show Galas knowledge of or complicity in
the pilferage. It found insufficient the joint affidavit10 of the members of Meralcos task force testifying that
Gala and two other linemen knew Llanes.

The CA modified the NLRC decision of May 2, 200811 and ordered Galas reinstatement with full
backwages and other benefits. The CA also denied Meralcos motion for reconsideration. Hence, the
present petition for review on certiorari.12

The Petition

The petition is anchored on the ground that the CA seriously erred and gravely abused its discretion in -

1. ruling that Gala was illegally dismissed; and

2. directing Galas reinstatement despite his probationary status.

Meralco faults the CA for not giving credit to its witnesses Aguilar, Dola and Riano, and instead treated
their joint affidavit (Samasamang Sinumpaang Salaysay) as inconclusive to establish Galas participation in
the pilferage of company property on May 25, 2006. It submits that the affidavit of the three Meralco
employees disproves the CAs findings, considering that their statements were based on their first-hand
account of the incident during their day-long surveillance on May 25, 2006. It points out that the three
Meralco employees categorically stated that all of the companys foremen and linemen present at that time,
including Gala, had knowledge of the pilferage that was happening at the time. According to Aguilar, Dola
and Riano, the trucks crew, including Gala, was familiar with Llanes who acted as if his presence
particularly, that of freely collecting materials and supplies was a regular occurrence during their
operations.

Meralco maintains that Gala himself admitted in his own testimony13 that he had been familiar with Llanes
even before the May 25, 2006 incident where he saw Zuiga, the foreman of Truck No. 1837, conversing
with Llanes. Meralco submits that Galas admission, instead of demonstrating "his feigned innocence,"14
even highlights his guilt, especially considering that by design, his misfeasance assisted Llanes in pilfering
company property; Gala neither intervened to stop Llanes, nor did he report the incident to the Meralco
management.

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

Finally, Meralco argues that even if Gala was illegally dismissed, he was entitled to just his backwages for
the unexpired portion of his employment contract with the company.

Galas Case

By way of his Comment (to the Petition) dated September 2, 2010,15 Gala asks for a denial of the petition
because of (1) serious and fatal infirmities in the petition; (2) unreliable statements of Meralcos witnesses;
and (3) clear lack of basis to support the termination of his employment.

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

With respect to the merits of the case, Gala bewails Meralcos reliance on the joint affidavit16 of Aguilar,
Dola and Riano not only because it was presented for the first time on appeal to the CA, but also because it
was a mere afterthought. He explains that Aguilar and Dola were the very same persons who executed a
much earlier sworn statement or transcription dated July 7, 2006. This earlier statement did not even
mention Gala, but the later joint affidavit "splashes GALAs name in a desperate attempt to link him to an
imagined wrongdoing."17

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

Gala adds that the allegations of a "reported pilferage" or "rampant theft or pilferage" committed prior to
May 25, 2006 by his superiors were not established, for even the labor arbiter did not make a finding on the
foremens involvement in the incident. He stresses that the same is true in his case as there is no proof of
his participation in the pilferage.
Gala further submits that even if he saw Llanes on May 25, 2006 at about the time of the occurrence of the
pilferage near or around the Meralco trucks, he was not aware that a wrongdoing was being committed or
was about to be committed. He points out at that precise time, his superiors were much nearer to the trucks
than he as he was among the crew digging a hole. He presumed at the time that his own superiors, being the
more senior employees, could be trusted to protect company property.

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

The Courts Ruling

The procedural issue

Gala would want the petition to be dismissed outright on procedural grounds, claiming that the
"Verification and Certification," "Secretarys Certificate" and "Affidavit of Service" accompanying the
petition do not contain the details of the Community Tax Certificates of the affiants, and that the lawyers
who signed the petition failed to indicate their updated MCLE certificate numbers, in violation of existing
rules.

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

The substantive aspect of the case

We find merit in the petition.

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

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

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

The evidence on record established Galas presence in the worksite where the pilferage of company
property happened.1wphi1 It also established that it was not only on May 25, 2006 that Llanes, the
pilferer, had been seen during a Meralco operation. He had been previously noticed by Meralco employees,
including Gala (based on his admission),23 in past operations. If Gala had seen Llanes in earlier projects or
operations of the company, it is incredulous for him to say that he did not know why Llanes was there or
what Zuiga and Llanes were talking about. To our mind, the Meralco crew (the foremen and the linemen)
allowed or could have even asked Llanes to be there during their operations for one and only purpose to
serve as their conduit for pilfered company supplies to be sold to ready buyers outside Meralco worksites.

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

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

We consider, too, and we find credible the company submission that the Meralco crew who worked at the
Pacheco Subdivision in Valenzuela City on May 25, 2006 had not been returning unused supplies and
materials, to the prejudice of the company. From all these, the allegedly hearsay evidence that is not
competent in judicial proceedings (as noted above), takes on special meaning and relevance.

With respect to the video footage of the May 25, 2006 incident, Gala himself admitted that he viewed the
tape during the administrative investigation, particularly in connection with the accusation against him that
he allowed Llanes (binatilyong may kapansanan sa bibig) to board the Meralco trucks.26 The choice of
evidence belongs to a party and the mere fact that the video was shown to Gala indicates that the video was
not an evidence that Meralco was trying to suppress. Gala could have, if he had wanted to, served a
subpoena for the production of the video footage as evidence. The fact that he did not does not strengthen
his case nor weaken the case of Meralco.

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

WHEREFORE, premises considered, the petition is GRANTED. The assailed decision and resolution of
the Court of Appeals are SET ASIDE. The complaint is DISMISSED for lack of merit.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

G.R. No. 155844 July 14, 2008

NATIONWIDE SECURITY and ALLIED SERVICES, INC., Petitioner,

vs.
THE COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION and JOSEPH
DIMPAZ, HIPOLITO LOPEZ, EDWARD ODATO, FELICISIMO PABON and JOHNNY AGBAY,
Respondents.

RESOLUTION

QUISUMBING, J.:

This petition for certiorari seeks the reversal and setting aside of the Decision1 dated January 31, 2002 and
the Resolution2 dated September 12, 2002 of the Court of Appeals in CA-G.R. SP No. 65465. The appellate
court had affirmed the January 30, 20013 and April 20, 2001 Resolutions of the National Labor Relations
Commission (NLRC).

The factual antecedents of this case are as follows.

Labor Arbiter Manuel M. Manansala found petitioner Nationwide Security and Allied Services, Inc., a
security agency, not liable for illegal dismissal in NLRC NCR 00-01-00833-96 and 00-02-01129-96
involving eight security guards who were employees of the petitioner. However, the Labor Arbiter directed
the petitioner to pay the aforementioned security guards P81,750.00 in separation pay, P8,700.00 in unpaid
salaries, P93,795.68 for underpayment and 10% attorneys fees based on the total monetary award.4

Dissatisfied with the decision, petitioner appealed to the NLRC which dismissed its appeal for two reasons
first, for having been filed beyond the reglementary period within which to perfect the appeal and
second, for filing an insufficient appeal bond. It disposed as follows:

WHEREFORE, in the light of the foregoing, it is hereby ordered that:

1. the instant appeal be considered DISMISSED; and,

2. the Decision appealed from be deemed FINAL and EXECUTORY.

SO ORDERED.5

Its motion for reconsideration having been denied, petitioner then appealed to the Court of Appeals to have
the appeal resolved on the merits rather than on pure technicalities in the interest of due process.
The Court of Appeals dismissed the case, holding that in a special action for certiorari, the burden is on
petitioner to prove not merely reversible error, but grave abuse of discretion amounting to lack of or excess
of jurisdiction on the part of public respondent NLRC. The dispositive portion of its decision states:

WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED. The questioned Resolutions
dated 30 January 2001 and 20 April 2001 of the National Labor Relations Commission are accordingly
AFFIRMED.

SO ORDERED.6

The Court of Appeals likewise denied the petitioners motion for reconsideration.7 Hence, this petition
which raises the following issues:

I.

WHETHER OR NOT TECHNICALITIES IN LABOR CASES MUST PREVAIL OVER THE

SPIRIT AND INTENTION OF THE LABOR CODE UNDER ARTICLE 221 THEREOF
WHICH STATES:

"In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence
prevailing in courts of Law or equity shall not be controlling and it is the spirit and [i]ntention of
this Code that the Commission and its members and Labor Arbiters shall use every and all
reasonable means to ascertain the facts in each case speedily and objectively and without
[regard] to technicalities of law or procedure, all [i]n the interest of due process." Emphasis
added.

II.

WHETHER OR NOT THE DOCTRINE IN THE CASE OF STAR ANGEL HANDICRAFT vs.
NLRC, et al., 236 SCRA 580 AND ROSEWOOD PROCESSING, INC. VS. NLRC, G.R. [No.]
116476, May 21, 1998 FINDS APPLICATION IN THE INSTANT CASE [;]

III.

WHETHER OR NOT SEPARATION PAY IS JUSTIFIED AS AWARD IN CASES WHERE

THE EMPLOYEE IS TERMINATED DUE TO CONTRACT EXPIRATION AS IN THE
INSTANT CASE; AND

IV.

WHETHER OR NOT THE REQUIREMENT ON CERTIFICATION AGAINST FORUM

SHOPPING WHICH WAS RAISED BEFORE THE NLRC IS ENFORCEABLE IN THE
INSTANT CASE.8

Petitioner contends that the Court of Appeals erred when it dismissed its case based on technicalities while
the private respondents contend that the appeal to the NLRC had not been perfected, since the appeal was
filed outside the reglementary period, and the bond was insufficient.9

After considering all the circumstances in this case and the submission by the parties, we are in agreement
that the petition lacks merit.
At the outset it must be pointed out here that the petition for certiorari filed with the Court by petitioner
under Rule 65 of the Rules of Court is inappropriate. The proper remedy is a petition for review under Rule
45 purely on questions of law. There being a remedy of appeal via petition for review under Rule 45 of the
Rules of Court available to the petitioner, the filing of a petition for certiorari under Rule 65 is
improper.1avvphi1

But even if we bend our Rules to allow the present petition for certiorari, still it will not prosper because we
do not find any grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of the
Court of Appeals when it dismissed the petition of the security agency. We must stress that under Rule 65,
the abuse of discretion must be so patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the
power is exercised in an arbitrary and despotic manner by reason of passion or personal hostility.10 No such
abuse of discretion happened here. The assailed decision by the Court of Appeals was certainly not
capricious nor arbitrary, nor was it a whimsical exercise of judgment amounting to a lack of jurisdiction.11

The Labor Code provides as follows:

ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such
decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

(b) If the decision, order or award was secured through fraud or coercion, including graft and
corruption;

(c) If made purely on questions of law, and

(d) If serious errors in the findings of facts are raised which would cause grave or irreparable
damage or injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the
Commission in the amount equivalent to the monetary award in the judgment appealed from.

xxxx

The New Rules of Procedure of the NLRC states:

Section 1. Periods of appeal. Decisions, resolutions or orders of the Labor Arbiter shall be final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt thereof; and in case of decisions, resolutions or orders of the Regional Director of the Department of
Labor and Employment pursuant to Article 129 of the Labor Code, within five (5) calendar days from
receipt thereof. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday or holiday, the last
day to perfect the appeal shall be the first working day following such Saturday, Sunday or holiday.

No motion or request for extension of the period within which to perfect an appeal shall be allowed.

In the instant case, both the NLRC and the Court of Appeals found that petitioner received the decision of
the Labor Arbiter on July 16, 1999. This factual finding is supported by sufficient evidence,12 and we take it
as binding on us. Petitioner then simultaneously filed its "Appeal Memorandum", "Notice of Appeal" and
"Motion to Reduce Bond", by registered mail on July 29, 1999, under Registry Receipt No. 003098.13
These were received by the NLRC on July 30, 1999.14 The appeal to the NLRC should have been perfected,
as provided by its Rules, within a period of 10 days from receipt by petitioner of the decision on July 16,
1999. Clearly, the filing of the appeal--three days after July 26, 1999--was already beyond the reglementary
period and in violation of the NLRC Rules and the pertinent Article on Appeal in the Labor Code.

Failure to perfect an appeal renders the decision final and executory.15 The right to appeal is a statutory
right and one who seeks to avail of the right must comply with the statute or the rules. The rules,
particularly the requirements for perfecting an appeal within the reglementary period specified in the law,
must be strictly followed as they are considered indispensable interdictions against needless delays and for
the orderly discharge of judicial business.16 It is only in highly meritorious cases that this Court will opt not
to strictly apply the rules and thus prevent a grave injustice from being done.17 The exception does not
obtain here. Thus, we are in agreement that the decision of the Labor Arbiter already became final and
executory because petitioner failed to file the appeal within 10 calendar days from receipt of the decision.

Clearly, the NLRC committed no grave abuse of discretion in dismissing the appeal before it. It follows
that the Court of Appeals, too, did not err, nor gravely abuse its discretion, in sustaining the NLRC Order,
by dismissing the petition for certiorari before it. Hence, with the primordial issue resolved, we find no
need to tarry on the other issues raised by petitioner.

WHEREFORE, the Decision dated January 31, 2002 and the Resolution dated September 12, 2002 of the
Court of Appeals in CA- G.R. SP No. 65465 are AFFIRMED. Costs against petitioner.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 190724 March 12, 2014

DIAMOND TAXI and/or BRYAN ONG, Petitioners,

vs.
FELIPE LLAMAS, JR., Respondent.

DECISION

BRION, J.:

In this petition for review on certiorari,1 we resolve the challenge to the August 13, 2008 decision2 and the
November 27, 2009 resolution3 of the Court of Appeals (CA) in CA-G.R. CEB-S.P. No. 02623. This CA
decision reversed and set aside the May 30, 2006 resolution4 of the National Labor Relations Commission
(NLRC) in NLRC Case No. V-000294-06 (RAB VII-07-1574-05) that dismissed respondent Felipe
Llamas, Jr.'s appeal for non-perfection.

The Factual Antecedents

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

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

Llamas failed to seasonably file his position paper.

On November 29, 2005, the LA rendered a decision5 dismissing Llamas complaint for lack of merit. The
LA held that Llamas was not dismissed, legally or illegally. Rather, the LA declared that Llamas left his job
and had been absent for several days without leave.

Llamas received a copy of this LA decision on January 5, 2006. Meanwhile, he filed his position paper6 on
December 20, 2005.

In his position paper, Llamas claimed that he failed to seasonably file his position paper because his
previous counsel, despite his repeated pleas, had continuously deferred compliance with the LAs orders
for its submission. Hence, he was forced to secure the services of another counsel on December 19, 2005 in
order to comply with the LAs directive.

On the merits of his complaint, Llamas alleged that he had a misunderstanding with Aljuver Ong, Bryans
brother and operations manager of Diamond Taxi, on July 13, 2005 (July 13, 2005 incident). When he
reported for work on July 14, 2005, Bryan refused to give him the key to his assigned taxi cab unless he
would sign a prepared resignation letter. He did not sign the resignation letter. He reported for work again
on July 15 and 16, 2005, but Bryan insisted that he sign the resignation letter prior to the release of the key
to his assigned taxi cab. Thus, he filed the illegal dismissal complaint.

On January 16, 2006, Llamas filed before the LA a motion for reconsideration of its November 29, 2005
decision. The LA treated Llamas motion as an appeal per Section 15, Rule V of the 2005 Revised Rules of
Procedure of the NLRC (2005 NLRC Rules) (the governing NLRC Rules of Procedure at the time Llamas
filed his complaint before the LA).

In its May 30, 2006 resolution,7 the NLRC dismissed for non-perfection Llamas motion for
reconsideration treated as an appeal. The NLRC pointed out that Llamas failed to attach the required
certification of non-forum shopping per Section 4, Rule VI of the 2005 NLRC Rules.

Llamas moved to reconsider the May 30, 2006 NLRC resolution; he attached the required certification of
non-forum shopping.

When the NLRC denied his motion for reconsideration8 in its August 31, 2006 resolution,9 Llamas filed
before the CA a petition for certiorari.10

The CAs ruling

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

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

Further, the CA brushed aside the petitioners claim that Llamas committed several infractions that
warranted his dismissal. The CA declared that the petitioners should have charged Llamas for these
infractions to give the latter an opportunity to explain his side. As matters then stood, they did not charge
him for these infractions; hence, the petitioners could not have successfully used these as supporting
grounds to justify Llamas dismissal on the ground of abandonment.

As the CA found equitable grounds to take exception from the rule on certificate of non-forum shopping, it
declared that the NLRC had acted with grave abuse of discretion when it dismissed Llamas appeal purely
on a technicality. To the CA, the NLRC should have considered as substantially compliant with this rule
Llamas subsequent submission of the required certificate with his motion for reconsideration (of the
NLRCs May 30, 2006 resolution).

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

The petitioners filed the present petition after the CA denied their motion for reconsideration12 in the CAs
November 27, 2009 resolution.13

The Petition

The petitioners argue that the CA erred when it encroached on the NLRCs exclusive jurisdiction to review
the merits of the LAs decision. To the petitioners, the CA should have limited its action in determining
whether grave abuse of discretion attended the NLRCs dismissal of Llamas appeal; finding that it did, the
CA should have remanded the case to the NLRC for further proceedings.

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

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

The Case for the Respondent

Llamas argues in his comment14 that the CA correctly found that the NLRC acted with grave abuse of
discretion when it maintained its dismissal of his appeal despite his subsequent filing of the certificate of
non-forum shopping. Quoting the CAs ruling, Llamas argues that the NLRC should have given due course
to his appeal to avoid miscarriage of substantial justice.

On the issue of dismissal, Llamas argues that the CA correctly reversed the LAs ruling that found him not
dismissed, legally or illegally. Relying on the CAs ruling, Llamas points out that the petitioners bore the
burden of proving the abandonment charge. In this case, the petitioners failed to discharge their burden;
hence, his dismissal was illegal.

The Courts Ruling

We do not find the petition meritorious.

Preliminary considerations: factual-issue-bar-rule

In this Rule 45 petition for review on certiorari, we review the legal errors that the CA may have committed
in the assailed decision, in contrast with the review for jurisdictional error undertaken in an original
certiorari action. In reviewing the legal correctness of the CA decision in a labor case made under Rule 65
of the Rules of Court, we examine the CA decision in the context that it determined the presence or the
absence of grave abuse of discretion in the NLRC decision before it and not on the basis of whether the
NLRC decision, on the merits of the case, was correct. In other words, we have to be keenly aware that the
CA undertook a Rule 65 review, not a review on appeal, of the challenged NLRC decision. In question
form, the question that we ask is: Did the CA correctly determine whether the NLRC committed grave
abuse of discretion in ruling on the case?15

In addition, the Courts jurisdiction in a Rule 45 petition for review on certiorari is limited to resolving only
questions of law. A question of law arises when the doubt or controversy concerns the correct application
of law or jurisprudence to a certain set of facts. In contrast, a question of fact exists when the doubt or
controversy concerns the truth or falsehood of facts.16

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

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

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

The CA has ample authority to make its

own factual determination

We agree that remanding the case to the NLRC for factual determination and decision of the case on the
merits would have been, ordinarily, a prudent approach. Nevertheless, the CAs action on this case was not
procedurally wrong and was not without legal and jurisprudential basis.

In this jurisdiction, courts generally accord great respect and finality to factual findings of administrative
agencies, i.e., labor tribunals, in the exercise of their quasi-judicial function.17 These findings, however,
are not infallible. This doctrine espousing comity to administrative findings of facts cannot preclude the
courts from reviewing and, when proper, disregarding these findings of facts when shown that the
administrative body committed grave abuse of discretion by capriciously, whimsically or arbitrarily
disregarding evidence or circumstances of considerable importance that are crucial or decisive of the
controversy.18

Hence, in labor cases elevated to it via petition for certiorari, the CA can grant this prerogative writ when it
finds that the NLRC acted with grave abuse of discretion in arriving at its factual conclusions. To make this
finding, the CA necessarily has to view the evidence if only to determine if the NLRC ruling had basis in
evidence. It is in the sense and manner that the CA, in a Rule 65 certiorari petition before it, had to
determine whether grave abuse of discretion on factual issues attended the NLRCs dismissal of Llamas
appeal. Accordingly, we do not find erroneous the course that the CA took in resolving Llamas certiorari
petition. The CA may resolve factual issues by express legal mandate and pursuant to its equity
jurisdiction.

The NLRC committed grave abuse of

discretion in dismissing Llamas appeal on
mere technicality

Article 223 (now Article 229)19 of the Labor Code states that decisions (or awards or orders) of the LA
shall become final and executory unless appealed to the NLRC within ten (10) calendar days from receipt
of the decision. Consistent with Article 223, Section 1, Rule VI of the 2005 NLRC Rules also provides for
a ten (10)-day period for appealing the LAs decision. Under Section 4(a), Rule VI20 of the 2005 NLRC
Rules, the appeal shall be in the form of a verified memorandum of appeal and accompanied by proof of
payment of the appeal fee, posting of cash or surety bond (when necessary), certificate of non-forum
shopping, and proof of service upon the other parties. Failure of the appealing party to comply with any or
all of these requisites within the reglementary period will render the LAs decision final and executory.

Indisputably, Llamas did not file a memorandum of appeal from the LAs decision. Instead, he filed, within
the ten (10)-day appeal period, a motion for reconsideration. Under Section 15, Rule V of the 2005 NLRC
Rules, motions for reconsideration from the LAs decision are not allowed;

they may, however, be treated as an appeal provided they comply with the requirements for perfecting an
appeal. The NLRC dismissed Llamas motion for reconsideration treated as an appeal for failure to attach
the required certificate of non-forum shopping per Section 4(a), Rule VI of the 2005 NLRC Rules.

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

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

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

Faced with these circumstances, i.e., Llamas subsequent compliance with the certification-against-forum-
shopping requirement; the utter negligence and inattention of Llamas former counsel to his pleas and
cause, and his vigilance in immediately securing the services of a new counsel; Llamas filing of his
position paper before he learned and received a copy of the LAs decision; the absence of a meaningful
opportunity for Llamas to present his case before the LA; and the clear merits of his case (that our
subsequent discussion will show), the NLRC should have relaxed the application of procedural rules in the
broader interests of substantial justice.

Indeed, while the requirement as to the certificate of non-forum shopping is mandatory, this requirement
should not, however, be interpreted too literally and thus defeat the objective of preventing the undesirable
practice of forum-shopping.23

Under Article 221 (now Article 227)24 of the Labor Code, "the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and
objectively and without regard to technicalities of law or procedure, all in the interest of due process."25
Consistently, we have emphasized that "rules of procedure are mere tools designed to facilitate the
attainment of justice. A strict and rigid application which would result in technicalities that tend to frustrate
rather than promote substantial justice should not be allowed x x x. No procedural rule is sacrosanct if such
shall result in subverting justice."26 Ultimately, what should guide judicial action is that a party is given
the fullest opportunity to establish the merits of his action or defense rather than for him to lose life, honor,
or property on mere technicalities.27

Then, too, we should remember that "the dismissal of an employees appeal on purely technical ground is
inconsistent with the constitutional mandate on protection to labor."28 Under the Constitution29 and the
Labor Code,30 the State is bound to protect labor and assure the rights of workers to security of tenure
tenurial security being a preferred constitutional right that, under these fundamental guidelines, technical
infirmities in labor pleadings cannot defeat.31

In this case, Llamas action against the petitioners concerned his job, his security of tenure.1wphi1 This is
a property right of which he could not and should not be deprived of without due process.32 But, more
importantly, it is a right that assumes a preferred position in our legal hierarchy.33

Under these considerations, we agree that the NLRC committed grave abuse of discretion when, in
dismissing Llamas appeal, it allowed purely technical infirmities to defeat Llamas tenurial security
without full opportunity to establish his cases merits.

Llamas did not abandon his work; he was

constructively dismissed

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

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

Guided by these parameters, we agree that the petitioners unerringly failed to prove the alleged
abandonment. They did not present proof of some overt act of Llamas that clearly and unequivocally shows
his intention to abandon his job. We note that, aside from their bare allegation, the only evidence that the
petitioners submitted to prove abandonment were the photocopy of their attendance logbook and the July
15, 2005 memorandum40 that they served on Llamas regarding the July 13, 2005 incident. These pieces of
evidence, even when considered collectively, indeed failed to prove the clear and unequivocal intention, on
Llamas part, that the law requires to deem as abandonment Llamas absence from work. Quite the
contrary, the petitioners July 15, 2005 memorandum, in fact, supports, if not strengthens, Llamas' version
of the events that led to his filing of the complaint, i.e., that as a result of the July 13, 2005 incident, the
petitioners refused to give him the key to his assigned taxi cab unless he would sign the resignation letter.

Moreover, and as the CA pointed out, Llamas lost no time in filing the illegal dismissal case against them.
To recall, he filed the complaint on July 18, 2005 or only two days from the third time he was refused
access to his assigned taxi cab on July 16, 2005. Clearly, Llamas could not be deemed to have abandoned
his work for, as we have previously held, the immediate filing by the employee of an illegal dismissal
complaint is proof enough of his intention to return to work and negates the employer's charge of
abandonment.41

To reiterate and emphasize, abandonment is a matter of intention that cannot lightly be presumed from
certain equivocal acts of the employee.42

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

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

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

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SPECIAL SECOND DIVISION

G.R. No. 180147 January 14, 2015

SARA LEE PHILIPPINES, INC., Petitioner,

vs.
EMILINDA D. MACATLANG, ET AL.,1 Respondents.

x-----------------------x

G.R. No. 180148

ARIS PHILIPPINES, INC., Petitioner,
vs.
EMILINDA D. MACATLANG, ET AL., Respondents.

x-----------------------x

G.R. No. 180149

SARA LEE CORPORATION, Petitioner,

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

x-----------------------x

G.R. No. 180150

CESAR C. CRUZ, Petitioner,

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

x-----------------------x

G.R. No. 180319

FASHION ACCESSORIES PHILS., INC., Petitioner,

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

x-----------------------x

G.R. No. 180685

EMILINDA D. MACA TLANG, ET AL., Petitioners,

vs.
NLRC, ARIS PHILIPPINES, INC., FASHION ACCESSORIES PHILS., INC., SARA LEE
CORPORATION, SARA LEE PHILIPPINES, INC., COLLIN BEAL and ATTY. CESAR C. CRUZ,
Respondents.

RESOLUTION

PEREZ, J.:

This treats of the 1) Motion for Reconsideration with Urgent Petition for the Courts Approval of the
Pending "Motion for Leave of Court to File and Admit Herein Statement and Confession of Judgment to
Buy Peace and/or Secure against any Possible Contingent Liability by Sara Lee Corporation" filed by Sara
Lee Philippines Inc. (SLPI),Aris Philippines Inc. (Aris), Sara Lee Corporation (SLC) and Cesar C. Cruz, 2)
Motion for Reconsideration filed by Fashion Accessories Phils. Inc. (FAPI), and 3) Manifestation of
Conformity to the Motion for Leave of Court to File and Admit Confession of Judgment to Buy Peace
and/or to Secure against any Possible Contingent Liability by Petitioner SLC.

In the Decision dated 4 June 2014, this Court directed SLPI, Aris, SLC, Cesar Cruz, and FAPI, collectively
known as the Corporations, to post P725 Million, in cash or surety bond, within 10 days from the receipt of
the Decision. The Court further nullified the Resolution of the National Labor Relations Commission
(NLRC) dated 19 December 2006 for being premature.

The Motion for Reconsideration is anchored on the following grounds:

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

B. The Court did not duly rule on the violations of the rights of due process of Petitioner SLPI as
shown by the following:

1. The Labor Arbiter has never acquired jurisdiction over Petitioner SLPI which was
never impleaded as a party respondent and was never validly served with summons
which fact was specifically mentioned in NLRCs Resolution of December 19, 2006; and

2. There is no employer-employee relationships between Petitioner SLPI and the

respondents.

C. The Court did not duly rule on the violations of the rights of due process of Petitioner SLC
because of the following:

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

2. There is no employer-employee relationship between Petitioner SLC and the

respondents.

D. The Court did not duly rule on the violations of the rights of due process of Petitioner Cesar C.
Cruz as shown by the following:

1. The Labor Arbiter has never acquired jurisdiction over Petitioner Cesar C. Cruz who
was never impleaded as a party respondent and was never validly served with summons;
and

2. There is no employer-employee relationship between petitioner Cesar C. Cruz and the

respondents.

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

F. The Court did not duly rule on the applicability of the final and executory Decision of Fullido,
et al., v. Aris Philippines, Inc. and Cesar C. Cruz (G.R. No. 185948) with respect to the present
 consolidated cases considering the identical facts and issues involved plus the fact that the Court
in Fullido sustained the findings and decisions of three (3) other tribunals, i.e., the Court of
Appeals, the NLRC and the Labor Arbiter.

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

H. The Court also did not consider that the Complaints filed by the respondents are barred by res
judicata because of the final and executory decision rendered by the Voluntary Arbitrator on the
identical facts and issues in the case filed by the labor union representing the respondents against
Petitioner API.

I. Contrary to the Decision of June 04, 2014, the Abelardo petition (CA GR SP No. 95919, Pacita
S. Abelardo v. NLRC, Aris, Philippines, Inc.) was filed earlier than the Macatlang petition (CA
GR SP No. 96363) as shown by the lower docket number, thus, the Macatlang petition should be
the one dismissed for forum shopping.

J. In fixing the bond to PhP725 Million which is 25% of the monetary award, the Court failed to
consider the En Banc Decision in McBurnie v. Ganzon, 707 SCRA 646, 693 (2013) which
required only the posting of a bond equivalent to ten percent (10%) of the monetary award.2 We
briefly revisit the factual milieu of this case.

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

On 30 October 2004, the Labor Arbiter found the dismissal of 5,984 Aris employees illegal and awarded
them monetary benefits amounting to P3,453,664,710.86. The judgment award is composed of separation
pay of one month for every year of service, backwages, moral and exemplary damages and attorneys fees.

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

The 5,984 former Aris employees, represented by Emilinda Macatlang (Macatlang petition), filed a petition
for review before the Court of Appeals insisting that the appeal was not perfected due to failure of the
Corporations to post the correct amount of the bond which is equivalent to the judgment award.

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

The Court of Appeals, on 26 March 2007, ordered the Corporations to post an additional appeal bond of P1
Billion.

In our Decision dated 4 June 2014, we modified the Court of Appeals Decision, to wit:

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

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

The Motion for Reconsideration has no merit.

The Corporations score this Court for failing to consider the ruling in McBurnie v. Ganzon4 which
purportedly required only the posting of a bond equivalent to 10% of the monetary award. The
Corporations gravely misappreciated the ruling in McBurnie. The 10% requirement pertains to the
reasonable amount which the NLRC would accept as the minimum of the bond that should accompany the
motion to reduce bond in order to suspend the period to perfect an appeal under the NLRC rules. The 10%
is based on the judgment award and should in no case be construed as the minimum amount of bond to be
posted in order to perfect appeal. There is no room for a different interpretation when McBurnie made it
clear that the percentage of bond set is provisional, thus:

The foregoing shall not be misconstrued to unduly hinder the NLRCs exercise of its discretion, given that
the percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its
authority and duty to resolve the motion and determine the final amount of bond that shall be posted by the
appellant, still in accordance with the standards of "meritorious grounds" and "reasonable amount." Should
the NLRC, after considering the motions merit, determine that a greater amount or the full amount of the
bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be
given a period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the
required appeal bond.

The Corporations argue that there was no legal impediment for the NRLC to issue its 19 December 2006
Resolution vacating the Labor Arbiters Decision as no TRO or injunction was issued by the Court of
Appeals. The Corporations assert that the rule on judicial courtesy remains the exception rather than the
rule.

We do not agree. In the recent case of Trajano v. Uniwide Sales Warehouse Club,5 this Court gave a brief
discourse on judicial courtesy, which concept was first introduced in Eternal Gardens Memorial Park Corp.
v. Court of Appeals,6 to wit:

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

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

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

The other grounds raised by the Corporations in this Motion for Reconsideration such as the denial of due
process due to invalid service of summons on SLPI, SLC and Cesar Cruz; prescription, res judicata, and the
applicability of the Fulido case8 with the instant case were all raised and resolved by the Labor Arbiter in
favor of former Aris employees in its Decision dated 30 October 2004. That same decision was appealed by
the Corporations before the NLRC. The perfection of said appeal through the posting of a partial bond was
put into question and that is precisely the main issue brought before the appellate court and before us.

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

Now we proceed to tackle the Motion filed by the parties to Admit Confession of Judgment.

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

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

The Corporations cite the case of Republic of the Philippines v. Bisaya Land Transportation Co.10 to
outline the distinction between a compromise agreement/judgment on consent and a confession of
judgment/judgment by confession, thus:

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

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

Even if we dismiss the Corporations choice of designation as pure semantics and consider the agreement
they entered into with the complainants as a form of a compromise agreement, we still could not approve
the same.
We elucidate.

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

A compromise must not be contrary to law, morals, good customs and public policy; and must have been
freely and intelligently executed by and between the parties.13

Article 227 of the Labor Code of the Philippines authorizes compromise agreements voluntarily agreed
upon by the parties, in conformity with the basic policy of the State "to promote and emphasize the primacy
of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation,
as modes of settling labor or industrial disputes."14 The provision reads:

ART. 227 Compromise Agreements. Any compromise settlement, including those involving labor
standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional
office of the Department of Labor, shall be final and binding upon the parties. The National Labor
Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case
of noncompliance thereof or if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.

