Page 1 of 52 | LABREL – 4E | FT CASES B1
G.R. No. 172013 October 2, 2009
PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P.
S A N T I A G O , M A R I A N N E V. K AT I N D I G , B E R N A D E T T E A .
CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE,
CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R.
CRESENCIO, and other flight attendants of PHILIPPINE
AIRLINES, Petitioners, 
 invalidity of Section 144, Part A of the PAL-FASAP CBA. The RTC set a
vs.
 hearing on petitioners' application for a TRO and, thereafter, required the
PHILIPPINE AIRLINES INCORPORATED, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision1 and the
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No. 86813.
Petitioners were employed as female flight attendants of respondent
Philippine Airlines (PAL) on different dates prior to November 22, 1996.
They are members of the Flight Attendants and Stewards Association of the
Philippines (FASAP), a labor organization certified as the sole and
exclusive certified as the sole and exclusive bargaining representative of
the flight attendants, flight stewards and pursers of respondent.
On July 11, 2001, respondent and FASAP entered into a Collective
Bargaining Agreement3 incorporating the terms and conditions of their
agreement for the years 2000 to 2005, hereinafter referred to as PAL-
FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November 1996:
xxxx
3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement,
compulsory retirement shall be fifty-five (55) for females and sixty (60) for
males. x x x.
2003,4
In a letter dated July 22, petitioners and several female cabin crews
manifested that the aforementioned CBA provision on compulsory
retirement is discriminatory, and demanded for an equal treatment with their
male counterparts. This demand was reiterated in a letter5 by petitioners'
counsel addressed to respondent demanding the removal of gender
discrimination provisions in the coming re-negotiations of the PAL-FASAP
CBA.
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their
2004-2005 CBA proposals6 and manifested their willingness to commence
the collective bargaining negotiations between the management and the
association, at the soonest possible time.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory
Relief with Prayer for the Issuance of Temporary Restraining Order and Writ
of Preliminary Injunction7 with the Regional Trial Court (RTC) of Makati City,
Branch 147, docketed as Civil Case No. 04-886, against respondent for the
parties to submit their respective memoranda.
On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction over
the present case. The RTC reasoned that:
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA
which is allegedly discriminatory as it discriminates against female flight
attendants, in violation of the Constitution, the Labor Code, and the
CEDAW. The allegations in the Petition do not make out a labor dispute
arising from employer-employee relationship as none is shown to exist.
This case is not directed specifically against respondent arising from any
act of the latter, nor does it involve a claim against the respondent. Rather,
this case seeks a declaration of the nullity of the questioned provision of the
CBA, which is within the Court's competence, with the allegations in the
Petition constituting the bases for such relief sought.
The RTC issued a TRO on August 10, 2004,9 enjoining the respondent for
implementing Section 144, Part A of the PAL-FASAP CBA.
The respondent filed an omnibus motion10 seeking reconsideration of the
order overruling its objection to the jurisdiction of the RTC the lifting of the
TRO. It further prayed that the (1) petitioners' application for the issuance of
a writ of preliminary injunction be denied; and (2) the petition be dismissed
or the proceedings in this case be suspended.
On September 27, 2004, the RTC issued an Order11 directing the issuance
of a writ of preliminary injunction enjoining the respondent or any of its
agents and representatives from further implementing Sec. 144, Part A of
the PAL-FASAP CBA pending the resolution of the case.
Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari
and Prohibition with Prayer for a Temporary Restraining Order and Writ of
Preliminary Injunction12 with the Court of Appeals (CA) praying that the
order of the RTC, which denied its objection to its jurisdiction, be annuled
and set aside for having been issued without and/or with grave abuse of
discretion amounting to lack of jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the
respondent's petition, and ruled that:
WHEREFORE, the respondent court is by us declared to have NO
JURISDICTION OVER THE CASE BELOW and, consequently, all the

proceedings, orders and processes it has so far issued therein are
ANNULED and SET ASIDE. Respondent court is ordered to DISMISS its
Civil Case No. 04-886.
SO ORDERED.
Petitioner filed a motion for reconsideration,13 which was denied by the CA
in its Resolution dated March 7, 2006.
Hence, the instant petition assigning the following error:
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT
MATTER IS A LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW
AND JURISPRUDENCE.
The main issue in this case is whether the RTC has jurisdiction over the
petitioners' action challenging the legality or constitutionality of the
provisions on the compulsory retirement age contained in the CBA between
respondent PAL and FASAP.
Petitioners submit that the RTC has jurisdiction in all civil actions in which
the subject of the litigation is incapable of pecuniary estimation and in all
cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising judicial or quasi-judicial functions. The RTC has the power
to adjudicate all controversies except those expressly witheld from the
plenary powers of the court. Accordingly, it has the power to decide issues
of constitutionality or legality of the provisions of Section 144, Part A of the
PAL-FASAP CBA. As the issue involved is constitutional in character, the
labor arbiter or the National Labor Relations Commission (NLRC) has no
jurisdiction over the case and, thus, the petitioners pray that judgment be
rendered on the merits declaring Section 144, Part A of the PAL-FASAP
CBA null and void.
Respondent, on the other hand, alleges that the labor tribunals have
jurisdiction over the present case, as the controversy partakes of a labor
dispute. The dispute concerns the terms and conditions of petitioners'
employment in PAL, specifically their retirement age. The RTC has no
jurisdiction over the subject matter of petitioners' petition for declaratory
relief because the Voluntary Arbitrator or panel of Voluntary Arbitrators have
original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the CBA.
Regular courts have no power to set and fix the terms and conditions of
employment. Finally, respondent alleged that petitioners' prayer before this
Court to resolve their petition for declaratory relief on the merits is
procedurally improper and baseless.
The petition is meritorious.
Jurisdiction of the court is determined on the basis of the material
allegations of the complaint and the character of the relief prayed for
irrespective of whether plaintiff is entitled to such relief.14
Page 2 of 52 | LABREL – 4E | FT CASES B1
In the case at bar, the allegations in the petition for declaratory relief plainly
show that petitioners' cause of action is the annulment of Section 144, Part
A of the PAL-FASAP CBA. The pertinent portion of the petition recites:
CAUSE OF ACTION
24. Petitioners have the constitutional right to fundamental equality
with men under Section 14, Article II, 1987 of the Constitution and,
within the specific context of this case, with the male cabin
attendants of Philippine Airlines.
26. Petitioners have the statutory right to equal work and
employment opportunities with men under Article 3, Presidential
Decree No. 442, The Labor Code and, within the specific context of
this case, with the male cabin attendants of Philippine Airlines.
27. It is unlawful, even criminal, for an employer to discriminate
against women employees with respect to terms and conditions of
employment solely on account of their sex under Article 135 of the
Labor Code as amended by Republic Act No. 6725 or the Act
Strengthening Prohibition on Discrimination Against Women.
28. This discrimination against Petitioners is likewise against the
Convention on the Elimination of All Forms of Discrimination
Against Women (hereafter, "CEDAW"), a multilateral convention
that the Philippines ratified in 1981. The Government and its
agents, including our courts, not only must condemn all forms of
discrimination against women, but must also implement measures
towards its elimination.
29. This case is a matter of public interest not only because of
Philippine Airlines' violation of the Constitution and existing laws,
but also because it highlights the fact that twenty-three years after
the Philippine Senate ratified the CEDAW, discrimination against
women continues.
31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on
compulsory retirement from service is invidiously discriminatory
against and manifestly prejudicial to Petitioners because, they are
compelled to retire at a lower age (fifty-five (55) relative to their
male counterparts (sixty (60).
33. There is no reasonable, much less lawful, basis for Philippine
Airlines to distinguish, differentiate or classify cabin attendants on
the basis of sex and thereby arbitrarily set a lower compulsory
retirement age of 55 for Petitioners for the sole reason that they are
women.
37. For being patently unconstitutional and unlawful, Section 114,
Part A of the PAL-FASAP 2000-2005 CBA must be declared invalid

and stricken down to the extent that it discriminates against
petitioner.
38. Accordingly, consistent with the constitutional and statutory
guarantee of equality between men and women, Petitioners should
be adjudged and declared entitled, like their male counterparts, to
work until they are sixty (60) years old.
PRAYER
WHEREFORE, it is most respectfully prayed that the Honorable Court:
c. after trial on the merits:
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID,
NULL and VOID to the extent that it discriminates against Petitioners; x x x
x
From the petitioners' allegations and relief prayed for in its petition, it is
clear that the issue raised is whether Section 144, Part A of the PAL-FASAP
CBA is unlawful and unconstitutional. Here, the petitioners' primary relief in
Civil Case No. 04-886 is the annulment of Section 144, Part A of the PAL-
FASAP CBA, which allegedly discriminates against them for being female
flight attendants. The subject of litigation is incapable of pecuniary
estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1)
of Batas Pambansa Blg. 129, as amended.15 Being an ordinary civil action,
the same is beyond the jurisdiction of labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code.
Rather, it requires the application of the Constitution, labor statutes, law on
contracts and the Convention on the Elimination of All Forms of
Discrimination Against Women,16 and the power to apply and interpret the
constitution and CEDAW is within the jurisdiction of trial courts, a court of
general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,17 this Court
held that not every dispute between an employer and employee involves
matters that only labor arbiters and the NLRC can resolve in the exercise of
their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters
and the NLRC under Article 217 of the Labor Code is limited to disputes
arising from an employer-employee relationship which can only be resolved
by reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.
Not every controversy or money claim by an employee against the
employer or vice-versa is within the exclusive jurisdiction of the labor
arbiter. Actions between employees and employer where the employer-
employee relationship is merely incidental and the cause of action
precedes from a different source of obligation is within the exclusive
jurisdiction of the regular court.18 Here, the employer-employee relationship
between the parties is merely incidental and the cause of action ultimately
arose from different sources of obligation, i.e., the Constitution and
CEDAW.
Page 3 of 52 | LABREL – 4E | FT CASES B1
Thus, where the principal relief sought is to be resolved not by reference to
the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil
law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.19
If We divest the regular courts of jurisdiction over the case, then which
tribunal or forum shall determine the constitutionality or legality of the
assailed CBA provision?
This Court holds that the grievance machinery and voluntary arbitrators do
not have the power to determine and settle the issues at hand. They have
no jurisdiction and competence to decide constitutional issues relative to
the questioned compulsory retirement age. Their exercise of jurisdiction is
futile, as it is like vesting power to someone who cannot wield it.
In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction of
courts over questions on constitutionality of contracts, as the same involves
the exercise of judicial power. The Court said:
Whether the case involves void or voidable contracts is still a judicial
question. It may, in some instances, involve questions of fact especially
with regard to the determination of the circumstances of the execution of
the contracts. But the resolution of the validity or voidness of the contracts
remains a legal or judicial question as it requires the exercise of judicial
function. It requires the ascertainment of what laws are applicable to the
dispute, the interpretation and application of those laws, and the rendering
of a judgment based thereon. Clearly, the dispute is not a mining conflict. It
is essentially judicial. The complaint was not merely for the determination of
rights under the mining contracts since the very validity of those contracts is
put in issue.
In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular
court's judicial power enshrined in the Constitution that is true that the trend
is towards vesting administrative bodies like the SEC with the power to
adjudicate matters coming under their particular specialization, to insure a
more knowledgeable solution of the problems submitted to them. This
would also relieve the regular courts of a substantial number of cases that
would otherwise swell their already clogged dockets. But as expedient as
this policy may be, it should not deprive the courts of justice of their
power to decide ordinary cases in accordance with the general laws
that do not require any particular expertise or training to interpret and
apply. Otherwise, the creeping take-over by the administrative
agencies of the judicial power vested in the courts would render the

judiciary virtually impotent in the discharge of the duties assigned to
it by the Constitution.
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL
Employees Association (PALEA) entered into an agreement, which includes
the provision to suspend the PAL-PALEA CBA for 10 years, several
employees questioned its validity via a petition for certiorari directly to the
Supreme Court. They said that the suspension was unconstitutional and
contrary to public policy. Petitioners submit that the suspension was
inordinately long, way beyond the maximum statutory life of 5 years for a
CBA provided for in Article 253-A of the Labor Code. By agreeing to a 10-
year suspension, PALEA, in effect, abdicated the workers' constitutional
right to bargain for another CBA at the mandated time.
In that case, this Court denied the petition for certiorari, ruling that there is
available to petitioners a plain, speedy, and adequate remedy in the
ordinary course of law. The Court said that while the petition was
denominated as one for certiorari and prohibition, its object was actually the
nullification of the PAL-PALEA agreement. As such, petitioners' proper
remedy is an ordinary civil action for annulment of contract, an action which
properly falls under the jurisdiction of the regional trial courts.
The change in the terms and conditions of employment, should Section 144
of the CBA be held invalid, is but a necessary and unavoidable
consequence of the principal relief sought, i.e., nullification of the alleged
discriminatory provision in the CBA. Thus, it does not necessarily follow
that a resolution of controversy that would bring about a change in the
terms and conditions of employment is a labor dispute, cognizable by labor
tribunals. It is unfair to preclude petitioners from invoking the trial court's
jurisdiction merely because it may eventually result into a change of the
terms and conditions of employment. Along that line, the trial court is not
asked to set and fix the terms and conditions of employment, but is called
upon to determine whether CBA is consistent with the laws.
Although the CBA provides for a procedure for the adjustment of
grievances, such referral to the grievance machinery and thereafter to
voluntary arbitration would be inappropriate to the petitioners, because the
union and the management have unanimously agreed to the terms of the
CBA and their interest is unified.
In Pantranco North Express, Inc., v. NLRC,23 this Court held that:
x x x Hence, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have
come to an agreement regarding the dismissal of private respondents. No
grievance between them exists which could be brought to a grievance
machinery. The problem or dispute in the present case is between the
union and the company on the one hand and some union and non-union
Page 4 of 52 | LABREL – 4E | FT CASES B1
members who were dismissed, on the other hand. The dispute has to be
settled before an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to be
impartial against the dismissed employees. Due process demands that the
dismissed workers’ grievances be ventilated before an impartial body. x x
x.
Applying the same rationale to the case at bar, it cannot be said that the
"dispute" is between the union and petitioner company because both have
previously agreed upon the provision on "compulsory retirement" as
embodied in the CBA. Also, it was only private respondent on his own who
questioned the compulsory retirement. x x x.
In the same vein, the dispute in the case at bar is not between FASAP and
respondent PAL, who have both previously agreed upon the provision on
the compulsory retirement of female flight attendants as embodied in the
CBA. The dispute is between respondent PAL and several female flight
attendants who questioned the provision on compulsory retirement of
female flight attendants. Thus, applying the principle in the aforementioned
case cited, referral to the grievance machinery and voluntary arbitration
would not serve the interest of the petitioners.
Besides, a referral of the case to the grievance machinery and to the
voluntary arbitrator under the CBA would be futile because respondent
already implemented Section 114, Part A of PAL-FASAP CBA when several
of its female flight attendants reached the compulsory retirement age of 55.
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL,
submitted its association's bargaining proposal for the remaining period of
2004-2005 of the PAL-FASAP CBA, which includes the renegotiation of the
subject Section 144. However, FASAP's attempt to change the questioned
provision was shallow and superficial, to say the least, because it exerted
no further efforts to pursue its proposal. When petitioners in their individual
capacities questioned the legality of the compulsory retirement in the CBA
before the trial court, there was no showing that FASAP, as their
representative, endeavored to adjust, settle or negotiate with PAL for the
removal of the difference in compulsory age retirement between its female
and male flight attendants, particularly those employed before November
22, 1996. Without FASAP's active participation on behalf of its female flight
attendants, the utilization of the grievance machinery or voluntary
arbitration would be pointless.
The trial court in this case is not asked to interpret Section 144, Part A of
the PAL-FASAP CBA. Interpretation, as defined in Black's Law Dictionary,
is the art of or process of discovering and ascertaining the meaning of a
statute, will, contract, or other written document.24 The provision regarding
the compulsory retirement of flight attendants is not ambiguous and does
not require interpretation. Neither is there any question regarding the
implementation of the subject CBA provision, because the manner of
 Page 5 of 52 | LABREL – 4E | FT CASES B1

implementing the same is clear in itself. The only controversy lies in its The question as to whether said Section 114, Part A of the PAL-FASAP
intrinsic validity. CBA is discriminatory or not is a question of fact. This would require the
presentation and reception of evidence by the parties in order for the trial
Although it is a rule that a contract freely entered between the parties
court to ascertain the facts of the case and whether said provision violates
should be respected, since a contract is the law between the parties, said
the Constitution, statutes and treaties. A full-blown trial is necessary, which
rule is not absolute.
jurisdiction to hear the same is properly lodged with the the RTC.
In Pakistan International Airlines Corporation v. Ople,25 this Court held that: Therefore, a remand of this case to the RTC for the proper determination of
The principle of party autonomy in contracts is not, however, an absolute the merits of the petition for declaratory relief is just and proper.1avvphi1
principle. The rule in Article 1306, of our Civil Code is that the contracting WHEREFORE, the petition is PARTLY GRANTED. The Decision and
parties may establish such stipulations as they may deem convenient, Resolution of the Court of Appeals, dated August 31, 2005 and March 7,
"provided they are not contrary to law, morals, good customs, public order 2006, respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET
or public policy." Thus, counter-balancing the principle of autonomy of ASIDE. The Regional Trial Court of Makati City, Branch 147 is DIRECTED
contracting parties is the equally general rule that provisions of applicable to continue the proceedings in Civil Case No. 04-886 with deliberate
law, especially provisions relating to matters affected with public policy, are dispatch.
deemed written into the contract. Put a little differently, the governing
SO ORDERED.
principle is that parties may not contract away applicable provisions of law
especially peremptory provisions dealing with matters heavily impressed
with public interest. The law relating to labor and employment is clearly
such an area and parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply
contracting with each other.
Moreover, the relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good.x x x 26 The supremacy of the law over
contracts is explained by the fact that labor contracts are not ordinary
contracts; these are imbued with public interest and therefore are subject to
the police power of the state.27 It should not be taken to mean that
retirement provisions agreed upon in the CBA are absolutely beyond the
ambit of judicial review and nullification. A CBA, as a labor contract, is not
merely contractual in nature but impressed with public interest. If the
retirement provisions in the CBA run contrary to law, public morals, or
public policy, such provisions may very well be voided.28
Finally, the issue in the petition for certiorari brought before the CA by the
respondent was the alleged exercise of grave abuse of discretion of the
RTC in taking cognizance of the case for declaratory relief. When the CA
annuled and set aside the RTC's order, petitioners sought relief before this
Court through the instant petition for review under Rule 45. A perusal of the
petition before Us, petitioners pray for the declaration of the alleged
discriminatory provision in the CBA against its female flight attendants.
This Court is not persuaded. The rule is settled that pure questions of fact
may not be the proper subject of an appeal by certiorari under Rule 45 of
the Revised Rules of Court. This mode of appeal is generally limited only to
questions of law which must be distinctly set forth in the petition. The
Supreme Court is not a trier of facts.29

G.R. No. 112139 January 31, 2000
L A PA N D AY A G R I C U LT U R A L DEVELOPMENT
CORPORATION, petitioner, 

vs.

THE HONORABLE COURT OF APPEALS (Former Eighth Division) and
COMMANDO SECURITY SERVICE AGENCY, INC., respondents.
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision1 of the Court
of Appeals2 in CA-G.R. CV No. 33893 entitled COMMANDO SECURITY
SERVICE AGENCY, INCORPORATED vs. LAPANDAY AGRICULTURAL
DEVELOPMENT CORPORATION which affirmed the decision3 of the
Regional Trial Court, 11th Judicial Region, Branch 9, Davao City in Civil
Case No. 19203-88.
The pertinent facts as found by the Court of Appeals are as follows:
The evidence shows that in June 1986, plaintiff Commando
Security Service Agency, Inc., and defendant Lapanday Agricultural
Development Corporation entered into a Guard Service Contract.
Plaintiff provided security guards in defendant's banana plantation.
The contract called for the payment to a guard of P754.28 on a
daily 8-hour basis and an additional P565.72 for a four hour
overtime while the shift-in-charge was to be paid P811.40 on a
daily 8-hour basis and P808.60 for the 4-hour overtime.
Wage Orders increasing the minimum wage in 1983 were complied
with by the defendant. On June 16, 1984, Wage Order No. 5 was
promulgated directing an increase of P3.00 per day on the
minimum wage of workers in the private sector and a P5.00
increase on the ECOLA. This was followed on November 1, 1984
by Wage Order No. 6 which further increased said minimum wage
by P3.00 on the ECOLA. Both Wage Orders contain the following
provision:
"In the case of contract for construction projects and for
security, janitorial and similar services, the increase in the
minimum wage and allowances rates of the workers shall
be borne by the principal or client of the construction/
service contractor and the contracts shall be deemed
amended accordingly, subject to the provisions of Sec. 3
(b) of this order" (Sec. 6 and Sec. 9, Wage Orders No. 5
and 6, respectively).
Plaintiff demanded that its Guard Service Contract with defendant
be upgraded in compliance with Wage Order Nos. 5 and 6.
Defendant refused. Their Contract expired on June 6, 1986 without
the rate adjustment called for Wage Order Nos. 5 and 6 being
implemented. By the time of the filing of plaintiff's Complaint, the
Page 6 of 52 | LABREL – 4E | FT CASES B1
rate adjustment payable by defendant amounted to P462,346.25.
Defendant opposed the Complaint by raising the following
defenses: (1) the rate adjustment is the obligation of the plaintiff as
employer of the security guards; (2) assuming its liability, the sum it
should pay is less in amount; and (3) the Wage Orders violate the
impairment clause of the Constitution.
The trial court decided in favor of the plaintiff. It held:
xxx xxx xxx
However, in order for the security agency to pay the security
guards, the Wage Orders made specific provisions to amend
existing contracts for security services by allowing the adjustment
of the consideration paid by the principal to the security agency
concerned. (Eagle Security Agency, Inc. vs. NLRC, Phil.
Tuberculosis Society, Inc. vs. NLRC, et al., May 18, 1989).
1âwphi1.nêt
The Wage Orders require the amendment of the contract as to the
consideration to cover the service contractor's payment of the
increases mandated. However, in the case at bar, the contract for
security services had earlier been terminated without the
corresponding amendment. Plaintiff now demands adjustment in
the contract price as the same was deemed amended by Wage
Order Nos. 5 and 6.
Before the plaintiff could pay the minimum wage as mandated by
law, adjustments must be paid by the principal to the security
agency concerned.
Given these circumstances, if PTS pays the security
guards, it cannot claim reimbursements from Eagle. But if
its Eagle that pays them, the latter can claim
reimbursement from PTS in lieu of an adjustment,
considering that the contract had expired and had not been
renewed. (Eagle Security Agency vs. NLRC and Phil.
Tuberculosis Society, Inc. vs. NLRC, et al., 18 May 1989).
"As to the issue that Wage Orders Nos. 5 and 6 constitute
impairments of contracts in violation of constitutional guarantees,
the High Court ruled" The Supreme Court has rejected the
impairment of contract argument in sustaining the validity and
constitutionality of labor and social legislation like the Blue Sunday
Law, compulsory coverage of private sector employees in the
Social Security System, and the abolition of share tenancy enacted
pursuant to the police power of the state (Eagle Security Agency,
Inc. vs. National Labor Relation Commission and Phil. Tuberculosis
Society, Inc. vs. NLRC, et al., May 18, 1989).

Petitioner's motion for reconsideration was denied;4 hence this petition
where petitioner cites the following grounds to support the instant petition
for review:
1. THE WAGE INCREASES PROVIDED FOR IN THE WAGE
ORDERS WERE DUE TO THE GUARDS AND NOT THE
SECURITY AGENCY;
2. A SECURITY AGENCY WHO DID NOT PAY WAGE INCREASE
TO ITS GUARDS IT HAD ALREADY TERMINATED AND
WITHOUT THEIR AUTHORIZATION CANNOT INSTITUTE AN
ACTION TO RECOVER SAID WAGE INCREASE FOR ITS
BENEFIT;
3. IN THE ABSENCE OF BAD FAITH AND WITHOUT THE TRIAL
COURT CORRECTLY ESTABLISHING THE BASIS FOR
ATTORNEY'S FEES, THE SAME MAY NOT BE AWARDED.
4. THE NATIONAL LABOR RELATIONS (SIC) IS THE PROPER
FORUM THAT HAS THE JURISDICTION TO RESOLVE THE
ISSUE OF WHETHER OR NOT THE PETITIONER IS LIABLE TO
PAY T H E P R I VAT E R E S P O N D E N T T H E WA G E A N D
ALLOWANCE INCREASES MANDATED UNDER WAGE ORDER
NOS. 5 AND 6.5
Reiterating its position below, petitioner asserts that private respondent has
no factual and legal basis to collect the benefits under subject Wage Order
Nos. 5 and 6 intended for the security guards without the authorization of
the security guards concerned. Inasmuch as the services of the forty-two
(42) security guards were already terminated at the time the complaint was
filed on August 15, 1988, private respondent's complaint partakes of the
nature of an action for recovery of what was supposedly due the guards
under said Wage Orders, amounts that they claim were never paid by
private respondent and therefore not collectible by the latter from the
petitioner. Petitioner also assails the award of attorney's fees in the amount
of P115,585.31 or 25% of the total adjustment claim of P462,341.25 for lack
of basis and for being unconscionable.
Moreover, petitioner submits that it is the National Labor Relations
Commission (NLRC) and not the civil courts that has jurisdiction to resolve
the issue involved in this case for it refers to the enforcement of wage
adjustment and other benefits due to private respondent's security guards
mandated under Wage Order Nos. 5 and 6. Considering that the RTC has
no jurisdiction, its decision is without force and effect.6
On the other hand, private respondent contends that the basis of its action
against petitioner-appellant is the enforcement of the Guard Service
Contract entered into by them, which is deemed amended by Section 6 of
Wage Order No. 5 and Section 9 of Wage Order No. 6; that pursuant to
their amended Guard Service Contract, the increases/adjustments in
Page 7 of 52 | LABREL – 4E | FT CASES B1
wages and ECOLA are due to private respondent and not to the security
guards who are not parties to the said contract. It is therefore immaterial
whether or not private respondent paid its security guards their wages as
adjusted by said Wage Orders and that since the forty-two (42) security
guards are not parties to the Guard Service Contract, there is no need for
them to authorize the filing of, or be joined in, this suit.
As regards the award to private respondent of the amount of P115,585.31
as attorney's fees, private respondent maintains that there is enough
evidence and/or basis for the grant thereof, considering that the adamant
attitude of the petitioner (in implementing the questioned Wage Orders)
compelled the herein private respondent, to litigate in court. Furthermore,
since the legal fee payable by private respondent to its counsel is
essentially on contingent basis, the amount of P115,583.31 granted by the
trial court which is 25% of the total claim is not unconscionable.
As regards the jurisdiction of the RTC, private respondent alleges that the
suit filed before the trial court is for the purpose of securing the upgrading
of the Guard Service Contract entered into by herein petitioner and private
respondent in June 1983. The enforcement of this written contract does not
fall under the jurisdiction of the NLRC because the money claims involved
therein did not arise from employer-employee relations between the parties
and is intrinsically a civil dispute. Thus, jurisdiction lies with the regular
courts. Private respondent further contends that petitioner is estopped or
barred from raising the question of jurisdiction for the first time before the
Supreme Court after having voluntarily submitted to the jurisdiction of the
regular courts below and having lost its case therein.7
We resolve to grant the petition.
We resolve first the issue of jurisdiction. We agree with the respondent that
the RTC has jurisdiction over the subject matter of the present case. It is
well settled in law and jurisprudence that where no employer-employee
relationship exists between the parties and no issue is involved which may
be resolved by reference to the Labor Code, other labor statutes or any
collective bargaining agreement, it is the Regional Trial Court that has
jurisdiction.8 In its complaint, private respondent is not seeking any relief
under the Labor Code but seeks payment of a sum of money and damages
on account of petitioner's alleged breach of its obligation under their Guard
Service Contract. The action is within the realm of civil law hence
jurisdiction over the case belongs to the regular courts.9 While the
resolution of the issue involves the application of labor laws, reference to
the labor code was only for the determination of the solidary liability of the
petitioner to the respondent where no employer-employee relation exists.
Article 217 of the Labor Code as amended vests upon the labor arbiters
exclusive original jurisdiction only over the following:
1. Unfair labor practices;
2. Termination disputes;

3. If accompanied with a claim for reinstatement, those cases that
workers may file involving wages, rates of pay, hours of work and
other terms and conditions of employment;
4. Claims for actual, moral exemplary and other form of damages
arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security,
Medicare and maternity benefits, all other claims, arising from
employer-employee relations, including those of persons in
domestic or household service, involving an amount exceeding five
thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
In all these cases, an employer-employee relationship is an indispensable
jurisdictional requisite;10 and there is none in this case.
On the merits, the core issue involved in the present petition is whether or
not petitioner is liable to the private respondent for the wage adjustments
provided under Wage Order Nos. 5 and 6 and for attorney's fees.
Private respondent admits that there is no employer-employee relationship
between it and the petitioner. The private respondent is an independent/job
contractor11 who assigned security guards at the petitioner's premises for a
stipulated amount per guard per month. The Contract of Security Services
expressly stipulated that the security guards are employees of the Agency
and not of the petitioner.12 Articles 106 and 107 of the Labor Code provides
the rule governing the payment of wages of employees in the event that the
contractor fails to pay such wages as follows:
Art. 106. Contractor or sub contractor. — Whenever an employer
enters into a contract with another person for the performance of
the former's work, the employees of the contractor and of the
latter's subcontractor, if any, shall be paid in accordance with the
provisions of this Code.
In the event that the contractor or subcontractor fails to pay the
wages of his employees in accordance with this Code, the
employer shall be jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent that
he is liable to employees directly employed by him.
xxx xxx xxx
Art. 107. Indirect employer. — The provisions of the immediately
preceding Article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts
Page 8 of 52 | LABREL – 4E | FT CASES B1
with an independent contractor for the performance of any work,
task, job or project.
It will be seen from the above provisions that the principal (petitioner) and
the contractor (respondent) are jointly and severally liable to the employees
f o r t h e i r w a g e s . T h i s C o u r t h e l d i n E a g l e S e c u r i t y,
Inc. vs. NLRC 13 and Spartan Security and Detective Agency,
Inc. vs. NLRC 14 that the joint and several liability of the contractor and the
principal is mandated by the Labor Code to assure compliance with the
provisions therein including the minimum wage. The contractor is made
liable by virtue of his status as direct employer. The principal, on the other
hand, is made the indirect employer of the contractor's employees to
secure payment of their wages should the contractor be unable to pay
them.15 Even in the absence of an employer-employee relationship, the law
itself establishes one between the principal and the employees of the
agency for a limited purpose i.e. in order to ensure that the employees are
paid the wages due them. In the above-mentioned cases, the solidary
liability of the principal and contractor was held to apply to the
aforementioned Wage Order Nos. 5 and 6.16 In ruling that under the Wage
Orders, existing security guard services contracts are amended to allow
adjustment of the consideration in order to cover payment of mandated
increases, and that the principal is ultimately liable for the said increases,
this Court stated:
The Wage Orders are explicit that payment of the increases are "to
be borne" by the principal or client. "To be borne", however, does
not mean that the principal, PTSI in this case, would directly pay
the security guards the wage and allowance increases because
there is no privity of contract between them. The security guards'
contractual relationship is with their immediate employer, EAGLE.
As an employer, EAGLE is tasked, among others, with the payment
of their wages [See Article VII Sec. 3 of the Contract for Security
Services, supraand Bautista vs. Inciong, G.R. No. 52824, March
16, 1988, 158 SCRA 665].
On the other hand, there existed a contractual agreement between
PTSI and EAGLE wherein the former availed of the security
services provided by the latter. In return, the security agency
collects from its client payment for its security services. This
payment covers the wages for the security guards and also
expenses for their supervision and training, the guards bonds,
firearms with ammunitions, uniforms and other equipments,
accessories, tools, materials and supplies necessary for the
maintenance of a security force.
Premises considered, the security guards' immediate recourse for
the payment of the increases is with their direct employer, EAGLE.
However, in order for the security agency to comply with the new
 Page 9 of 52 | LABREL – 4E | FT CASES B1

wage and allowance rates it has to pay the security guards, the respondent has not actually paid the security guards the wage increases
Wage Orders made specific provision to amend existing contracts granted under the Wage Orders in question. Neither is it alleged that there
for security services by allowing the adjustment of the is an extant claim for such wage adjustments from the security guards
consideration paid by the principal to the security agency concerned, whose services have already been terminated by the
concerned. What the Wage Orders require, therefore, is the contractor. Accordingly, private respondent has no cause of action against
amendment of the contracts as to the consideration to cover the petitioner to recover the wage increases. Needless to stress, the increases
service contractors' payment of the increases mandated. In the in wages are intended for the benefit of the laborers and the contractor may
end, therefore, ultimate liability for the payment of the increases not assert a claim against the principal for salary wage adjustments that it
rests with the principal. has not actually paid. Otherwise, as correctly put by the respondent, the
contractor would be unduly enriching itself by recovering wage increases,
In view of the foregoing, the security guards should claim the
for its own benefit.
amount of the increases from EAGLE. Under the Labor Code, in
case the agency fails to pay them the amounts claimed, PTSI Finally, considering that the private respondent has no cause of action
should be held solidarily liable with EAGLE [Articles 106, 107 and against the petitioner, private respondent is not entitled to attorney's fees.
109]. Should EAGLE pay, it can claim an adjustment from PTSI for 1âwphi1.nêt
an increase in consideration to cover the increases payable to the WHEREFORE, the petition is GRANTED. The decision of the Court of
security guards.17 Appeals dated May 24, 1993 is REVERSED and SET ASIDE. The
It is clear also from the foregoing that it is only when contractor pays the complaint of private respondent COMMANDO SECURITY SERVICE
increases mandated that it can claim an adjustment from the principal to AGENCY, INC. is hereby DISMISSED.
cover the increases payable to the security guards. The conclusion that the SO ORDERED.
right of the contractor (as principal debtor) to recover from the principal as
solidary co-debtor) arises only if he has paid the amounts for which both of
them are jointly and severally liable is in line with Article 1217 of the Civil
Code which provides:
Art. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary debtors offer to
pay, the creditor may choose which offer to accept.
He who made payment may claim from his codebtors only the
share which corresponds to each, with interest for the payment
already made. If the payment is made before the debt is due, no
interest for the intervening period may be demanded. . . .
Pursuant to the above provision, the right of reimbursement from a co-
debtor is recognized in favor of the one who paid.
It will be seen that the liability of the petitioner to reimburse the respondent
only arises if and when respondent actually pays its employees the
increases granted by Wage Order Nos. 5 and 6. Payment, which means not
only the delivery of money but also the performance, in any other manner,
of the obligation,18 is the operative fact which will entitle either of the
solidary debtors to seek reimbursement for the share which corresponds to
each of the debtors.
The records show that judgment was rendered by Labor Arbiter Newton R.
Sancho holding both petitioner and private respondent jointly and solidarily
liable to the security guards in a Decision19 dated October 17, 1986 (NLRC
Case No. 2849-MC-XI-86).20 However, it is not disputed that the private

G.R. No. 182295 June 26, 2013
7K CORPORATION, Petitioner, 

vs.

EDDIE ALBARICO, Respondent.
DECISION
SERENO, CJ.:
This is a Petition for Review on Certiorari filed under Rule 45 of the Revised
Rules of Court, asking the Court to determine whether a voluntary arbitrator
in a labor dispute exceeded his jurisdiction in deciding issues not specified
in the submission agreement of the parties. It assails the Decision1 dated
18 September 2007 and the Resolution2dated 17 March 2008 of the Court
of Appeals (CA).3
FACTS
When he was dismissed on 5 April 1993, respondent Eddie Albarico
(Albarico) was a regular employee of petitioner 7K Corporation, a company
selling water purifiers. He started working for the company in 1990 as a
salesman.4Because of his good performance, his employment was
regularized. He was also promoted several times: from salesman, he was
promoted to senior sales representative and then to acting team field
supervisor. In 1992, he was awarded the President’s Trophy for being one
of the company’s top water purifier specialist distributors.
In April of 1993, the chief operating officer of petitioner 7K Corporation
terminated Albarico’s employment allegedly for his poor sales performance.
5 Respondent had to stop reporting for work, and he subsequently
submitted his money claims against petitioner for arbitration before the
National Conciliation and Mediation Board (NCMB). The issue for voluntary
arbitration before the NCMB, according to the parties’ Submission
Agreement dated 19 April 1993, was whether respondent Albarico was
entitled to the payment of separation pay and the sales commission
reserved for him by the corporation.6
While the NCMB arbitration case was pending, respondent Albarico filed a
Complaint against petitioner corporation with the Arbitration Branch of the
National Labor Relations Commission (NLRC) for illegal dismissal with
money claims for overtime pay, holiday compensation, commission, and
food and travelling allowances.7 The Complaint was decided by the labor
arbiter in favor of respondent Albarico, who was awarded separation pay in
lieu of reinstatement, backwages and attorney’s fees.8
On appeal by petitioner, the labor arbiter’s Decision was vacated by the
NLRC for forum shopping on the part of respondent Albarico, because the
NCMB arbitration case was still pending.9 The NLRC Decision, which
explicitly stated that the dismissal was without prejudice to the pending
NCMB arbitration case,10 became final after no appeal was taken.
Page 10 of 52 | LABREL – 4E | FT CASES B1
On 17 September 1997, petitioner corporation filed its Position Paper in the
NCMB arbitration case.11 It denied that respondent was terminated from
work, much less illegally dismissed. The corporation claimed that he had
voluntarily stopped reporting for work after receiving a verbal reprimand for
his sales performance; hence, it was he who was guilty of abandonment of
employment. Respondent made an oral manifestation that he was adopting
the position paper he submitted to the labor arbiter, a position paper in
which the former claimed that he had been illegally dismissed.12
On 12 January 2005, almost 12 years after the filing of the NCMB case,
both parties appeared in a hearing before the NCMB.13 Respondent
manifested that he was willing to settle the case amicably with petitioner
based on the decision of the labor arbiter ordering the payment of
separation pay in lieu of reinstatement, backwages and attorney’s fees. On
its part, petitioner made a counter-manifestation that it was likewise
amenable to settling the dispute. However, it was willing to pay only the
separation pay and the sales commission according to the Submission
Agreement dated 19 April 1993.14
The factual findings of the voluntary arbitrator, as well as of the CA, are not
clear on what happened afterwards. Even the records are bereft of
sufficient information.
On 18 November 2005, the NCMB voluntary arbitrator rendered a Decision
finding petitioner corporation liable for illegal dismissal.15 The termination of
respondent Albarico, by reason of alleged poor performance, was found
invalid.16 The arbitrator explained that the promotions, increases in salary,
and awards received by respondent belied the claim that the latter was
performing poorly.17 It was also found that Albarico could not have
abandoned his job, as the abandonment should have been clearly shown.
Mere absence was not sufficient, according to the arbitrator, but must have
been accompanied by overt acts pointing to the fact that the employee did
not want to work anymore. It was noted that, in the present case, the
immediate filing of a complaint for illegal dismissal against the employer,
with a prayer for reinstatement, showed that the employee was not
abandoning his work. The voluntary arbitrator also found that Albarico was
dismissed from his work without due process.
However, it was found that reinstatement was no longer possible because
of the strained relationship of the parties.18 Thus, in lieu of reinstatement,
the voluntary arbitrator ordered the corporation to pay separation pay for
two years at P4,456 for each year, or a total amount of P8,912.
Additionally, in view of the finding that Albarico had been illegally dismissed,
the voluntary arbitrator also ruled that the former was entitled to backwages
in the amount of P90,804.19 Finally, the arbitrator awarded attorney’s fees in
respondent’s favor, because he had been compelled to file an action for
illegal dismissal.20

Petitioner corporation subsequently appealed to the CA, imputing to the
voluntary arbitrator grave abuse of discretion amounting to lack or excess
of jurisdiction for awarding backwages and attorney’s fees to respondent
Albarico based on the former’s finding of illegal dismissal.21 The arbitrator
contended that the issue of the legality of dismissal was not explicitly
included in the Submission Agreement dated 19 April 1993 filed for
voluntary arbitration and resolution. It prayed that the said awards be set
aside, and that only separation pay of P8,912.00 and sales commission
of P4,787.60 be awarded.
The CA affirmed the Decision of the voluntary arbitrator, but eliminated the
award of attorney’s fees for having been made without factual, legal or
equitable justification.22 Petitioner’s Motion for Partial Reconsideration was
denied as well.23
Hence, this Petition.
ISSUE
The issue before the Court is whether the CA committed reversible error in
finding that the voluntary arbitrator properly assumed jurisdiction to decide
the issue of the legality of the dismissal of respondent as well as the latter’s
entitlement to backwages, even if neither the legality nor the entitlement
was expressedly claimed in the Submission Agreement of the parties.
The Petition is denied for being devoid of merit.
DISCUSSION
Preliminarily, we address petitioner’s claim that under Article 217 of the
Labor Code, original and exclusive jurisdiction over termination disputes,
such as the present case, is lodged only with the labor arbiter of the NLRC.
24
Petitioner overlooks the proviso in the said article, thus:
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a. Except as otherwise provided under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or nonagricultural:
xxxx
2. Termination disputes;
xxxx
6. Except claims for Employees Compensation, Social Security, Medicare
and maternity benefits, all other claims arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000.00) regardless
Page 11 of 52 | LABREL – 4E | FT CASES B1
of whether accompanied with a claim for reinstatement. (Emphases
supplied)
Thus, although the general rule under the Labor Code gives the labor
arbiter exclusive and original jurisdiction over termination disputes, it also
recognizes exceptions. One of the exceptions is provided in Article 262 of
the Labor Code. In San Jose v. NLRC,25 we said:
The phrase "Except as otherwise provided under this Code" refers to the
following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxxx
(c) Cases arising from the interpretation or implementation of collective
bargaining agreement and those arising from the interpretation or
enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitrator as may be provided in said agreement.
B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator
or panel of Voluntary Arbitrators, upon agreement of the parties, shall also
hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks. (Emphasis supplied)
We also said in the same case that "the labor disputes referred to in the
same Article 262 of the Labor Code can include all those disputes
mentioned in Article 217 over which the Labor Arbiter has original and
exclusive jurisdiction."26
From the above discussion, it is clear that voluntary arbitrators may, by
agreement of the parties, assume jurisdiction over a termination dispute
such as the present case, contrary to the assertion of petitioner that they
may not.
We now resolve the main issue. Petitioner argues that, assuming that the
voluntary arbitrator has jurisdiction over the present termination dispute, the
latter should have limited his decision to the issue contained in the
Submission Agreement of the parties – the issue of whether respondent
Albarico was entitled to separation pay and to the sales commission the
latter earned before being terminated.27 Petitioner asserts that under Article
262 of the Labor Code, the jurisdiction of a voluntary arbitrator is strictly
limited to the issues that the parties agree to submit. Thus, it contends that
the voluntary arbitrator exceeded his jurisdiction when he resolved the
issues of the legality of the dismissal of respondent and the latter’s
entitlement to backwages on the basis of a finding of illegal dismissal.
According to petitioner, the CA wrongly concluded that the issue of
respondent’s entitlement to separation pay was necessarily based on his
allegation of illegal dismissal, thereby making the issue of the legality of his
dismissal implicitly submitted to the voluntary arbitrator for resolution.

28 Petitioner argues that this was an erroneous conclusion, because
separation pay may in fact be awarded even in circumstances in which
there is no illegal dismissal.
We rule that although petitioner correctly contends that separation pay may
in fact be awarded for reasons other than illegal dismissal, the
circumstances of the instant case lead to no other conclusion than that the
claim of respondent Albarico for separation pay was premised on his
allegation of illegal dismissal. Thus, the voluntary arbitrator properly
assumed jurisdiction over the issue of the legality of his dismissal.
True, under the Labor Code, separation pay may be given not only when
there is illegal dismissal. In fact, it is also given to employees who are
terminated for authorized causes, such as redundancy, retrenchment or
installation of labor-saving devices under Article 28329 of the Labor Code.
Additionally, jurisprudence holds that separation pay may also be awarded
for considerations of social justice, even if an employee has been
terminated for a just cause other than serious misconduct or an act
reflecting on moral character.30 The Court has also ruled that separation
pay may be awarded if it has become an established practice of the
company to pay the said benefit to voluntarily resigning employees31 or to
those validly dismissed for non-membership in a union as required in a
closed-shop agreement.32
The above circumstances, however, do not obtain in the present case.
1âwphi1 There is no claim that the issue of entitlement to separation pay is
being resolved in the context of any authorized cause of termination
undertaken by petitioner corporation. Neither is there any allegation that a
consideration of social justice is being resolved here. In fact, even in
instances in which separation pay is awarded in consideration of social
justice, the issue of the validity of the dismissal still needs to be resolved
first. Only when there is already a finding of a valid dismissal for a just
cause does the court then award separation pay for reason of social justice.
The other circumstances when separation pay may be awarded are not
present in this case.
The foregoing findings indisputably prove that the issue of separation pay
emanates solely from respondent’s allegation of illegal dismissal. In fact,
petitioner itself acknowledged the issue of illegal dismissal in its position
paper submitted to the NCMB.
Moreover, we note that even the NLRC was of the understanding that the
NCMB arbitration case sought to resolve the issue of the legality of the
dismissal of the respondent. In fact, the identity of the issue of the legality
of his dismissal, which was previously submitted to the NCMB, and later
submitted to the NLRC, was the basis of the latter’s finding of forum
shopping and the consequent dismissal of the case before it. In fact,
petitioner also implicitly acknowledged this when it filed before the NLRC its
Motion to Dismiss respondent’s Complaint on the ground of forum
Page 12 of 52 | LABREL – 4E | FT CASES B1
shopping. Thus, it is now estopped from claiming that the issue before the
NCMB does not include the issue of the legality of the dismissal of
respondent. Besides, there has to be a reason for deciding the issue of
respondent’s entitlement to separation pay. To think otherwise would lead to
absurdity, because the voluntary arbitrator would then be deciding that
issue in a vacuum. The arbitrator would have no basis whatsoever for
saying that Albarico was entitled to separation pay or not if the issue of the
legality of respondent’s dismissal was not resolve first.
Hence, the voluntary arbitrator correctly assumed that the core issue
behind the issue of separation pay is the legality of the dismissal of
respondent. Moreover, we have ruled in Sime Darby Pilipinas, Inc. v.
Deputy Administrator Magsalin33 that a voluntary arbitrator has plenary
jurisdiction and authority to interpret an agreement to arbitrate and to
determine the scope of his own authority when the said agreement is vague
— subject only, in a proper case, to the certiorari jurisdiction of this Court.
Having established that the issue of the legality of dismissal of Albarico was
in fact necessarily – albeit not explicitly – included in the Submission
Agreement signed by the parties, this Court rules that the voluntary
arbitrator rightly assumed jurisdiction to decide the said issue.
Consequently, we also rule that the voluntary arbitrator may award
backwages upon a finding of illegal dismissal, even though the issue of
entitlement thereto is not explicitly claimed in the Submission Agreement.
Backwages, in general, are awarded on the ground of equity as a form of
relief that restores the income lost by the terminated employee by reason of
his illegal dismissal.34
In Sime Darby we ruled that although the specific issue presented by the
parties to the voluntary arbitrator was only "the issue of performance
bonus," the latter had the authority to determine not only the issue of
whether or not a performance bonus was to be granted, but also the related
question of the amount of the bonus, were it to be granted. We explained
that there was no indication at all that the parties to the arbitration
agreement had regarded "the issue of performance bonus" as a two-tiered
issue, of which only one aspect was being submitted to arbitration. Thus,
we held that the failure of the parties to limit the issues specifically to that
which was stated allowed the arbitrator to assume jurisdiction over the
related issue.
Similarly, in the present case, there is no indication that the issue of illegal
dismissal should be treated. as a two-tiered issue whereupon entitlement to
backwages must be determined separately. Besides, "since arbitration is a
final resort for the adjudication of disputes," the voluntary arbitrator in the
present case can assume that he has the necessary power to make a final
settlement.35 Thus, we rule that the voluntary arbitrator correctly assumed
jurisdiction over the issue of entitlement of respondent Albarico to
backwages on the basis of the former's finding of illegal dismissal.
 Page 13 of 52 | LABREL – 4E | FT CASES B1

WHEREFORE, premises considered, the instant Petition is DENIED. The

18 September 2007 Decision and 17 March 2008 Resolution of the Court of
Appeals in CA-G.R. SP No. 92526, are hereby AFFIRMED.
SO ORDERED.

G.R. No. 179652 May 8, 2009
PEOPLE'S BROADCASTING (BOMBO RADYO PHILS., INC.), Petitioner, 

vs.
 @ P 2,000/15 days + 1.5 mos = P 6,000
THE SECRETARY OF THE DEPARTMENT OF LABOR AND
EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and
JANDELEON JUEZAN, Respondents.
DECISION
TINGA, J.:
The present controversy concerns a matter of first impression, requiring as
it does the determination of the demarcation line between the prerogative of
the Department of Labor and Employment (DOLE) Secretary and his duly
authorized representatives, on the one hand, and the jurisdiction of the
National Labor Relations Commission, on the other, under Article 128 (b) of
the Labor Code in an instance where the employer has challenged the
jurisdiction of the DOLE at the very first level on the ground that no
employer-employee relationship ever existed between the parties.
I.
The instant petition for certiorari under Rule 65 assails the decision and the
resolution of the Court of Appeals dated 26 October 2006 and 26 June
2007, respectively, in C.A. G.R. CEB-SP No. 00855.1
The petition traces its origins to a complaint filed by Jandeleon Juezan
(respondent) against People’s Broadcasting Service, Inc. (Bombo Radyo
Phils., Inc) (petitioner) for illegal deduction, non-payment of service
incentive leave, 13th month pay, premium pay for holiday and rest day and
illegal diminution of benefits, delayed payment of wages and non-coverage
of SSS, PAG-IBIG and Philhealth before the Department of Labor and
Employment (DOLE) Regional Office No. VII, Cebu City.2 On the basis of
the complaint, the DOLE conducted a plant level inspection on 23
September 2003. In the Inspection Report Form,3 the Labor Inspector wrote
under the heading "Findings/Recommendations" "non-diminution of
benefits" and "Note: Respondent deny employer-employee relationship with
the complainant- see Notice of Inspection results." In the Notice of
Inspection Results4 also bearing the date 23 September 2003, the Labor
Inspector made the following notations:
Management representative informed that complainant is a drama talent
hired on a per drama " participation basis" hence no employer-
employeeship [sic] existed between them. As proof of this, management
presented photocopies of cash vouchers, billing statement, employments of
specific undertaking (a contract between the talent director & the
complainant), summary of billing of drama production etc. They (mgt.) has
[sic] not control of the talent if he ventures into another contract w/ other
broadcasting industries.
Page 14 of 52 | LABREL – 4E | FT CASES B1
On the other hand, complainant Juezan’s alleged violation of non-
diminution of benefits is computed as follows:
(August 1/03 to Sept 15/03)
Note: Recommend for summary investigation or whatever action deem
proper.5
Petitioner was required to rectify/restitute the violations within five (5) days
from receipt. No rectification was effected by petitioner; thus, summary
investigations were conducted, with the parties eventually ordered to
submit their respective position papers.6
In his Order dated 27 February 2004,7 DOLE Regional Director Atty.
Rodolfo M. Sabulao (Regional Director) ruled that respondent is an
employee of petitioner, and that the former is entitled to his money claims
amounting to P203,726.30. Petitioner sought reconsideration of the Order,
claiming that the Regional Director gave credence to the documents offered
by respondent without examining the originals, but at the same time he
missed or failed to consider petitioner’s evidence. Petitioner’s motion for
reconsideration was denied.8 On appeal to the DOLE Secretary, petitioner
denied once more the existence of employer-employee relationship. In its
Order dated 27 January 2005, the Acting DOLE Secretary dismissed the
appeal on the ground that petitioner did not post a cash or surety bond and
instead submitted a Deed of Assignment of Bank Deposit.9
Petitioner elevated the case to the Court of Appeals, claiming that it was
denied due process when the DOLE Secretary disregarded the evidence it
presented and failed to give it the opportunity to refute the claims of
respondent. Petitioner maintained that there is no employer-employee
relationship had ever existed between it and respondent because it was the
drama directors and producers who paid, supervised and disciplined
respondent. It also added that the case was beyond the jurisdiction of the
DOLE and should have been considered by the labor arbiter because
respondent’s claim exceeded P5,000.00.
The Court of Appeals held that petitioner was not deprived of due process
as the essence thereof is only an opportunity to be heard, which petitioner
had when it filed a motion for reconsideration with the DOLE Secretary. It
further ruled that the latter had the power to order and enforce compliance
with labor standard laws irrespective of the amount of individual claims
because the limitation imposed by Article 29 of the Labor Code had been
repealed by Republic Act No. 7730.10 Petitioner sought reconsideration of
the decision but its motion was denied.11
Before this Court, petitioner argues that the National Labor Relations
Commission (NLRC), and not the DOLE Secretary, has jurisdiction over
respondent’s claim, in view of Articles 217 and 128 of the Labor Code.12 It
adds that the Court of Appeals committed grave abuse of discretion when it

dismissed petitioner’s appeal without delving on the issues raised therein,
particularly the claim that no employer-employee relationship had ever
existed between petitioner and respondent. Finally, petitioner avers that
there is no appeal, or any plain, speedy and adequate remedy in the
ordinary course of law available to it.
On the other hand, respondent posits that the Court of Appeals did not
abuse its discretion. He invokes Republic Act No. 7730, which "removes
the jurisdiction of the Secretary of Labor and Employment or his duly
authorized representatives, from the effects of the restrictive provisions of
Article 129 and 217 of the Labor Code, regarding the confinement of
jurisdiction based on the amount of claims."13 Respondent also claims that
petitioner was not denied due process since even when the case was with
the Regional Director, a hearing was conducted and pieces of evidence
were presented. Respondent stands by the propriety of the Court of
Appeals’ ruling that there exists an employer-employee relationship
between him and petitioner. Finally, respondent argues that the instant
petition for certiorari is a wrong mode of appeal considering that petitioner
had earlier filed a Petition for Certiorari, Mandamus and Prohibition with the
Court of Appeals; petitioner, instead, should have filed a Petition for
Review.14
II.
The significance of this case may be reduced to one simple question—does
the Secretary of Labor have the power to determine the existence of an
employer-employee relationship?
To resolve this pivotal issue, one must look into the extent of the visitorial
and enforcement power of the DOLE found in Article 128 (b) of the Labor
Code, as amended by Republic Act 7730. It reads:
Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this
Code to the contrary, and in cases where the relationship of employer-
employee still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue compliance orders
to give effect to the labor standards provisions of this Code and other labor
legislation based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of inspection. The
Secretary or his duly authorized representative shall issue writs of
execution to the appropriate authority for the enforcement of their orders,
except in cases where the employer contests the findings of the labor
employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection.
(emphasis supplied)
xxx
The provision is quite explicit that the visitorial and enforcement power of
the DOLE comes into play only "in cases when the relationship of
Page 15 of 52 | LABREL – 4E | FT CASES B1
employer-employee still exists." It also underscores the avowed objective
underlying the grant of power to the DOLE which is "to give effect to the
labor standard provision of this Code and other labor legislation." Of
course, a person’s entitlement to labor standard benefits under the labor
laws presupposes the existence of employer-employee relationship in the
first place.
The clause "in cases where the relationship of employer-employee still
exists" signifies that the employer-employee relationship must have existed
even before the emergence of the controversy. Necessarily, the DOLE’s
power does not apply in two instances, namely: (a) where the employer-
employee relationship has ceased; and (b) where no such relationship has
ever existed.
The first situation is categorically covered by Sec. 3, Rule 11 of the Rules
on the Disposition of Labor Standards Cases15 issued by the DOLE
Secretary. It reads:
Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE
INSPECTION
Sec. 3. Complaints where no employer-employee relationship actually
exists. Where employer-employee relationship no longer exists by reason
of the fact that it has already been severed, claims for payment of monetary
benefits fall within the exclusive and original jurisdiction of the labor
arbiters. Accordingly, if on the face of the complaint, it can be ascertained
that employer-employee relationship no longer exists, the case, whether
accompanied by an allegation of illegal dismissal, shall immediately be
endorsed by the Regional Director to the appropriate branch of the National
Labor Relations Commission (NLRC).
In the recent case of Bay Haven, Inc. v. Abuan,16 this Court recognized the
first situation and accordingly ruled that a complainant’s allegation of his
illegal dismissal had deprived the DOLE of jurisdiction as per Article 217 of
the Labor Code.17
In the first situation, the claim has to be referred to the NLRC because it is
the NLRC which has jurisdiction in view of the termination of the employer-
employee relationship. The same procedure has to be followed in the
second situation since it is the NLRC that has jurisdiction in view of the
absence of employer-employee relationship between the evidentiary parties
from the start.
Clearly the law accords a prerogative to the NLRC over the claim when the
employer-employee relationship has terminated or such relationship has
not arisen at all. The reason is obvious. In the second situation especially,
the existence of an employer-employee relationship is a matter which is not
easily determinable from an ordinary inspection, necessarily so, because
the elements of such a relationship are not verifiable from a mere ocular
examination. The intricacies and implications of an employer-employee

relationship demand that the level of scrutiny should be far above the
cursory and the mechanical. While documents, particularly documents
found in the employer’s
office are the primary source materials, what may prove decisive are
factors related to the history of the employer’s business operations, its
current state as well as accepted contemporary practices in the industry.
More often than not, the question of employer-employee relationship
becomes a battle of evidence, the determination of which should be
comprehensive and intensive and therefore best left to the specialized
quasi-judicial body that is the NLRC.
It can be assumed that the DOLE in the exercise of its visitorial and
enforcement power somehow has to make a determination of the existence
of an employer-employee relationship. Such prerogatival determination,
however, cannot be coextensive with the visitorial and enforcement power
itself. Indeed, such determination is merely preliminary, incidental and
collateral to the DOLE’s primary function of enforcing labor standards
provisions. The determination of the existence of employer-employee
relationship is still primarily lodged with the NLRC. This is the meaning of
the clause "in cases where the relationship of employer-employee still
exists" in Art. 128 (b).
Thus, before the DOLE may exercise its powers under Article 128, two
important questions must be resolved: (1) Does the employer-employee
relationship still exist, or alternatively, was there ever an employer-
employee relationship to speak of; and (2) Are there violations of the Labor
Code or of any labor law?
The existence of an employer-employee relationship is a statutory
prerequisite to and a limitation on the power of the Secretary of Labor, one
which the legislative branch is entitled to impose. The rationale underlying
this limitation is to eliminate the prospect of competing conclusions of the
Secretary of Labor and the NLRC, on a matter fraught with questions of fact
and law, which is best resolved by the quasi-judicial body, which is the
NRLC, rather than an administrative official of the executive branch of the
government. If the Secretary of Labor proceeds to exercise his visitorial and
enforcement powers absent the first requisite, as the dissent proposes, his
office confers jurisdiction on itself which it cannot otherwise acquire.
The approach suggested by the dissent is frowned upon by common law.
To wit:
[I]t is a general rule, that no court of limited jurisdiction can give itself
jurisdiction by a wrong decision on a point collateral to the merits of the
case upon which the limit to its jurisdiction depends; and however its
decision may be final on all particulars, making up together that subject
matter which, if true, is within its jurisdiction, and however necessary in
many cases it may be for it to make a preliminary inquiry, whether some
Page 16 of 52 | LABREL – 4E | FT CASES B1
collateral matter be or be not within the limits, yet, upon this preliminary
question, its decision must always be open to inquiry in the superior court.18
A more liberal interpretative mode, "pragmatic or functional analysis," has
also emerged in ascertaining the jurisdictional boundaries of administrative
agencies whose jurisdiction is established by statute. Under this approach,
the Court examines the intended function of the tribunal and decides
whether a particular provision falls within or outside that function, rather
than making the provision itself the determining centerpiece of the analysis.
19Yet even under this more expansive approach, the dissent fails.
A reading of Art. 128 of the Labor Code reveals that the Secretary of Labor
or his authorized representatives was granted visitorial and enforcement
powers for the purpose of determining violations of, and enforcing, the
Labor Code and any labor law, wage order, or rules and regulations issued
pursuant thereto. Necessarily, the actual existence of an employer-
employee relationship affects the complexion of the putative findings that
the Secretary of Labor may determine, since employees are entitled to a
different set of rights under the Labor Code from the employer as opposed
to non-employees. Among these differentiated rights are those accorded by
the "labor standards" provisions of the Labor Code, which the Secretary of
Labor is mandated to enforce. If there is no employer-employee
relationship in the first place, the duty of the employer to adhere to those
labor standards with respect to the non-employees is questionable.
This decision should not be considered as placing an undue burden on the
Secretary of Labor in the exercise of visitorial and enforcement powers, nor
seen as an unprecedented diminution of the same, but rather a recognition
of the statutory limitations thereon. A mere assertion of absence of
employer-employee relationship does not deprive the DOLE of jurisdiction
over the claim under Article 128 of the Labor Code. At least a prima facie
showing of such absence of relationship, as in this case, is needed to
preclude the DOLE from the exercise of its power. The Secretary of Labor
would not have been precluded from exercising the powers under Article
128 (b) over petitioner if another person with better-grounded claim of
employment than that which respondent had. Respondent, especially if he
were an employee, could have very well enjoined other employees to
complain with the DOLE, and, at the same time, petitioner could ill-afford to
disclaim an employment relationship with all of the people under its aegis.
Without a doubt, petitioner, since the inception of this case had been
consistent in maintaining that respondent is not its employee. Certainly, a
preliminary determination, based on the evidence offered, and noted by the
Labor Inspector during the inspection as well as submitted during the
proceedings before the Regional Director puts in genuine doubt the
existence of employer-employee relationship. From that point on, the
prudent recourse on the part of the DOLE should have been to refer
respondent to the NLRC for the proper dispensation of his claims.

Furthermore, as discussed earlier, even the evidence relied on by the
Regional Director in his order are mere self-serving declarations of
respondent, and hence cannot be relied upon as proof of employer-
employee relationship.
III.
Aside from lack of jurisdiction, there is another cogent reason to to set
aside the Regional Director’s 27 February 2004 Order. A careful study of
the case reveals that the said Order, which found respondent as an
employee of petitioner and directed the payment of respondent’s money
claims, is not supported by substantial evidence, and was even made in
disregard of the evidence on record.
It is not enough that the evidence be simply considered. The standard is
substantial evidence as in all other quasi-judicial agencies. The standard
employed in the last sentence of Article 128(b) of the Labor Code that the
documentary proofs be "considered in the course of inspection" does not
apply. It applies only to issues other than the fundamental issue of
existence of employer-employee relationship. A contrary rule would lead to
controversies on the part of labor officials in resolving the issue of
employer-employee relationship. The onset of arbitrariness is the advent of
denial of substantive due process.
As a general rule, the Supreme Court is not a trier of facts. This applies
with greater force in cases before quasi-judicial agencies whose findings of
fact are accorded great respect and even finality. To be sure, the same
findings should be supported by substantial evidence from which the said
tribunals can make its own independent evaluation of the facts. Likewise, it
must not be rendered with grave abuse of discretion; otherwise, this Court
will not uphold the tribunals’ conclusion.20 In the same manner, this Court
will not hesitate to set aside the labor tribunal’s findings of fact when it is
clearly shown that they were arrived at arbitrarily or in disregard of the
evidence on record or when there is showing of fraud or error of law.21
At the onset, it is the Court’s considered view that the existence of
employer- employee relationship could have been easily resolved, or at
least prima facie determined by the labor inspector, during the inspection by
looking at the records of petitioner which can be found in the work
premises. Nevertheless, even if the labor inspector had noted petitioner’s
manifestation and documents in the Notice of Inspection Results, it is clear
that he did not give much credence to said evidence, as he did not find the
need to investigate the matter further. Considering that the documents
shown by petitioner, namely: cash vouchers, checks and statements of
account, summary billings evidencing payment to the alleged real employer
of respondent, letter-contracts denominated as "Employment for a Specific
Undertaking," prima facie negate the existence of employer-employee
relationship, the labor inspector could have exerted a bit more effort and
looked into petitioner’s payroll, for example, or its roll of employees, or
Page 17 of 52 | LABREL – 4E | FT CASES B1
interviewed other employees in the premises. After all, the labor inspector,
as a labor regulation officer is given "access to employer’s records and
premises at any time of day or night whenever work is being undertaken
therein, and the right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be necessary to
determine violations or which may aid in the enforcement of this Code and
of any labor law, wage order or rules and regulations pursuant
thereto."22 Despite these far-reaching powers of labor regulation officers,
records reveal that no additional efforts were exerted in the course of the
inspection.
The Court further examined the records and discovered to its dismay that
even the Regional Director turned a blind eye to the evidence presented by
petitioner and relied instead on the self-serving claims of respondent.
In his position paper, respondent claimed that he was hired by petitioner in
September 1996 as a radio talent/spinner, working from 8:00 am until 5
p.m., six days a week, on a gross rate of P60.00 per script, earning an
average of P15,0000.00 per month, payable on a semi-monthly basis. He
added that the payment of wages was delayed; that he was not given any
service incentive leave or its monetary commutation, or his 13th month pay;
and that he was not made a member of the Social Security System (SSS),
Pag-Ibig and PhilHealth. By January 2001, the number of radio programs of
which respondent was a talent/spinner was reduced, resulting in the
reduction of his monthly income from P15,000.00 to only P4,000.00, an
amount he could barely live on. Anent the claim of petitioner that no
employer-employee relationship ever existed, respondent argued that that
he was hired by petitioner, his wages were paid under the payroll of the
latter, he was under the control of petitioner and its agents, and it was
petitioner who had the power to dismiss him from his employment.23 In
support of his position paper, respondent attached a photocopy of an
identification card purportedly issued by petitioner, bearing respondent’s
picture and name with the designation "Spinner"; at the back of the I.D., the
following is written: " This certifies that the card holder is a duly Authorized
MEDIA Representative of BOMBO RADYO PHILIPPINES … THE NO.1
Radio Network in the Country ***BASTA RADYO BOMBO***"24 Respondent
likewise included a Certification which reads:
This is to certify that MR. JANDELEON JUEZAN is a program employee of
PEOPLE’S BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo
Cebu) since 1990 up to the present.
Furtherly certifies that Mr. Juezan is receiving a monthly salary of FIFTEEN
THOUSAND (P15,000.00) PESOS.
This certification is issued upon the request of the above stated name to
substantiate loan requirement.
Given this 18th day of April 2000, Cebu City , Philippines.

(signed)
 Furthermore, this is the property of Bombo Radyo Philippines and
GREMAN B. SOLANTE
 must be surrendered upon separation from the company.
Station Manager
On the other hand, petitioner maintained in its position paper that
respondent had never been its employee. Attached as annexes to its
position paper are photocopies of cash vouchers it issued to drama
producers, as well as letters of employment captioned "Employment for a
Specific Undertaking", wherein respondent was appointed by different
drama directors as spinner/narrator for specific radio programs.25
In his Order, the Regional Director merely made a passing remark on
petitioner’s claim of lack of employer-employee relationship—a token
paragraph—and proceeded to a detailed recitation of respondent’s
allegations. The documents introduced by petitioner in its position paper
and even those presented during the inspection were not given an iota of
credibility. Instead, full recognition and acceptance was accorded to the
claims of respondent—from the hours of work to his monthly salary, to his
alleged actual duties, as well as to his alleged "evidence." In fact, the
findings are anchored almost verbatim on the self-serving allegations of
respondent.
Furthermore, respondent’s pieces of evidence—the identification card and
the certification issued by petitioner’s Greman Solante— are not even
determinative of an employer-employee relationship. The certification,
issued upon the request of respondent, specifically stated that "MR.
JANDELEON JUEZAN is a program employee of PEOPLE’S
BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo Cebu)," it is not
therefore "crystal clear that complainant is a station employee rather than a
program employee hence entitled to all the benefits appurtenant
thereto,"26 as found by the DOLE Regional Director. Respondent should be
bound by his own evidence. Moreover, the classification as to whether one
is a "station employee" and "program employee," as lifted from Policy
Instruction No. 40,27 dividing the workers in the broadcast industry into only
two groups is not binding on this Court, especially when the classification
has no basis either in law or in fact.28
Even the identification card purportedly issued by petitioner is not proof of
employer-employee relationship since it only identified respondent as an
"Authorized Representative of Bombo Radyo…," and not as an employee.
The phrase gains significance when compared vis a vis the following
notation in the sample identification cards presented by petitioner in its
motion for reconsideration:
1. This is to certify that the person whose picture and signature
appear hereon is an employee of Bombo Radio Philippines.
2. This ID must be worn at all times within Bombo Radyo
Philippines premises for proper identification and security.
Page 18 of 52 | LABREL – 4E | FT CASES B1
HUMAN RESOURCE DEPARMENT
(Signed)

JENALIN D. PALER

HRD HEAD
Respondent tried to address the discrepancy between his identification
card and the standard identification cards issued by petitioner to its
employees by arguing that what he annexed to his position paper was the
old identification card issued to him by petitioner. He then presented a
photocopy of another "old" identification card, this time purportedly issued
to one of the employees who was issued the new identification card
presented by petitioner.29Respondent’s argument does not convince. If it
were true that he is an employee of petitioner, he would have been issued a
new identification card similar to the ones presented by petitioner, and he
should have presented a copy of such new identification card. His failure to
show a new identification card merely demonstrates that what he has is
only his "Media" ID, which does not constitute proof of his employment with
petitioner.
It has long been established that in administrative and quasi-judicial
proceedings, substantial evidence is sufficient as a basis for judgment on
the existence of employer-employee relationship. Substantial evidence,
which is the quantum of proof required in labor cases, is "that amount of
relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion."30 No particular form of evidence is required to prove
the existence of such employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted.31 Hence,
while no particular form of evidence is required, a finding that such
relationship exists must still rest on some substantial evidence. Moreover,
the substantiality of the evidence depends on its quantitative as well as
its qualitative aspects.32
In the instant case, save for respondent’s self-serving allegations and self-
defeating evidence, there is no substantial basis to warrant the Regional
Director’s finding that respondent is an employee of petitioner. Interestingly,
the Order of the Secretary of Labor denying petitioner’s appeal dated 27
January 2005, as well as the decision of the Court of Appeals dismissing
the petition for certiorari, are silent on the issue of the existence of an
employer-employee relationship, which further suggests that no real and
proper determination the existence of such relationship was ever made by
these tribunals. Even the dissent skirted away from the issue of the
existence of employer-employee relationship and conveniently ignored the
dearth of evidence presented by respondent.
Although substantial evidence is not a function of quantity but rather of
quality, the peculiar environmental circumstances of the instant case

demand that something more should have been proffered.33 Had there
been other proofs of employment, such as respondent’s inclusion in
petitioner’s payroll, or a clear exercise of control, the Court would have
affirmed the finding of employer-employee relationship. The Regional
Director, therefore, committed grievous error in ordering petitioner to
answer for respondent’s claims. Moreover, with the conclusion that no
employer-employee relationship has ever existed between petitioner and
respondent, it is crystal-clear that the DOLE Regional Director had no
jurisdiction over respondent’s complaint. Thus, the improvident exercise of
power by the Secretary of Labor and the Regional Director behooves the
court to subject their actions for review and to invalidate all the subsequent
orders they issued.
IV.
The records show that petitioner’s appeal was denied because it had
allegedly failed to post a cash or surety bond. What it attached instead to its
appeal was the Letter Agreement34 executed by petitioner and its bank, the
cash voucher,35 and the Deed of Assignment of Bank Deposits.36 According
to the DOLE, these documents do not constitute the cash or surety bond
contemplated by law; thus, it is as if no cash or surety bond was posted
when it filed its appeal.
The Court does not agree.
The provision on appeals from the DOLE Regional Offices to the DOLE
Secretary is in the last paragraph of Art. 128 (b) of the Labor Code, which
reads:
An order issued by the duly authorized representative of the Secretary of
Labor and Employment under this article may be appealed to the latter. In
case said order involves 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 Secretary of Labor
and Employment in the amount equivalent to the monetary award in the
order appealed from. (emphasis supplied)
While the requirements for perfecting an appeal must be strictly followed as
they are considered indispensable interdictions against needless delays
and for orderly discharge of judicial business, the law does admit
exceptions when warranted by the circumstances. Technicality should not
be allowed to stand in the way of equitably and completely resolving the
rights and obligations of the parties.37 Thus, in some cases, the bond
requirement on appeals involving monetary awards had been relaxed, such
as when (i) there was substantial compliance with the Rules; (ii) the
surrounding facts and circumstances constitute meritorious ground to
reduce the bond; (iii) a liberal interpretation of the requirement of an appeal
bond would serve the desired objective of resolving controversies on the
merits; or (iv) the appellants, at the very least exhibited their willingness
Page 19 of 52 | LABREL – 4E | FT CASES B1
and/or good faith by posting a partial bond during the reglementary period.
38
A review of the documents submitted by petitioner is called for to determine
whether they should have been admitted as or in lieu of the surety or cash
bond to sustain the appeal and serve the ends of substantial justice.
The Deed of Assignment reads:
DEED OF ASSIGNMENT OF BANK DEPOSIT 

WITH SPECIAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, GREMAN B. SOLANTE in my capacity as Station Manager of DYMF
Cebu City, PEOPLE’S BROADCASTING SERVICES, INC., a corporation
duly authorized and existing under and by virtue of the laws of the
Philippines, for and in consideration of the sum of PESOS: TWO
HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX
PESOS & 30/100 ONLY (P203,726.30) Phil. Currency, as CASH BOND
GUARANTEE for the monetary award in favor to the Plaintiff in the Labor
Case docketed as LSED Case No. R0700-2003-09-CI-09, now pending
appeal.
That Respondent-Appellant do hereby undertake to guarantee available
and sufficient funds covered by Platinum Savings Deposit (PSD) No.
010-8-00038-4 of PEOPLE’S BROADCASTING SERVICES, INC. in the
amount of PESOS: TWO HUNDRED THREE THOUSAND SEVEN
HUNDRED TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) payable
to Plaintiff-Appellee/Department of Labor and Employment Regional Office
VII at Queen City Development Bank, Cebu Branch, Sanciangko St. Cebu
City.
It is understood that the said bank has the full control of Platinum Savings
Deposit (PSD) No. 010-8-00038-4 from and after this date and that said
sum cannot be withdrawn by the Plaintiff-Appellee/ Department of Labor
and Employment Regional Office VII until such time that a Writ of Execution
shall be ordered by the Appellate Office.
FURTHER, this Deed of Assignment is limited to the principal amount of
PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED
TWENTY SIX PESOS & 30/100 ONLY (P203,726.30) Phil. Currency,
therefore, any interest to be earned from the said Deposit will be for the
account holder.
IN WITNESS WHEREOF, I have hereunto affixed my signature this 18th
day if June, 2004, in the City of Cebu, Philippines.
PEOPLE’S BROADCASTING SERVICES, INC.
By:

(Signed)
 making withdrawals from the savings account. Finally, the amount
GREMAN B. SOLANTE
 deposited was measly compared to the total monetary award in the
Station Manager
As priorly mentioned, the Deed of Assignment was accompanied by a
Letter Agreement between Queen City Development Bank and petitioner
concerning Platinum Savings Deposit (PSD) No. 010-8-00038-4,39 and a
Cash Voucher issued by petitioner showing the amount of P203,726.30
deposited at the said bank.
Casting aside the technical imprecision and inaptness of words that mark
the three documents, a liberal reading reveals the documents petitioner did
assign, as cash bond for the monetary award in favor of respondent in
LSED Case NO. RO700-2003-CI-09, the amount of P203,726.30 covered
by petitioner’s PSD Account No. 010-8-00038-4 with the Queen City
Development Bank at Sanciangko St. Cebu City, with the depositary bank
authorized to remit the amount to, and upon withdrawal by respondent and
or the Department of Labor and Employment Regional Office VII, on the
basis of the proper writ of execution. The Court finds that the Deed of
Assignment constitutes substantial compliance with the bond requirement.
The purpose of an appeal bond is to ensure, during the period of appeal,
against any occurrence that would defeat or diminish recovery by the
aggrieved employees under the judgment if subsequently affirmed.40 The
Deed of Assignment in the instant case, like a cash or surety bond, serves
the same purpose. First, the Deed of Assignment constitutes not just a
partial amount, but rather the entire award in the appealed Order. Second,
it is clear from the Deed of Assignment that the entire amount is under the
full control of the bank, and not of petitioner, and is in fact payable to the
DOLE Regional Office, to be withdrawn by the same office after it had
issued a writ of execution. For all intents and purposes, the Deed of
Assignment in tandem with the Letter Agreement and Cash Voucher is as
good as cash. Third, the Court finds that the execution of the Deed of
Assignment, the Letter Agreement and the Cash Voucher were made in
good faith, and constituted clear manifestation of petitioner’s willingness to
pay the judgment amount.
The Deed of Assignment must be distinguished from the type of bank
certification submitted by appellants in Cordova v. Keysa’s Boutique,
41 wherein this Court found that such bank certification did not come close
to the cash or surety bond required by law. The bank certification in
Cordova merely stated that the employer maintains a depository account
with a balance of P23,008.19, and that the certification was issued upon the
depositor’s request for whatever legal purposes it may serve. There was no
indication that the said deposit was made specifically for the pending
appeal, as in the instant case. Thus, the Court ruled that the bank
certification had not in any way ensured that the award would be paid
should the appeal fail. Neither was the appellee in the case prevented from
Page 20 of 52 | LABREL – 4E | FT CASES B1
judgment.42
V.
Another question of technicality was posed against the instant petition in
the hope that it would not be given due course. Respondent asserts that
petitioner pursued the wrong mode of appeal and thus the instant petition
must be dismissed.1avvphi1.zw+ Once more, the Court is not convinced.
A petition for certiorari is the proper remedy when any tribunal, board or
officer exercising judicial or quasi-judicial functions has acted without or in
excess of its jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction and there is no appeal, nor any plain speedy,
and adequate remedy at law. There is "grave abuse of discretion" when
respondent acts in a capricious or whimsical manner in the exercise of its
judgment as to be equivalent to lack of jurisdiction.43
Respondent may have a point in asserting that in this case a Rule 65
petition is a wrong mode of appeal, as indeed the writ of certiorari is an
extraordinary remedy, and certiorari jurisdiction is not to be equated with
appellate jurisdiction. Nevertheless, it is settled, as a general proposition,
that the availability of an appeal does not foreclose recourse to the
extraordinary remedies, such as certiorari and prohibition, where appeal is
not adequate or equally beneficial, speedy and sufficient, as where the
orders of the trial court were issued in excess of or without jurisdiction, or
there is need to promptly relieve the aggrieved party from the injurious
effects of the acts of an inferior court or tribunal, e.g., the court has
authorized execution of the judgment.44 This Court has even recognized
that a recourse to certiorari is proper not only where there is a clear
deprivation of petitioner’s fundamental right to due process, but so also
where other special circumstances warrant immediate and more direct
action.45
In one case, it was held that the extraordinary writ of certiorari will lie if it is
satisfactorily established that the tribunal acted capriciously and
whimsically in total disregard of evidence material to or even decisive of the
controversy,46and if it is shown that the refusal to allow a Rule 65 petition
would result in the infliction of an injustice on a party by a judgment that
evidently was rendered whimsically and capriciously, ignoring and
disregarding uncontroverted facts and familiar legal principles without any
valid cause whatsoever.47
It must be remembered that a wide breadth of discretion is granted a court
of justice in certiorari proceedings.48 The Court has not too infrequently
given due course to a petition for certiorari, even when the proper remedy
would have been an appeal, where valid and compelling considerations
would warrant such a recourse.49 Moreover, the Court allowed a Rule 65
 Page 21 of 52 | LABREL – 4E | FT CASES B1

petition, despite the availability of plain, speedy or adequate remedy, in respondent has never been petitioner’s employee. But the DOLE did not
view of the importance of the issues raised address, while the Court of Appeals glossed over, the issue. The
peremptory dismissal of the instant petition on a technicality would deprive
therein.50 The rules were also relaxed by the Court after considering the
the Court of the opportunity to resolve the novel controversy.1avvphi1
public interest involved in the case;51 when public welfare and the
advancement of public policy dictates; when the broader interest of justice WHEREFORE, the petition is GRANTED. The Decision dated 26 October
so requires; when the writs issued are null and void; or when the 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in
questioned order amounts to an oppressive exercise of judicial authority.52 C.A. G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE. The Order
of the then Acting Secretary of the Department of Labor and Employment
"The peculiar circumstances of this case warrant, as we held in Republic v.
dated 27 January 2005 denying petitioner’s appeal, and the Orders of the
Court of Appeals, 107 SCRA 504, 524, the ‘exercise once more of our
Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27
exclusive prerogative to suspend our own rules or to exempt a particular
February 2004, respectively, are ANNULLED. The complaint against
case from its operation as in x x Republic of the Philippines v. Court of
petitioner is DISMISSED.
Appeals, et al., (83 SCRA 453, 478-480 [1978]), thus: ‘ x x The Rules have
been drafted with the primary objective of enhancing fair trials and SO ORDERED.
expediting justice. As a corollary, if their applications and operation tend to
subvert and defeat instead of promote and enhance it, their suspension is
justified."53
The Regional Director fully relied on the self-serving allegations of
respondent and misinterpreted the documents presented as evidence by
respondent. To make matters worse, DOLE denied petitioner’s appeal
based solely on petitioner’s alleged failure to file a cash or surety bond,
without any discussion on the merits of the case. Since the petition for
certiorari before the Court of Appeals sought the reversal of the two
aforesaid orders, the appellate court necessarily had to examine the
evidence anew to determine whether the conclusions of the DOLE were
supported by the evidence presented. It appears, however, that the Court of
Appeals did not even review the assailed orders and focused instead on a
general discussion of due process and the jurisdiction of the Regional
Director. Had the appellate court truly reviewed the records of the case, it
would have seen that there existed valid and sufficient grounds for finding
grave abuse of discretion on the part of the DOLE Secretary as well the
Regional Director. In ruling and acting as it did, the Court finds that the
Court of Appeals may be properly subjected to its certiorari jurisdiction.
After all, this Court has previously ruled that the extraordinary writ of
certiorari will lie if it is satisfactorily1avvphi1
established that the tribunal had acted capriciously and whimsically in total
disregard of evidence material to or even decisive of the controversy.54
The most important consideration for the allowance of the instant petition is
the opportunity for the Court not only to set the demarcation between the
NLRC’s jurisdiction and the DOLE’s prerogative but also the procedure
when the case involves the fundamental challenge on the DOLE’s
prerogative based on lack of employer-employee relationship. As
exhaustively discussed here, the DOLE’s prerogative hinges on the
existence of employer-employee relationship, the issue is which is at the
very heart of this case. And the evidence clearly indicates private

G.R. No. 87530 June 13, 1990
GERONIMO SADOL, petitioner, 

vs.

PILIPINAS KAO, INC., REQUITO VEGA, BELEN GOMEZ, ARTURO
GOMEZ & NLRC SECOND DIVISION, respondents.
Oliver A. Luproso for petitioner.
Cayetano W. Paderanga for private respondent.
GANCAYCO, J.:
The issue posed in this case is whether or not a party who failed to appeal
from a decision of the labor arbiter to the National Labor Relations
Commission (NLRC) within the ten (10) day reglementary period can still
participate in a separate appeal timely interposed by the adverse party by
filing a motion for reconsideration of a decision of the NLRC on such
appeal.
Petitioner was recruited as a laborer by private respondents Requito Vega,
Antonio Gomez and Belen Gomez, who are the owners of Vega & Co., a
private recruitment agency, with assignment at respondent Pilipinas Kao,
Inc. (PKI for brevity), particularly at the Pit Burning area. Sometime on April
16, 1984, he was allegedly summarily dismissed. Hence, on July 24, 1986,
he filed a complaint for reinstatement and backwages with Region X of the
Department of Labor and Employment in Cagayan de Oro City.
On November 13, 1986, the labor arbiter ordered all parties to submit their
position papers. Only petitioner complied. On December 17, 1986,
petitioner filed an urgent motion that the failure of respondent to file their
position papers is a waiver and so judgment should be rendered in favor of
petitioner. Similar motions were filed by petitioner on January 23, 1987 and
May 15, 1987.
On June 26, 1987, the labor arbiter rendered a decision ordering private
respondents to jointly and solidarity pay petitioner his separation pay
computed at one month for every year of service within the reglementary
period. Petitioner appealed to the NLRC. Said respondents also appealed
but it was filed out of time.
On August 26, 1988, the Second Division of the NLRC promulgated a
decision modifying the appealed decision in that respondent PKI was
ordered to reinstate petitioner to his former position without loss of seniority
rights and other accrued benefits and with full backwages from the time of
dismissal up to his actual reinstatement, and in case reinstatement is
impossible, payment of full backwages and separation pay of one (1) month
salary for every year of service. The appeal of respondent Pig was
dismissed for having been filed out of time.
Page 22 of 52 | LABREL – 4E | FT CASES B1
The PKI allegedly received a copy of the decision of the NLRC only on
September 13, 1988. A motion for reconsideration of said decision dated
September 22, 1988 was filed by said respondent and a similar motion was
filed by Samahang Kabuhayan ng Barangay Luz Banzon (SKLB for brevity)
to which an opposition was filed by petitioner.
On September 30, 1988, a resolution was promulgated by the same
division of the NLRC, setting aside its decision and dismissing the case for
lack of merit. A motion for reconsideration thereof filed by petitioner who
besides questioning its findings of facts raised the issue that said
respondent's appeal having been filed out of time its motion for
reconsideration of the decision should not have been entertained as it
raised issues for the first on appeal which were not raised before the labor
arbiter. This motion was denied on November 27, 1988.
Hence, the herein petition for certiorari wherein petitioner recites the
following assignment of errors:
I
THE HONORABLE COMMISSION, SECOND DIVISION,
SERIOUSLY ERRED IN FINDING THAT RESPONDENTS
REQUITO VEGA, ARTURO GOMEZ AND BELEN GOMEZ
IS A LAWFUL INDEPENDENT LABOR CONTRACTOR;
II
THE HONORABLE COMMISSION, SECOND DIVISION,
SERIOUSLY ERRED IN FINDING IN ITS RESOLUTION
THAT COMPLAINANT-APPELLANT VOLUNTARILY
ABANDONED HIS JOB;
III
THE HONORABLE COMMISSION, SECOND DIVISION,
SERIOUSLY ERRED AND/OR COMMITTED GRAVE
ABUSE OF DISCRETION IN GIVING DUE COURSE AND/
O R E N T E RTA I N I N G T H E M O T I O N F O R
RECONSIDERATION FILED BY RESPONDENT-
APPELLANTS AND REVERSING ITS OWN DECISION/
RESOLUTION DATED AUGUST 26, 1988;
IV
THE HONORABLE COMMISSION, SECOND DIVISION,
SERIOUSLY ERRED IN FAILING TO GIVE DUE
CONSIDERATION OF COMPLAINANT-APPELLANT'S
OPPOSITION TO MOTION FOR RECONSIDERATION
DATED SEPTEMBER 27, 1988. 1
The third and fourth assignment of errors shall first be resolved.

There is no question that private respondents failed to file a timely appeal
from the derision of the labor arbiter while the petitioner was able to
interpose his appeal within the reglementary period. It is also an accepted
postulate that issues not raised in the lower court or the labor arbiter may
not be raised for the first time on appeal.
Note is taken of the fact that even the Solicitor General refused to represent
the NLRC in this proceeding as it shares the view of petitioner that the
decision of the labor arbiter having become final by the failure to
respondent PKI to appeal on time the NLRC may no longer amend, modify,
much less set aside the same. 2
This posture is correct insofar as respondent PKI is concerned. However,
as petitioner had filed a timely appeal the NLRC had jurisdiction to give due
se to his appeal and render the decision of August 28, 1988, a copy of
which was furnished respondents. Having lost the right to appeal can
respondent PKI file a motion for reconsideration of said decision? The
Court resolves the question in the affirmative. The rules of technicality must
yield to the broader interest of justice. It is only by giving due course to the
motion for reconsideration that was timely filed that the NLRC may be able,
to equitably evaluate the conflicting versions of facts presented by the
parties.
In the now questioned resolution of the NLRC dated September 30,1988,
the following findings and conclusions were made:
Respondent SKLB assails the finding of the Commission
that it is engaged in labor-only contracting. In support
thereof, respondent submitted a Clearance Certificate
issued by the Department of Labor and Employment,
Regional Office No. 10 situated in Cagayan de Oro City,
certifying to its being cleared for issuance of a permit as a
labor contractor. It also submitted payrolls showing that it
indeed operated as such independent labor contractor in
accordance with Article 106 of the Labor Code.
Attached to respondent SKLB's motion likewise is the joint
affidavit of one Mario T. Ecarnum and Benito U. Ecarnum
who jointly stated that they were neighbors and co-
workers of the complainant in the pit burning area, in a
work contracted by aforesaid respondent with respondent
Pilipinas Kao, Inc.; that complainant abandoned his work
starting April 19,1984 when he went to Manila to apply for
work abroad and it wall only about eight (8) months later
that he returned when he failed to secure an overseas
employment; that complainant's prolonged absence was
without prior permission or leave of absence.
Respondent SKLB further contends that it meets all
requirements set by law and jurisprudence pertaining to an
Page 23 of 52 | LABREL – 4E | FT CASES B1
independent labor contractor, citing the case of Vda. de
Eustaquio vs. Workmen's Compensation Commission, 97
SCRA 255, thus:
An independent contractor is one who, in
rendering services, exercise an
independent employment or occupation
and represents the will of his employer
only as to the results of his work; and who
is engaged to perform a certain service to
another according to his own manner and
methods, free from control and direction of
his employer in all matters connected with
the performance of the service, except as
to the result of the work.
To further buttress respondent SKLB's claim of being an
independent labor contractor and employer of complainant,
it submitted a copy of a Memorandum dated April 21, 1984
sent to complainant requiring the latter to report to its office
immediately otherwise he would be deemed to have
abandoned his work.
It does strike Us as odd that if indeed complainant was
dismissed sometime in April 1984 it took him almost three
(3) years before filing the instant case for illegal dismissal .
This circumstance adds a significant dimension to
respondent's position that indeed complainant abandoned
his job to look for greener pastures and it was only when
he failed to find such opportunity that he came back to
demand that he be allowed to resume the employment
which he unceremoniously abandoned.
All the foregoing undisputed taken together, preponderate
in favor of respondent SKLB's claim of being a lawful
independent labor contractor which employed complainant
who unjustifiably abandoned his employment.
WHEREFORE, the derision sought to be reconsidered is
hereby SET ASIDE and a new one entered, dismissing the
case for lack of merit. 3
The factual findings of the NLRC are conclusive on this Court because the
same appear to be supported by substantial evidence.
WHEREFORE, the petition is DISMISSED for lack of merit. No costs.
SO ORDERED.

G.R. No. 152494 September 22, 2004
MARIANO ONG, doing business under the name and style
MILESTONE METAL MANUFACTURING, petitioner,
 Petitioner filed with the NLRC a notice of appeal with a memorandum of
vs.
 appeal and paid the docket fees therefor. However, instead of posting the
THE COURT OF APPEALS, CONRADO DABAC, BERNABE TAYACTAC,
MANUEL ABEJUELLA, LOLITO ABELONG, RONNIE HERRERO,
APOLLO PAMIAS, JAIME ONGUTAN, NOEL ATENDIDO, CARLOS
TABBAL, JOEL ATENDIDO, BIENVENIDO EBBER, RENATO
ABEJUELLA, LEONILO ATENDIDO, JR., LODULADO FAA and JAIME
LOZADA, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the decision1 of the Court
of Appeals in CA-G.R. SP No. 62129, dated October 10, 2001, which
dismissed the petition for certiorari for lack of merit, as well as the
resolution,2 dated March 7, 2002, denying the motion for reconsideration.
Petitioner is the sole proprietor of Milestone Metal Manufacturing
(Milestone), which manufactures, among others, wearing apparels, belts,
and umbrellas.3 Sometime in May 1998, the business suffered very low
sales and productivity because of the economic crisis in the country.
Hence, it adopted a rotation scheme by reducing the workdays of its
employees to three days a week or less for an indefinite period.4
On separate dates, the 15 respondents filed before the National Labor
Relations Commission (NLRC) complaints for illegal dismissal,
underpayment of wages, non-payment of overtime pay, holiday pay, service
incentive leave pay, 13th month pay, damages, and attorney’s fees against
petitioner. These were consolidated and assigned to Labor Arbiter Manuel
Manasala.
Petitioner claimed that 9 of the 15 respondents were not employees of
Milestone but of Protone Industrial Corporation which, however, stopped its
operation due to business losses. Further, he claims that respondents
Manuel Abuela, Lolita Abelong, Ronnie Herrero, Carlos Tabbal, Conrado
Dabac, and Lodualdo Faa were not dismissed from employment; rather,
they refused to work after the rotation scheme was adopted. Anent their
monetary claims, petitioner presented documents showing that he paid
respondents’ minimum wage, 13th month pay, holiday pay, and
contributions to the SSS, Medicare, and Pag-Ibig Funds.5
On November 25, 1999, the Labor Arbiter rendered a decision awarding to
the respondents the aggregate amount of P1,111,200.40 representing their
wage differential, holiday pay, service incentive leave pay and 13th month
pay, plus 10% thereof as attorney’s fees. Further, petitioner was ordered to
pay the respondents separation pay equivalent to ½ month salary for every
Page 24 of 52 | LABREL – 4E | FT CASES B1
year of service due to the indefiniteness of the rotation scheme and
strained relations caused by the filing of the complaints.6
required cash or surety bond, he filed a motion to reduce the appeal bond.
The NLRC, in a resolution dated April 28, 2000, denied the motion to
reduce bond and dismissed the appeal for failure to post cash or surety
bond within the reglementary period. 7 Petitioner ’s motion for
reconsideration was likewise denied.8
Petitioner filed a petition for certiorari with the Court of Appeals alleging that
the NLRC acted with grave abuse of discretion in dismissing the appeal for
non-perfection of appeal although a motion to reduce appeal bond was
seasonably filed. However, the petition was dismissed and thereafter the
motion for reconsideration was likewise dismissed for lack of merit.9
Hence, this petition for review on the following assignment of errors:
I.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
AFFIRMING THE DECISION OF THE NLRC DISMISSING THE
APPEAL OF PETITIONERS (sic) FOR NON-PERFECTION WHEN
A MOTION TO REDUCE APPEAL BOND WAS SEASONABLY
FILED WHICH IS ALLOWED BY THE RULES OF PROCEDURE
OF THE NLRC.
II.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR AND GRAVE ABUSE OF DISCRETION IN
AFFIRMING THE DISMISSAL BY NLRC OF PETITIONER’S
APPEAL AND IN EFFECT UPHOLDING THE ERRONEOUS
DECISION OF THE LABOR ARBITER AWARDING SEPARATION
PAY TO PRIVATE RESPONDENTS DESPITE THE FINDING THAT
THERE WAS NO ILLEGAL DISMISSAL MADE BY MILESTONE.
III.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRC’S DISMISSAL OF
PETITIONER’S APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT
PETITIONER MILESTONE HAS VIOLATED THE MINIMUM WAGE
LAW AND THAT PRIVATE RESPONDENTS WERE UNDERPAID.
IV.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRC’S DISMISSAL OF

PETITIONER’S APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT
P E T I T I O N E R M I L E S TO N E H A S N O T PA I D P R I VAT E
RESPONDENTS THEIR SERVICE INCENTIVE LEAVE PAY, 13th
MONTH PAY, AND HOLIDAY PAY.
V.
PUBLIC RESPONDENT COURT OF APPEALS COMMITTED
SERIOUS ERROR IN AFFIRMING THE NLRC’S DISMISSAL OF
PETITIONER’S APPEAL AND IN EFFECT UPHOLDING THE
ERRONEOUS DECISION OF THE LABOR ARBITER THAT THE
EVIDENCE SUBMITTED BY PRIVATE RESPONDENTS IN
SUPPORT OF THEIR CLAIMS ARE NOT SELF-SERVING,
IRRELEVANT AND IMMATERIAL TO THE FACTS AND LAW IN
ISSUE IN THIS CASE.10
The petition lacks merit.
Time and again it has been held that the right to appeal is not a natural
right or a part of due process, it is merely a statutory privilege, and may be
exercised only in the manner and in accordance with the provisions of law.
The party who seeks to avail of the same must comply with the
requirements of the rules. Failing to do so, the right to appeal is lost.11
Article 223 of the Labor Code, as amended, sets forth the rules on appeal
from the Labor Arbiter’s monetary award:
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. x x x.
xxx xxx xxx
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. (Emphasis ours)
The pertinent provisions of Rule VI of the New Rules of Procedure of the
NLRC,12 which were in effect when petitioner filed his appeal, provide:
Section 1. Periods of Appeal. – Decisions, awards or orders of the
Labor Arbiter and the POEA Administrator shall be 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 of the Labor Arbiter x x x.
xxx xxx xxx
Page 25 of 52 | LABREL – 4E | FT CASES B1
Section 3. Requisites for Perfection of Appeal. – (a) The appeal
shall be filed within the reglementary period as provided in Section
1 of this Rule; shall be under oath with proof of payment of the
required appeal fee and the posting of a cash or surety bond as
provided in Section 5 of this Rule; shall be accompanied by a
memorandum of appeal which shall state the grounds relied upon
and the arguments in support thereof; the relief prayed for; and a
statement of the date when the appellant received the appealed
decision, order or award and proof of service on the other party of
such appeal.
A mere notice of appeal without complying with the other requisite
aforestated shall not stop the running of the period for perfecting an
appeal.
xxx xxx xxx
Section 6. Bond. – In case the decision of the Labor Arbiter, the
Regional Director or his duly authorized Hearing Officer involves a
monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond,
which shall be in effect until final disposition of the case, issued by
a reputable bonding company duly accredited by the Commission
or the Supreme Court in an amount equivalent to the monetary
award, exclusive of damages and attorney’s fees.
The employer, his counsel, as well as the bonding company, shall submit a
joint declaration under oath attesting that the surety bond posted is
genuine.
The Commission may, in justifiable cases and upon Motion of the
Appellant, reduce the amount of the bond. The filing of the motion
to reduce bond shall not stop the running of the period to perfect
appeal. (Emphasis ours)
In the case at bar, petitioner received the decision of the Labor Arbiter on
January 6, 2000. He filed his notice of appeal with memorandum of appeal
and paid the corresponding appeal fees on January 17, 2000, the last day
of filing the appeal. However, in lieu of the required cash or surety bond, he
filed a motion to reduce bond alleging that the amount of P1,427,802,04 as
bond is "unjustified and prohibitive" and prayed that the same be reduced
to a "reasonable level." The NLRC denied the motion and consequently
dismissed the appeal for non-perfection. Petitioner now contends that he
was deprived of the chance to post bond because the NLRC took 102 days
to decide his motion.
Petitioner’s argument is unavailing.
While, Section 6, Rule VI of the NLRC’s New Rules of Procedure allows the
Commission to reduce the amount of the bond, the exercise of the authority
is not a matter of right on the part of the movant but lies within the sound

discretion of the NLRC upon showing of meritorious grounds.13 Petitioner’s
motion reads:
1. The appeal bond which respondents-appellants will post in this
case is P1,427,802.04. They are precisely questioning this amount
as being unjustified and prohibitive under the premises.
2. The amount of this appeal bond must be reduced to a
reasonable level by this Honorable Office.
WHEREFORE, in view thereof, it is respectfully prayed of this
Honorable Office that the appeal bond of P1,427,802.04 be
reduced.14
After careful scrutiny of the motion to reduce appeal bond, we agree with
the Court of Appeals that the NLRC did not act with grave abuse of
discretion when it denied petitioner’s motion for the same failed to either
elucidate why the amount of the bond was "unjustified and prohibitive" or to
indicate what would be a "reasonable level."15
In Calabash Garments, Inc. v. NLRC,16 it was held that "a substantial
monetary award, even if it runs into millions, does not necessarily give the
employer-appellant a "meritorious case" and does not automatically warrant
a reduction of the appeal bond."
Even granting arguendo that petitioner has meritorious grounds to reduce
the appeal bond, the result would have been the same since he failed to
post cash or surety bond within the prescribed period.
The above-cited provisions explicitly provide that an appeal from the Labor
Arbiter to the NLRC must be perfected within ten calendar days from
receipt of such decisions, awards or orders of the Labor Arbiter. In a
judgment involving a monetary award, the appeal shall be perfected only
upon (1) proof of payment of the required appeal fee; (2) posting of a cash
or surety bond issued by a reputable bonding company; and (3) filing of a
memorandum of appeal. A mere notice of appeal without complying with
the other requisites mentioned shall not stop the running of the period for
perfection of appeal.17 The posting of cash or surety bond is not only
mandatory but jurisdictional as well, and non-compliance therewith is fatal
and has the effect of rendering the judgment final and executory.18 This
requirement is intended to discourage employers from using the appeal to
delay, or even evade, their obligation to satisfy their employee’s just and
lawful claims.19
The intention of the lawmakers to make the bond an indispensable requisite
for the perfection of an appeal by the employer is underscored by the
provision that an appeal by the employer may be perfected only upon the
posting of a cash or surety bond. The word "only" makes it perfectly clear
that the lawmakers intended the posting of a cash or surety bond by the
employer to be the exclusive means by which an employer’s appeal may
be perfected.20
Page 26 of 52 | LABREL – 4E | FT CASES B1
The fact that the NLRC took 102 days to resolve the motion will not help
petitioner’s case. The NLRC Rules clearly provide that "the filing of the
motion to reduce bond shall not stop the running of the period to perfect
appeal."Petitioner should have seasonably filed the appeal bond within the
ten-day reglementary period following the receipt of the order, resolution or
decision of the NLRC to forestall the finality of such order, resolution or
decision. In the alternative, he should have paid only a moderate and
reasonable sum for the premium, as was held in Biogenerics Marketing and
Research Corporation v. NLRC,21 to wit:
x x x The mandatory filing of a bond for the perfection of an appeal
is evident from the aforequoted provision that the appeal may be
perfected only upon the posting of cash or surety bond. It is not an
excuse that the over P2 million award is too much for a small
business enterprise, like the petitioner company, to shoulder. The
law does not require its outright payment, but only the posting
of a bond to ensure that the award will be eventually paid
should the appeal fail. What petitioners have to pay is a
moderate and reasonable sum for the premium for such
bond. (Emphasis ours)
While the bond requirement on appeals involving monetary awards has
been relaxed in certain cases, this can only be done where there was
substantial compliance of the Rules or where the appellants, at the very
least, exhibited willingness to pay by posting a partial bond.22 Petitioner’s
reliance on the case of Rosewood Processing, Inc. v. NLRC23 is misplaced.
Petitioner in the said case substantially complied with the rules by posting a
partial surety bond of fifty thousand pesos issued by Prudential Guarantee
and Assurance, Inc. while his motion to reduce appeal bond was pending
before the NLRC.
In the case at bar, petitioner did not post a full or partial appeal bond within
the prescribed period, thus, no appeal was perfected from the decision of
the Labor Arbiter. For this reason, the decision sought to be appealed to the
NLRC had become final and executory and therefore immutable. Clearly,
then, the NLRC has no authority to entertain the appeal, much less to
reverse the decision of the Labor Arbiter. Any amendment or alteration
made which substantially affects the final and executory judgment is null
and void for lack of jurisdiction, including the entire proceeding held for that
purpose.24
WHEREFORE, in view of the foregoing, the petition is DENIED. The
assailed decision of the Court of Appeals in CA-G.R. SP No. 62129, dated
October 10, 2001, dismissing the petition for certiorari for lack of merit,
is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17,
2013
ANDREW JAMES MCBURNIE, Petitioner, 
 In a Decision6 dated September 30, 2004, the LA declared McBurnie as
vs.
 having been illegally dismissed from employment, and thus entitled to
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON,
INC., Respondents.
RESOLUTION
REYES, J.:
For resolution are the –
(1) third motion for reconsideration1 filed by Eulalio Ganzon
(Ganzon), EGI-Managers, Inc. (EGI) and E. Ganzon, Inc.
(respondents) on March 27, 2012, seeking a reconsideration of the
Court’s Decision2 dated September 18, 2009 that ordered the
dismissal of their appeal to the National Labor Relations
Commission (NLRC) for failure to post additional appeal bond in
the amount of P54,083,910.00; and
(2) motion for reconsideration3 filed by petitioner Andrew James
McBurnie (McBurnie) on September 26, 2012, assailing the Court
en banc’s Resolution4 dated September 4, 2012 that (1) accepted
the case from the Court’s Third Division and (2) enjoined the
implementation of the Labor Arbiter’s (LA) decision finding him to
be illegally dismissed by the respondents.
Antecedent Facts
The Decision dated September 18, 2009 provides the following antecedent
facts and proceedings –
On October 4, 2002, McBurnie, an Australian national, instituted a
complaint for illegal dismissal and other monetary claims against the
respondents. McBurnie claimed that on May 11, 1999, he signed a five-year
employment agreement5 with the company EGI as an Executive Vice-
President who shall oversee the management of the company’s hotels and
resorts within the Philippines. He performed work for the company until
sometime in November 1999, when he figured in an accident that
compelled him to go back to Australia while recuperating from his injuries.
While in Australia, he was informed by respondent Ganzon that his services
were no longer needed because their intended project would no longer
push through.
The respondents opposed the complaint, contending that their agreement
with McBurnie was to jointly invest in and establish a company for the
management of hotels. They did not intend to create an employer-
employee relationship, and the execution of the employment contract that
was being invoked by McBurnie was solely for the purpose of allowing
McBurnie to obtain an alien work permit in the Philippines. At the time
Page 27 of 52 | LABREL – 4E | FT CASES B1
McBurnie left for Australia for his medical treatment, he had not yet
obtained a work permit.
receive from the respondents the following amounts: (a) US$985,162.00 as
salary and benefits for the unexpired term of their employment contract,
(b) P2,000,000.00 as moral and exemplary damages, and (c) attorney’s
fees equivalent to 10% of the total monetary award.
Feeling aggrieved, the respondents appealed the LA’s Decision to the
NLRC.7 On November 5, 2004, they filed their Memorandum of
Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in the
amount of P100,000.00. The respondents contended in their Motion to
Reduce Bond, inter alia, that the monetary awards of the LA were null and
excessive, allegedly with the intention of rendering them incapable of
posting the necessary appeal bond. They claimed that an award of "more
than P60 Million Pesos to a single foreigner who had no work permit and
who left the country for good one month after the purported
commencement of his employment" was a patent nullity.10Furthermore,
they claimed that because of their business losses that may be attributed to
an economic crisis, they lacked the capacity to pay the bond of almost P60
Million, or even the millions of pesos in premium required for such bond.
On March 31, 2005, the NLRC denied11 the motion to reduce bond,
explaining that "in cases involving monetary award, an employer seeking to
appeal the [LA’s] decision to the Commission is unconditionally required by
Art. 223, Labor Code to post bond in the amount equivalent to the monetary
award x x x."12 Thus, the NLRC required from the respondents the posting
of an additional bond in the amount of P54,083,910.00.
When their motion for reconsideration was denied,13 the respondents
decided to elevate the matter to the Court of Appeals (CA) via the Petition
for Certiorari and Prohibition (With Extremely Urgent Prayer for the
Issuance of a Preliminary Injunction and/or Temporary Restraining
Order)14 docketed as CA-G.R. SP No. 90845.
In the meantime, in view of the respondents’ failure to post the required
additional bond, the NLRC dismissed their appeal in a Resolution15 dated
March 8, 2006. The respondents’ motion for reconsideration was denied on
June 30, 2006.16 This prompted the respondents to file with the CA the
Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of a
Te m p o r a r y R e s t r a i n i n g O r d e r a n d a W r i t o f P r e l i m i n a r y
Injunction)17 docketed as CA-G.R. SP No. 95916, which was later
consolidated with CA-G.R. SP No. 90845.
CA-G.R. SP Nos. 90845 and 95916
On February 16, 2007, the CA issued a Resolution18 granting the
respondents’ application for a writ of preliminary injunction. It directed the

NLRC, McBurnie, and all persons acting for and under their authority to
refrain from causing the execution and enforcement of the LA’s decision in
favor of McBurnie, conditioned upon the respondents’ posting of a bond in
the amount of P10,000,000.00. McBurnie sought reconsideration of the
issuance of the writ of preliminary injunction, but this was denied by the CA
in its Resolution19 dated May 29, 2007.
McBurnie then filed with the Court a Petition for Review on
Certiorari20 docketed as G.R. Nos. 178034 and 178117, assailing the CA
Resolutions that granted the respondents’ application for the injunctive writ.
On July 4, 2007, the Court denied the petition on the ground of McBurnie’s
failure to comply with the 2004 Rules on Notarial Practice and to sufficiently
show that the CA committed any reversible error.21 A motion for
reconsideration was denied with finality in a Resolution22 dated October 8,
2007.
Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental
Motion for Reconsideration and (2) To Admit the Attached Supplemental
Motion for Reconsideration,23 which was treated by the Court as a second
motion for reconsideration, a prohibited pleading under Section 2, Rule 56
of the Rules of Court. Thus, the motion for leave was denied by the Court in
a Resolution24 dated November 26, 2007. The Court’s Resolution dated
July 4, 2007 then became final and executory on November 13, 2007;
accordingly, entry of judgment was made in G.R. Nos. 178034 and
178117.25
In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and
CA-G.R. SP No. 95916 and rendered its Decision26 dated October 27,
2008, allowing the respondents’ motion to reduce appeal bond and
directing the NLRC to give due course to their appeal. The dispositive
portion of the CA Decision reads:
WHEREFORE, in view of the foregoing, the petition for certiorari and
prohibition docketed as CA GR SP No. 90845 and the petition for certiorari
docketed as CA GR SP No. 95916 are GRANTED. Petitioners’ Motion to
Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to
post appeal bond in the amount of P10,000,000.00. The NLRC is hereby
DIRECTED to give due course to petitioners’ appeal in CA GR SP No.
95916 which is ordered remanded to the NLRC for further proceedings.
SO ORDERED.27
On the issue28 of the NLRC’s denial of the respondents’ motion to reduce
appeal bond, the CA ruled that the NLRC committed grave abuse of
discretion in immediately denying the motion without fixing an appeal bond
in an amount that was reasonable, as it denied the respondents of their
right to appeal from the decision of the LA.29 The CA explained that "(w)hile
Art. 223 of the Labor Code requiring bond equivalent to the monetary
award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as
amended, recognized as exception a motion to reduce bond upon
Page 28 of 52 | LABREL – 4E | FT CASES B1
meritorious grounds and upon posting of a bond in a reasonable amount in
relation to the monetary award."30
On the issue31 of the NLRC’s dismissal of the appeal on the ground of the
respondents’ failure to post the additional appeal bond, the CA also found
grave abuse of discretion on the part of the NLRC, explaining that an
appeal bond in the amount of P54,083,910.00 was prohibitive and
excessive. Moreover, the appellate court cited the pendency of the petition
for certiorari over the denial of the motion to reduce bond, which should
have prevented the NLRC from immediately dismissing the respondents’
appeal.32
Undeterred, McBurnie filed a motion for reconsideration. At the same time,
the respondents moved that the appeal be resolved on the merits by the
CA. On March 3, 2009, the CA issued a Resolution33 denying both motions.
McBurnie then filed with the Court the Petition for Review on
Certiorari34 docketed as G.R. Nos. 186984-85.
In the meantime, the NLRC, acting on the CA’s order of remand, accepted
the appeal from the LA’s decision, and in its Decision35 dated November 17,
2009, reversed and set aside the Decision of the LA, and entered a new
one dismissing McBurnie’s complaint. It explained that based on records,
McBurnie was never an employee of any of the respondents, but a potential
investor in a project that included said respondents, barring a claim of
dismissal, much less, an illegal dismissal. Granting that there was a
contract of employment executed by the parties, McBurnie failed to obtain a
work permit which would have allowed him to work for any of the
respondents.36 In the absence of such permit, the employment agreement
was void and thus, could not be the source of any right or obligation.
Court Decision dated September 18, 2009
On September 18, 2009, the Third Division of this Court rendered its
Decision37 which reversed the CA Decision dated October 27, 2008 and
Resolution dated March 3, 2009. The dispositive portion reads:
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals in CA-G.R. SP Nos. 90845 and 95916 dated October 27, 2008
granting respondents’ Motion to Reduce Appeal Bond and ordering the
National Labor Relations Commission to give due course to respondents’
appeal, and its March 3, 2009 Resolution denying petitioner’s motion for
reconsideration, are REVERSED and SET ASIDE. The March 8, 2006 and
June 30, 2006 Resolutions of the National Labor Relations Commission in
NLRC NCR CA NO. 042913-05 dismissing respondents’ appeal for failure
to perfect an appeal and denying their motion for reconsideration,
respectively, are REINSTATED and AFFIRMED.
SO ORDERED.38
The Court explained that the respondents’ failure to post a bond equivalent
in amount to the LA’s monetary award was fatal to the appeal.39 Although

an appeal bond may be reduced upon motion by an employer, the following
conditions must first be satisfied: (1) the motion to reduce bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant. Unless the NLRC grants the
motion to reduce the cash bond within the 10-day reglementary period to
perfect an appeal from a judgment of the LA, the employer is mandated to
post the cash or surety bond securing the full amount within the said 10-day
period.40 The respondents’ initial appeal bond of P100,000.00 was grossly
inadequate compared to the LA’s monetary award.
The respondents’ first motion for reconsideration41 was denied by the Court
for lack of merit via a Resolution42dated December 14, 2009.
Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the
NLRC a motion for reconsideration with motion to recall and expunge from
the records the NLRC Decision dated November 17, 2009.43 The motion
was granted by the NLRC in its Decision44 dated January 14, 2010.45
Undaunted by the denial of their first motion for reconsideration of the
Decision dated September 18, 2009, the respondents filed with the Court a
Motion for Leave to Submit Attached Second Motion for
Reconsideration46 and Second Motion for Reconsideration,47 which motion
for leave was granted in a Resolution48 dated March 15, 2010. McBurnie
was allowed to submit his comment on the second motion, and the
respondents, their reply to the comment. On January 25, 2012, however,
the Court issued a Resolution49 denying the second motion "for lack of
merit," "considering that a second motion for reconsideration is a prohibited
pleading x x x."50
The Court’s Decision dated September 18, 2009 became final and
executory on March 14, 2012. Thus, entry of judgment51 was made in due
course, as follows:
ENTRY OF JUDGMENT
This is to certify that on September 18, 2009 a decision rendered in the
above-entitled cases was filed in this Office, the dispositive part of which
reads as follows:
xxxx
and that the same has, on March 14, 2012 become final and executory and
is hereby recorded in the Book of Entries of Judgments.52
The Entry of Judgment indicated that the same was made for the Court’s
Decision rendered in G.R. Nos. 186984-85.
On March 27, 2012, the respondents filed a Motion for Leave to File
Attached Third Motion for Reconsideration, with an attached Motion for
Reconsideration (on the Honorable Court’s 25 January 2012 Resolution)
with Motion to Refer These Cases to the Honorable Court En Banc.53 The
third motion for reconsideration is founded on the following grounds:
Page 29 of 52 | LABREL – 4E | FT CASES B1
I.
THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE
COURT ACTUALLY GRANTED RESPONDENTS’ "MOTION FOR LEAVE
TO SUBMIT A SECOND MOTION FOR RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE
SUBSEQUENT 25 JANUARY 2012 RESOLUTION CANNOT DENY THE "
SECOND MOTION FOR RECONSIDERATION " ON THE GROUND THAT
IT IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY
CONTENDED THAT THERE ARE VERY PECULIAR CIRCUMSTANCES
AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT
CLEARLY JUSTIFY GIVING DUE COURSE TO RESPONDENTS’
"SECOND MOTION FOR RECONSIDERATION," WHICH ARE:
II.
THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE
WITH THE OCTOBER 27, 2008 DECISION OF THE COURT OF APPEALS
IS A SUBSTANTIAL AND SPECIAL MERITORIOUS CIRCUMSTANCE TO
MERIT RECONSIDERATION OF THIS APPEAL.
III.
THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES
THAT WITH RESPECT TO ARTICLE 223 OF THE LABOR CODE, THE
REQUIREMENTS OF THE LAW SHOULD BE GIVEN A LIBERAL
I N T E R P R E TAT I O N , E S P E C I A L LY I F T H E R E A R E S P E C I A L
MERITORIOUS CIRCUMSTANCES AND ISSUES.
IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS
MORE THAN P60 MILLION PESOS TO A SINGLE FOREIGNER WHO
HAD NO WORK PERMIT, AND NO WORKING VISA.
V.
PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR
RELATIONS COMMISSION (NLRC) IN HIS APPEAL HEREIN, MAKING
THE APPEAL INEFFECTIVE AGAINST THE NLRC.
VI.
NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE
IN ITS NOVEMBER 17, 2009 DECISION.
VII.
THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS
TAINTED WITH VERY SERIOUS IRREGULARITIES.
VIII.
GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED
IN THIS CASE.

IX.
THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER
VERY MERITORIOUS ARGUMENTS OF THE RESPONDENTS WHICH
ARE AS FOLLOWS:
(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS
BEFORE THE [LA] (WHEN 2 MISSED HEARINGS MEAN
DISMISSAL).
(B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF
LEISURE EXPERTS, INC., BUT NOT OF ANY OF THE
RESPONDENTS.
(C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR.
EULALIO GANZON CLEARLY SHOWS THAT HE WAS NOT
ILLEGALLY DISMISSED NOR EVEN DISMISSED BY ANY OF
THE RESPONDENTS AND PETITIONER EVEN PROMISED TO
PAY HIS DEBTS FOR ADVANCES MADE BY RESPONDENTS.
(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE
RESPONDENTS. PETITIONER PRESENTED WORK FOR
CORONADO BEACH RESORT WHICH IS [NEITHER] OWNED
NOR CONNECTED WITH ANY OF THE RESPONDENTS.
(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED
EVEN IF THERE WAS ABSOLUTELY NO EVIDENCE AT ALL
PRESENTED THAT PETITIONER WAS DISMISSED BY THE
RESPONDENTS.
(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST
2 M O N T H S A F T E R T H E S TA R T O F T H E A L L E G E D
EMPLOYMENT AGREEMENT, AND HAS STILL NOT RETURNED
TO THE PHILIPPINES AS CONFIRMED BY THE BUREAU OF
IMMIGRATION.
( G ) P E T I T I O N E R C O U L D N O T H AV E S I G N E D A N D
P E R S O N A L LY A P P E A R E D B E F O R E T H E N L R C
ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT
SHEET SINCE HE LEFT THE COUNTRY 3 YEARS BEFORE THE
COMPLAINT WAS FILED AND HE NEVER CAME BACK.54
O n S e p t e m b e r 4 , 2 0 1 2 , t h e C o u r t e n b a n c55 i s s u e d a
Resolution56 accepting the case from the Third Division. It also issued a
temporary restraining order (TRO) enjoining the implementation of the LA’s
Decision dated September 30, 2004. This prompted McBurnie’s filing of a
Motion for Reconsideration,57 where he invoked the fact that the Court’s
Decision dated September 18, 2009 had become final and executory, with
an entry of judgment already made by the Court.
Our Ruling
Page 30 of 52 | LABREL – 4E | FT CASES B1
In light of pertinent law and jurisprudence, and upon taking a second hard
look of the parties’ arguments and the records of the case, the Court has
ascertained that a reconsideration of this Court’s Decision dated
September 18, 2009 and Resolutions dated December 14, 2009 and
January 25, 2012, along with the lifting of the entry of judgment in G.R. No.
186984-85, is in order.
The Court’s acceptance of the
third motion for reconsideration
At the outset, the Court emphasizes that second and subsequent motions
for reconsideration are, as a general rule, prohibited. Section 2, Rule 52 of
the Rules of Court provides that "no second motion for reconsideration of a
judgment or final resolution by the same party shall be entertained." The
rule rests on the basic tenet of immutability of judgments. "At some point, a
decision becomes final and executory and, consequently, all litigations must
come to an end."58
The general rule, however, against second and subsequent motions for
reconsideration admits of settled exceptions. For one, the present Internal
Rules of the Supreme Court, particularly Section 3, Rule 15 thereof,
provides:
Sec. 3. Second motion for reconsideration. ― The Court shall not entertain
a second motion for reconsideration, and any exception to this rule can only
be granted in the higher interest of justice by the Court en banc upon a vote
of at least two-thirds of its actual membership. There is reconsideration "in
the higher interest of justice" when the assailed decision is not only legally
erroneous, but is likewise patently unjust and potentially capable of causing
unwarranted and irremediable injury or damage to the parties. A second
motion for reconsideration can only be entertained before the ruling sought
to be reconsidered becomes final by operation of law or by the Court’s
declaration.
x x x x (Emphasis ours)
In a line of cases, the Court has then entertained and granted second
motions for reconsideration "in the higher interest of substantial justice," as
allowed under the Internal Rules when the assailed decision is "legally
erroneous," "patently unjust" and "potentially capable of causing
unwarranted and irremediable injury or damage to the parties." In Tirazona
v. Philippine EDS Techno-Service, Inc. (PET, Inc.),59 we also explained that
a second motion for reconsideration may be allowed in instances of
"extraordinarily persuasive reasons and only after an express leave shall
have been obtained."60 In Apo Fruits Corporation v. Land Bank of the
Philippines,61 we allowed a second motion for reconsideration as the issue
involved therein was a matter of public interest, as it pertained to the proper
application of a basic constitutionally-guaranteed right in the government’s
implementation of its agrarian reform program. In San Miguel Corporation v.

NLRC,62 the Court set aside the decisions of the LA and the NLRC that
favored claimants-security guards upon the Court’s review of San Miguel
Corporation’s second motion for reconsideration. In Vir-Jen Shipping and
Marine Services, Inc. v. NLRC, et al.,63 the Court en banc reversed on a
third motion for reconsideration the ruling of the Court’s Division on therein
private respondents’ claim for wages and monetary benefits.
It is also recognized that in some instances, the prudent action towards a
just resolution of a case is for the Court to suspend rules of procedure, for
"the power of this Court to suspend its own rules or to except a particular
case from its operations whenever the purposes of justice require it, cannot
be questioned."64 In De Guzman v. Sandiganbayan,65 the Court, thus,
explained:
The rules of procedure should be viewed as mere tools designed to
facilitate the attainment of justice. Their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote
substantial justice, must always be avoided. Even the Rules of Court
envision this liberality. This power to suspend or even disregard the rules
can be so pervasive and encompassing so as to alter even that which this
Court itself has already declared to be final, as we are now compelled to do
in this case. x x x.
xxxx
The Rules of Court was conceived and promulgated to set forth guidelines
in the dispensation of justice but not to bind and chain the hand that
dispenses it, for otherwise, courts will be mere slaves to or robots of
technical rules, shorn of judicial discretion. That is precisely why courts in
rendering real justice have always been, as they in fact ought to be,
conscientiously guided by the norm that when on the balance, technicalities
take a backseat against substantive rights, and not the other way around.
Truly then, technicalities, in the appropriate language of Justice Makalintal,
"should give way to the realities of the situation." x x x.66 (Citations omitted)
Consistent with the foregoing precepts, the Court has then reconsidered
even decisions that have attained finality, finding it more appropriate to lift
entries of judgments already made in these cases. In Navarro v. Executive
Secretary,67 we reiterated the pronouncement in De Guzman that the power
to suspend or even disregard rules of procedure can be so pervasive and
compelling as to alter even that which this Court itself has already declared
final. The Court then recalled in Navarro an entry of judgment after it had
determined the validity and constitutionality of Republic Act No. 9355,
explaining that:
Verily, the Court had, on several occasions, sanctioned the recall of entries
of judgment in light of attendant extraordinary circumstances. The power to
suspend or even disregard rules of procedure can be so pervasive and
compelling as to alter even that which this Court itself had already declared
final. In this case, the compelling concern is not only to afford the movants-
Page 31 of 52 | LABREL – 4E | FT CASES B1
intervenors the right to be heard since they would be adversely affected by
the judgment in this case despite not being original parties thereto, but also
to arrive at the correct interpretation of the provisions of the [Local
Government Code (LGC)] with respect to the creation of local government
units. x x x.68(Citations omitted)
In Munoz v. CA,69 the Court resolved to recall an entry of judgment to
prevent a miscarriage of justice. This justification was likewise applied in
Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:
The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v.
CA , where the case was elevated to this Court and a first and second
motion for reconsideration had been denied with finality , the Court, in the
interest of substantial justice, recalled the Entry of Judgment as well as the
letter of transmittal of the records to the Court of Appeals.71 (Citation
omitted)
In Barnes v. Judge Padilla,72 we ruled:
A final and executory judgment can no longer be attacked by any of the
parties or be modified, directly or indirectly, even by the highest court of the
land.
However, this Court has relaxed this rule in order to serve substantial
justice considering (a) matters of life, liberty, honor or property, (b) the
existence of special or compelling circumstances, (c) the merits of the case,
(d) a cause not entirely attributable to the fault or negligence of the party
favored by the suspension of the rules, (e) a lack of any showing that the
review sought is merely frivolous and dilatory, and (f) the other party will not
be unjustly prejudiced thereby.73 (Citations omitted)
As we shall explain, the instant case also qualifies as an exception to, first,
the proscription against second and subsequent motions for
reconsideration, and second, the rule on immutability of judgments; a
reconsideration of the Decision dated September 18, 2009, along with the
Resolutions dated December 14, 2009 and January 25, 2012, is justified by
the higher interest of substantial justice.
To begin with, the Court agrees with the respondents that the Court’s prior
resolve to grant , and not just merely note, in a Resolution dated March 15,
2010 the respondents’ motion for leave to submit their second motion for
reconsideration already warranted a resolution and discussion of the
motion for reconsideration on its merits. Instead of doing this, however, the
Court issued on January 25, 2012 a Resolution74 denying the motion to
reconsider for lack of merit, merely citing that it was a "prohibited pleading
under Section 2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules
of Civil Procedure, as amended."75 In League of Cities of the Philippines
(LCP) v. Commission on Elections,76 we reiterated a ruling that when a
motion for leave to file and admit a second motion for reconsideration is
granted by the Court, the Court therefore allows the filing of the second

motion for reconsideration. In such a case, the second motion for
reconsideration is no longer a prohibited pleading. Similarly in this case,
there was then no reason for the Court to still consider the respondents’
second motion for reconsideration as a prohibited pleading, and deny it
plainly on such ground. The Court intends to remedy such error through
this resolution.
More importantly, the Court finds it appropriate to accept the pending
motion for reconsideration and resolve it on the merits in order to rectify its
prior disposition of the main issues in the petition. Upon review, the Court is
constrained to rule differently on the petitions. We have determined the
grave error in affirming the NLRC’s rulings, promoting results that are
patently unjust for the respondents, as we consider the facts of the case,
pertinent law, jurisprudence, and the degree of the injury and damage to
the respondents that will inevitably result from the implementation of the
Court’s Decision dated September 18, 2009.
The rule on appeal bonds
We emphasize that the crucial issue in this case concerns the sufficiency of
the appeal bond that was posted by the respondents. The present rule on
the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure,
which was substantially the same provision in effect at the time of the
respondents’ appeal to the NLRC, and which reads:
RULE VI
 While the bond may be reduced upon motion by the employer, this is
APPEALS
Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional
Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a cash or surety bond. The appeal bond
shall either be in cash or surety in an amount equivalent to the monetary
award, exclusive of damages and attorney’s fees.
xxxx
No motion to reduce bond shall be entertained except on meritorious
grounds and upon the posting of a bond in a reasonable amount in relation
to the monetary award.
The filing of the motion to reduce bond without compliance with the
requisites in the preceding paragraph shall not stop the running of the
period to perfect an appeal. (Emphasis supplied)
While the CA, in this case, allowed an appeal bond in the reduced amount
of P10,000,000.00 and then ordered the case’s remand to the NLRC, this
Court’s Decision dated September 18, 2009 provides otherwise, as it reads
in part:
The posting of a bond is indispensable to the perfection of an appeal in
cases involving monetary awards from the decision of the Labor Arbiter.
The lawmakers clearly intended to make the bond a mandatory requisite for
Page 32 of 52 | LABREL – 4E | FT CASES B1
the perfection of an appeal by the employer as inferred from the provision
that an appeal by the employer may be perfected "only upon the posting of
a cash or surety bond." The word "only" makes it clear that the posting of a
cash or surety bond by the employer is the essential and exclusive means
by which an employer’s appeal may be perfected. x x x.
Moreover, the filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer
jurisdiction upon the NLRC. Non-compliance therewith renders the decision
of the Labor Arbiter final and executory. This requirement is intended to
assure the workers that if they prevail in the case, they will receive the
money judgment in their favor upon the dismissal of the employer’s appeal.
It is intended to discourage employers from using an appeal to delay or
evade their obligation to satisfy their employees’ just and lawful claims.
xxxx
Thus, it behooves the Court to give utmost regard to the legislative and
administrative intent to strictly require the employer to post a cash or surety
bond securing the full amount of the monetary award within the 10[-]day
reglementary period. Nothing in the Labor Code or the NLRC Rules of
Procedure authorizes the posting of a bond that is less than the monetary
award in the judgment, or would deem such insufficient posting as sufficient
to perfect the appeal.
subject to the conditions that (1) the motion to reduce the bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant, otherwise the filing of the
motion to reduce bond shall not stop the running of the period to perfect an
appeal. The qualification effectively requires that unless the NLRC grants
the reduction of the cash bond within the 10-day reglementary period, the
employer is still expected to post the cash or surety bond securing the full
amount within the said 10-day period. If the NLRC does eventually grant
the motion for reduction after the reglementary period has elapsed, the
correct relief would be to reduce the cash or surety bond already posted by
the employer within the 10-day period.77 (Emphasis supplied; underscoring
ours)
To begin with, the Court rectifies its prior pronouncement – the unqualified
statement that even an appellant who seeks a reduction of an appeal bond
before the NLRC is expected to post a cash or surety bond securing the full
amount of the judgment award within the 10-day reglementary period to
perfect the appeal.

The suspension of the period to
 substantial justice; (2) prevention of miscarriage of justice or of unjust
perfect the appeal upon the filing of
 enrichment; and (3) special circumstances of the case combined with its
a motion to reduce bond
To clarify, the prevailing jurisprudence on the matter provides that the filing
of a motion to reduce bond, coupled with compliance with the two
conditions emphasized in Garcia v. KJ Commercial78 for the grant of such
motion, namely, (1) a meritorious ground, and (2) posting of a bond in a
reasonable amount, shall suffice to suspend the running of the period to
perfect an appeal from the labor arbiter’s decision to the NLRC.79 To
require the full amount of the bond within the 10-day reglementary period
would only render nugatory the legal provisions which allow an appellant to
seek a reduction of the bond. Thus, we explained in Garcia:
The filing of a motion to reduce bond and compliance with the two
conditions stop the running of the period to perfect an appeal. x x x
xxxx
The NLRC has full discretion to grant or deny the motion to reduce bond,
and it may rule on the motion beyond the 10-day period within which to
perfect an appeal. Obviously, at the time of the filing of the motion to reduce
bond and posting of a bond in a reasonable amount, there is no assurance
whether the appellant’s motion is indeed based on "meritorious ground"
and whether the bond he or she posted is of a "reasonable amount." Thus,
the appellant always runs the risk of failing to perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce bond,
the appellant must be allowed to wait for the ruling of the NLRC on the
motion even beyond the 10-day period to perfect an appeal. If the NLRC
grants the motion and rules that there is indeed meritorious ground and that
the amount of the bond posted is reasonable, then the appeal is perfected.
If the NLRC denies the motion, the appellant may still file a motion for
reconsideration as provided under Section 15, Rule VII of the Rules. If the
NLRC grants the motion for reconsideration and rules that there is indeed
meritorious ground and that the amount of the bond posted is reasonable,
then the appeal is perfected. If the NLRC denies the motion, then the
decision of the labor arbiter becomes final and executory.
xxxx
In any case, the rule that the filing of a motion to reduce bond shall not stop
the running of the period to perfect an appeal is not absolute. The Court
may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court
held:
"Jurisprudence tells us that in labor cases, an appeal from a decision
involving a monetary award may be perfected only upon the posting of cash
or surety bond. The Court, however, has relaxed this requirement under
certain exceptional circumstances in order to resolve controversies on their
merits. These circumstances include: (1) fundamental consideration of
Page 33 of 52 | LABREL – 4E | FT CASES B1
legal merits, and the amount and the issue involved."80(Citations omitted
and emphasis ours)
A serious error of the NLRC was its outright denial of the motion to reduce
the bond, without even considering the respondents’ arguments and totally
unmindful of the rules and jurisprudence that allow the bond’s reduction.
Instead of resolving the motion to reduce the bond on its merits, the NLRC
insisted on an amount that was equivalent to the monetary award, merely
explaining:
We are constrained to deny respondents’ motion for reduction. As held by
the Supreme Court in a recent case, in cases involving monetary award, an
employer seeking to appeal the Labor Arbiter’s decision to the Commission
is unconditionally required by Art. 223, Labor Code to post bond in the
amount equivalent to the monetary award (Calabash Garments vs. NLRC,
G.R. No. 110827, August 8, 1996). x x x81 (Emphasis ours)
When the respondents sought to reconsider, the NLRC still refused to fully
decide on the motion. It refused to at least make a preliminary
determination of the merits of the appeal, as it held:
We are constrained to dismiss respondents’ Motion for Reconsideration.
Respondents’ contention that the appeal bond is excessive and based on a
decision which is a patent nullity involves the merits of the case. x x x82
Prevailing rules and jurisprudence

allow the reduction of appeal bonds.
By such haste of the NLRC in peremptorily denying the respondents’
motion without considering the respondents’ arguments, it effectively
denied the respondents of their opportunity to seek a reduction of the bond
even when the same is allowed under the rules and settled jurisprudence. It
was equivalent to the NLRC’s refusal to exercise its discretion, as it refused
to determine and rule on a showing of meritorious grounds and the
reasonableness of the bond tendered under the circumstances.83 Time and
again, the Court has cautioned the NLRC to give Article 223 of the Labor
Code, particularly the provisions requiring bonds in appeals involving
monetary awards, a liberal interpretation in line with the desired objective of
resolving controversies on the merits.84 The NLRC’s failure to take action
on the motion to reduce the bond in the manner prescribed by law and
jurisprudence then cannot be countenanced. Although an appeal by parties
from decisions that are adverse to their interests is neither a natural right
nor a part of due process, it is an essential part of our judicial system.
Courts should proceed with caution so as not to deprive a party of the right
to appeal, but rather, ensure that every party has the amplest opportunity
for the proper and just disposition of their cause, free from the constraints
of technicalities.85 Considering the mandate of labor tribunals, the principle
equally applies to them.

