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Ababon (2006)
SUMMARY: ITC filed its MR late because of excusable negligence of counsel. Such procedural defect should
be absolved because under Art. 221, the NLRC and LAs 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. Otherwise, a greater injustice would be done to ITC by ordering it to reinstate the
employees to their former positions that no longer exist.
FACTS:
Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant leased to Industrial
Timber Corporation (ITC) in 1985 for a period of five years. ITC commenced operation of the plywood
plant and hired 387 workers.
On March 16, 1990, ITC notified the Department of Labor and Employment (DOLE) and its workers that
effective March 19, 1990 it will undergo a no plant operation due to lack of raw materials and will
resume only after it can secure logs for milling. Meanwhile, IPGC notified ITC of the expiration of the
lease contract in August 1990 and its intention not to renew the same.
On June 26, 1990, ITC notified the DOLE and its workers of the plants shutdown due to the non-
renewal of anti-pollution permit that expired in April 1990. This fact and the alleged lack of logs for
milling constrained ITC to lay off all its workers until further notice. This was followed by a final notice of
closure or cessation of business operations on August 17, 1990.
IPGC took over the plywood plant. This prompted Virgilio Ababon, et al. to file a complaint against ITC
and IPGC for illegal dismissal, alleging that the cessation of ITCs operation was intended to bust the
union and that both corporations are one and the same entity being controlled by one owner.
The Labor Arbiter refused to pierce the veil of corporate fiction for lack of evidence to prove that it was
used to perpetuate fraud or illegal act, and upheld the validity of the closure. Ababon et al. appealed to
the NLRC, which reversed the LA decision. Hence, ITC and IPGC filed a Motion for Reconsideration
but this was dismissed for being filed three days late. Thus, they filed a Petition for Relief from
Resolution, which was treated as a second Motion for Reconsideration, but this was dismissed for lack
of merit. They again filed a Motion for Reconsideration/Second Petition for Relief with the NLRC,
which was finally granted. (At this point, the LAs decision was reinstated and the closure valid)
Ababon, et al. filed a Petition for Certiorari with the SC, which petition was referred to the CA. The CA
set aside the new NLRC decision and reinstated its old decision, because the old decision had
become immutable for failure of IPGC and ITC to file their motion for reconsideration within the
reglementary period. (At this point, the closure was invalid)
Since the motions for reconsideration of both parties were denied, they filed a petition for certiorari with
the SC.
ISSUE/S: