LINGKOD MANGGAGAWA SA RUBBERWORLD, ADIDAS-ANGLO, its officers and members as

represented by SONIA ESPERANZA, vs. RUBBERWORLD (PHILS.) INC. (TRINIDAD)

G.R. No. 153882
January 29, 2007 GARCIA, J.:
FACTS: LINGKOD Manggagawa sa Rubberworld, Adidas-Anglo is a legitimate labor union whose members
were employees of RUBBERWORLD Philippines, Inc.
One day, RUBBERWORLD due to severe financial crisis announced it was going to shutdown in a month.
Notice was served upon its recognized labor union, the BISIG Pagkakaisa.
BISIG staged a strike. As a result, RUBBERWORLDS premises closed prematurely even before the date set
for its shutdown.
LINGKOD filed a complaint against RUBBERWORLD for ULP, illegal shutdown, and non-payment of salaries
and separation pay. It claimed that the strike staged by BISIG was company-instigated/supported.
While the aforementioned complaint was pending with Labor Arbiter, RUBBERWORLD filed with the SEC a
Petition for Declaration for Suspension of Payments with Proposed Rehabilitation Plan. SEC granted
the petition. It placed RUBBERWORLD under Management Committee, and declared all actions for claims
against RUBBERWORLD pending before any court, tribunal, office, board, body, Commission or sheriff
SUSPENDED.
Notwithstanding the SEC's suspension order, Labor Arbiter rendered a decision in favor of LINGKOD.
Meanwhile, SEC declared RUBBERWORLD as DISSOLVED and lifted its earlier suspension order, finding that
its continuance would no longer be feasible.
On the other hand, a writ of execution was issued by the NLRC. Faced with this dilemma, RUBBERWORLD
filed with the Court an Urgent Omnibus Motion to declare null and void the execution pursuant to the
suspension order. CA ruled in favor of RUBBERWORLD. Aggrieved, LINGKOD sought relief from the SC.
ISSUE/S: (a) Whether the CA had jurisdiction when it gave due course to the petition filed by RUBBERWORLD
(and annulled and set aside the decisions rendered by the labor arbiter a quo and the NLRC, when the said
decisions had become final and executory warranting the outright dismissal of the aforesaid petition). [YES]
(b) Whether Section 5(d) and Section 6 (c) of P.D. No. 902-A, as amended, is applicable in labor cases. [YES]
HELD: (a) The Labor Arbiter completely disregarded and violated Section 6(c) of P.D. 902-A, as amended,
which expressly mandates the suspension of all actions for claims against a corporation placed under a
management committee by the SEC. Thus, the proceedings before the Labor Arbiter and the order and writ
subsequently issued by the NLRC are all null and void for having been undertaken or issued in violation of the
SEC suspension Order. As such, the decision of the Labor Arbiter, or the decision/dismissal order and
writ of execution issued by the NLRC, could have never attained final and executory status. Acts
executed against the provisions of mandatory or prohibitory laws shall be void, A void judgment is in
effect no judgment at all. No rights are divested by it nor obtained from it. Being worthless in itself, all
proceedings upon which the judgment is founded are equally worthless. It neither binds nor bars anyone. All
acts performed under it and all claims flowing out of it are void. In other words, a void judgment is regarded as
a nullity, and the situation is the same as it would be if there were no judgment. It accordingly leaves the partylitigants in the same position they were in before the trial.
(b) Section 5 (d) and Section 6 (c) of P.D. No. 902-A, as amended, reorganizing the SEC, vested it with
additional powers and placing it under the Office of the President, which respectively read:
Section 5. In addition to the regulatory adjudicative functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of associations registered with it as expressly granted under
existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving:
xxx xxx xxx
d) Petitions of corporations, partnerships or associations to be declared in the state of suspension of payments

in cases where the corporation, partnership or association possesses sufficient property to cover all its debts
but foresees the impossibility of meeting them when they respectively fall due or in cases where the
corporation, partnership or association has no sufficient assets to cover its liabilities, but is under the
management of a rehabilitation receiver or management committee created pursuant to this Decree.
Section 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers:
xxx xxx xxx
c) To appoint one or more receivers of the property, real or personal, which is the subject of the action pending
before the Commission in accordance with the pertinent provisions of the Rules of Court in such other cases
whenever necessary in order to preserve the rights of the parties-litigants and/or protect the interest of the
investing public and creditors: x x x Provided, finally, That upon appointment of a management committee,
the rehabilitation receiver, board or body, pursuant to this Decree, ALL actions for claims against
corporations, partnerships, or associations under management or receivership pending before any
court, tribunal, board or body shall be suspended accordingly.
In several cases, the Court upheld the applicability of PD 902-A to ALL actions for claims against
corporations, xxx including labor cases pursuant to Section 5(d) and Section 6(c) thereof. The
justification for the automatic stay of all pending actions for claims "is to enable the management
committee or the rehabilitation receiver to effectively exercise its/his powers free from any judicial or
extra-judicial interference that might unduly hinder or prevent the rescue of the debtor company. To
allow such other actions to continue would only add to the burden of the management committee or
rehabilitation receiver, whose time, effort and resources would be wasted in defending claims against the
corporation instead of being directed toward its restructuring and rehabilitation."
x x x No exception in favor of labor claims is mentioned in the law. Since the law makes no distinction
or exemptions in favor of labor claims, neither should this Court.
Article 217 of the Labor Code should be construed not in isolation but in harmony with PD 902-A. True, the
NLRC has the power to hear and decide labor disputes, but such authority is deemed suspended when PD
902-A is put into effect by the SEC.
Thus, when NLRC proceeded to decide the case despite the SEC suspension order, the NLRC acted
without or in excess of its jurisdiction to hear and decide cases. As a consequence, any resolution,
decision or order that it rendered or issued without jurisdiction is a nullity. Petition DENIED.