A compromise agreement is valid as long as the consideration is reasonable and the employee signed the
waiver voluntarily, with a full understanding of what he was entering into.15

The compromise agreement which the Corporations deem as Confession of Judgment is reproduced in full
below:

CONFESSION OF JUDGMENT

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

1. HILLSHIRE will pay to the 5,984 respondents (complainants) the total amount of THREE
HUNDRED FORTY TWO MILLION TWO HUNDRED EIGHTY-FOUR THOUSAND AND
EIGHT HUNDRED PESOS (PhP342,284,800.00) or at FIFTY SEVEN THOUSAND TWO
HUNDRED PESOS (PhP57,200.00) for each respondent (complainant) inclusive of the attorneys
fees of EIGHT THOUSAND FIVE HUNDRED EIGHTY PESOS (PhP8,580.00) which each
respondent (complainant) will actually pay to their counsel of record as the total consideration for
the dismissal with prejudice of all the pending cases before this Honorable Court and all the cases
pending before the National Labor Relations Commission against all the petitioners.

2. The above agreed amount of THREE HUNDRED FORTY TWO MILLION TWO HUNDRED
EIGHTY-FOUR THOUSAND AND EIGHT HUNDRED PESOS (PhP342,284,800.00) shall be
distributed as follows:

2.1 FORTY EIGHT THOUSAND SIX [HUNDRED] TWENTY PESOS (PhP48,620.00)

to each respondent (complainant), and

2.2 EIGHT THOUSAND FIVE HUNDRED EIGHTY PESOS (PhP8,580.00) to the

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

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

4. The amount of FORTY EIGHT THOUSAND SIX HUNDRED TWENTY PESOS

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

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

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

7. Thereafter, upon expiration of the two (2) year period referred to above, HILLSHIREs
obligation to make any payment to the respondents (Complainants) shall ipso facto cease, expire
and terminate and the judgment by confession shall be considered satisfied, fulfilled and
terminated.

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

8.1 Complainants shall personally claim the payment to them from the bank upon
presentation of any recognized government IDs such as Drivers License, Senior
Citizens Card, Voters ID, SSS ID, Unified Multipurpose Identification Card, Postal ID,
Passport, or Certification Under Oath by the Barangay Chairman as to the identity of the
respondent (complainant), or

8.2 By the duly authorized representative of respondent (complainant) evidenced by a

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

9. The lead complainant, Ms. Emilinda D. Macatlang, and Atty. Alex Tan shall take adequate
steps to inform all the respondents (complainants) by personal notice or media announcement of
this confession of judgment upon receipt of the Decision of this Honorable Court.

10. All fully paid respondents (complainants) shall execute a Waiver, Release and Quitclaim.

11. Upon the approval of this Confession of Judgment by this Honorable Court, all cases pending
before this Honorable Court and the NLRC shall automatically be considered dismissed,
terminated and of no force and effect.
Petitioners invite the attention of this Honorable Court that the above monetary consideration for both the
respondents (complainants) and their counsel under the above terms and conditions have been agreed upon
with Atty. Alex Tan before the filing of this confession of judgment.

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

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

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

In Arellano v. Powertech Corporation,19 we voided the P150,000.00 compromise for the P2.5 Million
judgment on appeal to the NLRC. We note that the compromise is a mere 6% of the contingent sum that
may be received by petitioners and the minuscule amount is certainly questionable because it does not
represent a true and fair amount which a reasonable agent may bargain for his principal.20

In Mindoro Lumber and Hardware v. Bacay,21 we found that the private respondents individual claims,
ranging from P6,744.20 to P242,626.90, are grossly disproportionate to what each of them actually
received under the Sama-samang Salaysay sa Pag-uurong ng Sakdal. The amount of the settlement is
indubitably unconscionable; hence, ineffective to bar the workers from claiming the full measure of their
legal rights.22

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

In our Decision, we have already directed the NLRC to act with dispatch in resolving the merits of the case
upon receipt of the cash or surety bond in the amount of P725 Million within 10 days from receipt of the
Decision. If indeed the parties want an immediate and expeditious resolution of the case, then the NLRC
should be unhindered with technicalities to dispose of the case. Accepting an outrageously low amount of
consideration as compromise defeats the complainants legitimate claim.

In Unicane Workers Union-CLUP v. NLRC,23 we held the P100,000.00 amount in the quit claim is
unconscionable because the complainants had been awarded by the labor arbiter more than P2 million. It
should have been aware that had petitioners pursued their case, they would have been assured of getting
said amount, since, absent a perfected appeal, complainants were already entitled to said amount by virtue
of a final judgment. We proceeded to state that:
Not all quitclaims are per se invalid as against public policy.1wphi1 But, where there is clear proof that
the waiver was wrangled from an unsuspecting or gullible person, or the terms of settlement are
unconscionable on its face, then the law will step in to annul the questionable transaction.24

In fine, we will not hesitate to strike down a compromise agreement which is unconscionable and against
public policy.

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

SO ORDERED.