Given the circumstances of the case, the Court’s affirmance in the Decision
dated September 18, 2009 of the NLRC’s strict application of the rule on
appeal bonds then demands a re-examination. Again, the emerging trend in
our jurisprudence is to afford every party-litigant the amplest opportunity for
the proper and just determination of his cause, free from the constraints of
technicalities.86 Section 2, Rule I of the NLRC Rules of Procedure also
provides the policy that "the Rules shall be liberally construed to carry out
the objectives of the Constitution, the Labor Code of the Philippines and
other relevant legislations, and to assist the parties in obtaining just,
expeditious and inexpensive resolution and settlement of labor disputes."87
In accordance with the foregoing, although the general rule provides that an
appeal in labor cases from a decision involving a monetary award may be
perfected only upon the posting of a cash or surety bond, the Court has
relaxed this requirement under certain exceptional circumstances in order
to resolve controversies on their merits. These circumstances include: (1)
the fundamental consideration of substantial justice; (2) the prevention of
miscarriage of justice or of unjust enrichment; and (3) special
circumstances of the case combined with its legal merits, and the amount
and the issue involved.88 Guidelines that are applicable in the reduction of
appeal bonds were also explained in Nicol v. Footjoy Industrial Corporation.
89 The bond requirement in appeals involving monetary awards has been
and may be relaxed in meritorious cases, including instances in which (1)
there was substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a
liberal interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits, or (4) the
appellants, at the very least, exhibited their willingness and/or good faith by
posting a partial bond during the reglementary period.90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article
22392 of the Labor Code, as amended by Republic Act No. 6715, which
requires a cash or surety bond in an amount equivalent to the monetary
award in the judgment appealed from may be considered a jurisdictional
requirement for the perfection of an appeal, nevertheless, adhering to the
principle that substantial justice is better served by allowing the appeal on
the merits to be threshed out by the NLRC, the foregoing requirement of
the law should be given a liberal interpretation.
As the Court, nonetheless, remains firm on the importance of appeal bonds
in appeals from monetary awards of LAs, we stress that the NLRC,
pursuant to Section 6, Rule VI of the NLRC Rules of Procedure, shall only
accept motions to reduce bond that are coupled with the posting of a bond
in a reasonable amount. Time and again, we have explained that the bond
requirement imposed upon appellants in labor cases is intended to ensure
the satisfaction of awards that are made in favor of appellees, in the event
that their claims are eventually sustained by the courts.93 On the part of the
Page 34 of 52 | LABREL – 4E | FT CASES B1
appellants, its posting may also signify their good faith and willingness to
recognize the final outcome of their appeal.
At the time of a motion to reduce appeal bond’s filing, the question of what
constitutes "a reasonable amount of bond" that must accompany the
motion may be subject to differing interpretations of litigants. The judgment
of the NLRC which has the discretion under the law to determine such
amount cannot as yet be invoked by litigants until after their motions to
reduce appeal bond are accepted.
Given these limitations, it is not uncommon for a party to unduly forfeit his
opportunity to seek a reduction of the required bond and thus, to appeal,
when the NLRC eventually disagrees with the party’s assessment. These
have also resulted in the filing of numerous petitions against the NLRC,
citing an alleged grave abuse of discretion on the part of the labor tribunal
for its finding on the sufficiency or insufficiency of posted appeal bonds.
It is in this light that the Court finds it necessary to set a parameter for the
litigants’ and the NLRC’s guidance on the amount of bond that shall
hereafter be filed with a motion for a bond’s reduction. To ensure that the
provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give
parties the chance to seek a reduction of the appeal bond are effectively
carried out, without however defeating the benefits of the bond requirement
in favor of a winning litigant, all motions to reduce bond that are to be filed
with the NLRC shall be accompanied by the posting of a cash or surety
bond equivalent to 10% of the monetary award that is subject of the appeal,
which shall provisionally be deemed the reasonable amount of the bond in
the meantime that an appellant’s motion is pending resolution by the
Commission. In conformity with the NLRC Rules, the monetary award, for
the purpose of computing the necessary appeal bond, shall exclude
damages and attorney’s fees.94 Only after the posting of a bond in the
required percentage shall an appellant’s period to perfect an appeal under
the NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC’s
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 motion’s 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.
Meritorious ground as a condition

for the reduction of the appeal bond

In all cases, the reduction of the appeal bond shall be justified by
meritorious grounds and accompanied by the posting of the required
appeal bond in a reasonable amount.
The requirement on the existence of a "meritorious ground" delves on the
worth of the parties’ arguments, taking into account their respective rights
and the circumstances that attend the case. The condition was emphasized
in University Plans Incorporated v. Solano,95 wherein the Court held that
while the NLRC’s Revised Rules of Procedure "allows the [NLRC] to reduce
the amount of the bond, the exercise of the authority is not a matter of right
on the part of the movant, but lies within the sound discretion of the NLRC
upon a showing of meritorious grounds."96 By jurisprudence, the merit
referred to may pertain to an appellant’s lack of financial capability to pay
the full amount of the bond,97 the merits of the main appeal such as when
there is a valid claim that there was no illegal dismissal to justify the award,
98 the absence of an employer-employee relationship,99 prescription of
claims,100 and other similarly valid issues that are raised in the appeal.
101 For the purpose of determining a "meritorious ground", the NLRC is not
precluded from receiving evidence, or from making a preliminary
determination of the merits of the appellant’s contentions.102
In this case, the NLRC then should have considered the respondents’
arguments in the memorandum on appeal that was filed with the motion to
reduce the requisite appeal bond. Although a consideration of said
arguments at that point would have been merely preliminary and should not
in any way bind the eventual outcome of the appeal, it was apparent that
the respondents’ defenses came with an indication of merit that deserved a
full review of the decision of the LA. The CA, by its Resolution dated
February 16, 2007, even found justified the issuance of a preliminary
injunction to enjoin the immediate execution of the LA’s decision, and this
Court, a temporary restraining order on September 4, 2012.
Significantly, following the CA’s remand of the case to the NLRC, the latter
even rendered a Decision that contained findings that are inconsistent with
McBurnie’s claims. The NLRC reversed and set aside the decision of the
LA, and entered a new one dismissing McBurnie’s complaint. It explained
that McBurnie was not an employee of the respondents; thus, they could
not have dismissed him from employment. The purported employment
contract of the respondents with the petitioner was qualified by the
conditions set forth in a letter dated May 11, 1999, which reads:
May 11, 1999
MR. ANDREW MCBURNIE
Re: Employment Contract
Dear Andrew,
Page 35 of 52 | LABREL – 4E | FT CASES B1
It is understood that this Contract is made subject to the understanding that
it is effective only when the project financing for our Baguio Hotel project
pushed through.
The agreement with EGI Managers, Inc. is made now to support your need
to facilitate your work permit with the Department of Labor in view of the
expiration of your contract with Pan Pacific.
Regards,
Sgd. Eulalio Ganzon (p. 203, Records)103
For the NLRC, the employment agreement could not have given rise to an
employer-employee relationship by reason of legal impossibility. The two
conditions that form part of their agreement, namely, the successful
completion of the project financing for the hotel project in Baguio City and
McBurnie’s acquisition of an Alien Employment Permit, remained
unsatisfied.104 The NLRC concluded that McBurnie was instead a potential
investor in a project that included Ganzon, but the said project failed to
pursue due to lack of funds. Any work performed by McBurnie in relation to
the project was merely preliminary to the business venture and part of his
"due diligence" study before pursuing the project, "done at his own
instance, not in furtherance of the employment contract but for his own
investment purposes."105 Lastly, the alleged employment of the petitioner
would have been void for being contrary to law, since it is undisputed that
McBurnie did not have any work permit. The NLRC declared:
Absent an employment permit, any employment relationship that McBurnie
contemplated with the respondents was void for being contrary to law. A
void or inexistent contract, in turn, has no force and effect from the
beginning as if it had never been entered into. Thus, without an Alien
Employment Permit, the "Employment Agreement" is void and could not be
the source of a right or obligation. In support thereof, the DOLE issued a
certification that McBurnie has neither applied nor been issued an Alien
Employment Permit (p. 204, Records).106
McBurnie moved to reconsider, citing the Court’s Decision of September
18, 2009 that reversed and set aside the CA’s Decision authorizing the
remand. Although the NLRC granted the motion on the said ground via a
Decision107that set aside the NLRC’s Decision dated November 17, 2009,
the findings of the NLRC in the November 17, 2009 decision merit
consideration, especially since the findings made therein are supported by
the case records.
In addition to the apparent merit of the respondents’ appeal, the Court finds
the reduction of the appeal bond justified by the substantial amount of the
LA’s monetary award. Given its considerable amount, we find reason in the
respondents’ claim that to require an appeal bond in such amount could
only deprive them of the right to appeal, even force them out of business
and affect the livelihood of their employees.108 In Rosewood Processing,

Inc. v. NLRC,109 we emphasized: "Where a decision may be made to rest
on informed judgment rather than rigid rules, the equities of the case must
be accorded their due weight because labor determinations should not be
‘secundum rationem but also secundum caritatem.’"110
What constitutes a reasonable
 Employees Association, President Rodolfo Jimenez, and members,
amount in the determination of the
 Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric Cooperative, Inc.
final amount of appeal bond
As regards the requirement on the posting of a bond in a "reasonable
amount," the Court holds that the final determination thereof by the NLRC
shall be based primarily on the merits of the motion and the main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI
thereof, provides that the bond to be posted shall be "in a reasonable
amount in relation to the monetary award ," the merit of the motion shall
always take precedence in the determination. Settled is the rule that
procedural rules were conceived, and should thus be applied in a manner
that would only aid the attainment of justice. If a stringent application of the
rules would hinder rather than serve the demands of substantial justice, the
former must yield to the latter.111
Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon
an appeal from the LA’s award of P51,956,314.00, the Court, instead of
ruling right away on the reasonableness of the bond’s amount solely on the
basis of the judgment award, found it appropriate to remand the case to the
NLRC, which should first determine the merits of the motion. In University
Plans,112 the Court also reversed the outright dismissal of an appeal where
the bond posted in a judgment award of more than P30,000,000.00
was P30,000.00. The Court then directed the NLRC to first determine the
merit, or lack of merit, of the motion to reduce the bond, after the appellant
therein claimed that it was under receivership and thus, could not dispose
of its assets within a short notice. Clearly, the rule on the posting of an
appeal bond should not be allowed to defeat the substantive rights of the
parties.113
Notably, in the present case, following the CA’s rendition of its Decision
which allowed a reduced appeal bond, the respondents have posted a
bond in the amount of P10,000,000.00. In Rosewood, the Court deemed
the posting of a surety bond of P50,000.00, coupled with a motion to
reduce the appeal bond, as substantial compliance with the legal
requirements for an appeal from a P789,154.39 monetary award
"considering the clear merits which appear, res ipsa loquitor, in the appeal
from the LA’s Decision, and the petitioner’s substantial compliance with
rules governing appeals."114 The foregoing jurisprudence strongly indicate
that in determining the reasonable amount of appeal bonds, the Court
primarily considers the merits of the motions and appeals.
Given the circumstances in this case and the merits of the respondents’
arguments before the NLRC, the Court holds that the respondents had
Page 36 of 52 | LABREL – 4E | FT CASES B1
posted a bond in a "reasonable amount", and had thus complied with the
requirements for the perfection of an appeal from the LA’s decision. The CA
was correct in ruling that:
In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I)
(NEECO I) and Patricio de la Peña (GR No. 116066, January 24, 2000), the
Supreme Court recognized that: "the NLRC, in its Resolution No. 11-01-91
dated November 7, 1991 deleted the phrase "exclusive of moral and
exemplary damages as well as attorney’s fees in the determination of the
amount of bond, and provided a safeguard against the imposition of
excessive bonds by providing that "(T)he Commission may in meritorious
cases and upon motion of the appellant, reduce the amount of the bond."
In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:
"The unreasonable and excessive amount of bond would be oppressive
and unjust and would have the effect of depriving a party of his right to
appeal."
xxxx
In dismissing outright the motion to reduce bond filed by petitioners, NLRC
abused its discretion. It should have fixed an appeal bond in a reasonable
amount. Said dismissal deprived petitioners of their right to appeal the
Labor Arbiter’s decision.
xxxx
NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec.
6, Rule VI, NLRC Rules of Procedure). This Court finds the appeal bond in
the amount of P54,083,910.00 prohibitive and excessive, which constitutes
a meritorious ground to allow a motion for reduction thereof.115
The foregoing declaration of the Court requiring a bond in a reasonable
amount, taking into account the merits of the motion and the appeal, is
consistent with the oft-repeated principle that letter-perfect rules must yield
to the broader interest of substantial justice.116
The effect of a denial of the appeal
to the NLRC
In finding merit in the respondents’ motion for reconsideration, we also take
into account the unwarranted results that will arise from an implementation
of the Court’s Decision dated September 18, 2009. We emphasize,
moreover, that although a remand and an order upon the NLRC to give due
course to the appeal would have been the usual course after a finding that
the conditions for the reduction of an appeal bond were duly satisfied by the
respondents, given such results, the Court finds it necessary to modify the

CA’s order of remand, and instead rule on the dismissal of the complaint
against the respondents.
Without the reversal of the Court’s Decision and the dismissal of the
complaint against the respondents, McBurnie would be allowed to claim
benefits under our labor laws despite his failure to comply with a settled
requirement for foreign nationals.
Considering that McBurnie, an Australian, alleged illegal dismissal and
sought to claim under our labor laws, it was necessary for him to establish,
first and foremost, that he was qualified and duly authorized to obtain
employment within our jurisdiction. A requirement for foreigners who intend
to work within the country is an employment permit, as provided under
Article 40, Title II of the Labor Code which reads:
Art. 40. Employment permit for non-resident aliens. Any alien seeking
admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of
Labor.
In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign
national’s failure to seek an employment permit prior to employment poses
a serious problem in seeking relief from the Court.118 Thus, although the
respondent therein appeared to have been illegally dismissed from
employment, we explained:
This is Galera’s dilemma: Galera worked in the Philippines without proper
work permit but now wants to claim employee’s benefits under Philippine
labor laws.
xxxx
The law and the rules are consistent in stating that the employment permit
must be acquired prior to employment. The Labor Code states: "Any alien
seeking admission to the Philippines for employment purposes and any
domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the
Department of Labor." Section 4, Rule XIV, Book I of the Implementing
Rules and Regulations provides:
"Employment permit required for entry. – No alien seeking employment,
whether as a resident or non-resident, may enter the Philippines without
first securing an employment permit from the Ministry. If an alien enters the
country under a non-working visa and wishes to be employed thereafter, he
may be allowed to be employed upon presentation of a duly approved
employment permit."
Galera cannot come to this Court with unclean hands. To grant Galera’s
prayer is to sanction the violation of the Philippine labor laws requiring
aliens to secure work permits before their employment. We hold that the
Page 37 of 52 | LABREL – 4E | FT CASES B1
status quo must prevail in the present case and we leave the parties where
they are. This ruling, however, does not bar Galera from seeking relief from
other jurisdictions.119 (Citations omitted and underscoring ours)
Clearly, this circumstance on the failure of McBurnie to obtain an
employment permit, by itself, necessitates the dismissal of his labor
complaint.
Furthermore, as has been previously discussed, the NLRC has ruled in its
Decision dated November 17, 2009 on the issue of illegal dismissal. It
declared that McBurnie was never an employee of any of the respondents.
120 It explained:
All these facts and circumstances prove that McBurnie was never an
employee of Eulalio Ganzon or the respondent companies, but a potential
investor in a project with a group including Eulalio Ganzon and Martinez but
said project did not take off because of lack of funds.
McBurnie further claims that in conformity with the provision of the
employment contract pertaining to the obligation of the respondents to
provide housing, respondents assigned him Condo Unit # 812 of the Makati
Cinema Square Condominium owned by the respondents. He was also
allowed to use a Hyundai car. If it were true that the contract of employment
was for working visa purposes only, why did the respondents perform their
obligations to him?
There is no question that respondents assigned him Condo Unit # 812 of
the MCS, but this was not free of charge. If it were true that it is part of the
compensation package as employee, then McBurnie would not be
obligated to pay anything, but clearly, he admitted in his letter that he had to
pay all the expenses incurred in the apartment.
Assuming for the sake of argument that the employment contract is valid
between them, record shows that McBurnie worked from September 1,
1999 until he met an accident on the last week of October. During the
period of employment, the respondents must have paid his salaries in the
sum of US$26,000.00, more or less.
However, McBurnie failed to present a single evidence that [the
respondents] paid his salaries like payslip, check or cash vouchers duly
signed by him or any document showing proof of receipt of his
compensation from the respondents or activity in furtherance of the
employment contract. Granting again that there was a valid contract of
employment, it is undisputed that on November 1, 1999, McBurnie left for
Australia and never came back. x x x.121(Emphasis supplied)
Although the NLRC’s Decision dated November 17, 2009 was set aside in
a Decision dated January 14, 2010, the Court’s resolve to now reconsider
its Decision dated September 18, 2009 and to affirm the CA’s Decision and
Resolution in the respondents’ favor effectively restores the NLRC’s basis
for rendering the Decision dated November 17, 2009.

More importantly, the NLRC’s findings on the contractual relations between
McBurnie and the respondents are supported by the records.
First, before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established.122 Although an employment
agreement forms part of the case records, respondent Ganzon signed it
with the notation "per my note."123 The respondents have sufficiently
explained that the note refers to the letter124dated May 11, 1999 which
embodied certain conditions for the employment’s effectivity. As we have
previously explained, however, the said conditions, particularly on the
successful completion of the project financing for the hotel project in Baguio
City and McBurnie’s acquisition of an Alien Employment Permit, failed to
materialize. Such defense of the respondents, which was duly considered
by the NLRC in its Decision dated November 17, 2009, was not sufficiently
rebutted by McBurnie.
Second, McBurnie failed to present any employment permit which would
have authorized him to obtain employment in the Philippines. This
circumstance negates McBurnie’s claim that he had been performing work
for the respondents by virtue of an employer-employee relationship. The
absence of the employment permit instead bolsters the claim that the
supposed employment of McBurnie was merely simulated, or did not ensue
due to the non-fulfillment of the conditions that were set forth in the letter of
May 11, 1999.
Third, besides the employment agreement, McBurnie failed to present other
competent evidence to prove his claim of an employer-employee
relationship. Given the parties’ conflicting claims on their true intention in
executing the agreement, it was necessary to resort to the established
criteria for the determination of an employer-employee relationship, namely:
(1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct.125 The rule of thumb remains: the onus probandi falls
on the claimant to establish or substantiate the claim by the requisite
quantum of evidence. Whoever claims entitlement to the benefits provided
by law should establish his or her right thereto.126 McBurnie failed in this
regard.1âwphi1 As previously observed by the NLRC, McBurnie even failed
to show through any document such as payslips or vouchers that his
salaries during the time that he allegedly worked for the respondents were
paid by the company. In the absence of an employer-employee relationship
between McBurnie and the respondents, McBurnie could not successfully
claim that he was dismissed, much less illegally dismissed, by the latter.
Even granting that there was such an employer-employee relationship, the
records are barren of any document showing that its termination was by the
respondents’ dismissal of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court
to remand the case to the NLRC, more so in the absence of any showing
Page 38 of 52 | LABREL – 4E | FT CASES B1
that the NLRC should now rule differently on the case’s merits. In Medline
Management, Inc. v. Roslinda,127 the Court ruled that when there is enough
basis on which the Court may render a proper evaluation of the merits of
the case, the Court may dispense with the time-consuming procedure of
remanding a case to a labor tribunal in order "to prevent delays in the
disposition of the case," "to serve the ends of justice" and when a remand
"would serve no purpose save to further delay its disposition contrary to the
spirit of fair play."128 In Real v. Sangu Philippines, Inc.,129 we again ruled:
With the foregoing, it is clear that the CA erred in affirming the decision of
the NLRC which dismissed petitioner’s complaint for lack of jurisdiction. In
cases such as this, the Court normally remands the case to the NLRC and
directs it to properly dispose of the case on the merits. "However, when
there is enough basis on which a proper evaluation of the merits of
petitioner’s case may be had, the Court may dispense with the time-
consuming procedure of remand in order to prevent further delays in the
disposition of the case." "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 seeds of litigation. If, based on the records, the
pleadings, and other evidence, the dispute can be resolved by us, we will
do so to serve the ends of justice instead of remanding the case to the
lower court for further proceedings." x x x.130 (Citations omitted)
It bears mentioning that although the Court resolves to grant the
respondents’ motion for reconsideration, the other grounds raised in the
motion, especially as they pertain to insinuations on irregularities in the
Court, deserve no merit for being founded on baseless conclusions.
Furthermore, the Court finds it unnecessary to discuss the other grounds
that are raised in the motion, considering the grounds that already justify
the dismissal of McBurnie’s complaint.
All these considered, the Court also affirms its Resolution dated September
4, 2012; accordingly, McBurnie’s motion for reconsideration thereof is
denied.
WHEREFORE, in light of the foregoing, the Court rules as follows:
(a) The motion for reconsideration filed on September 26, 2012 by
petitioner Andrew James McBurnie is DENIED;
(b) The motion for reconsideration filed on March 27, 2012 by
respondents Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon,
Inc. is GRANTED.
(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is
LIFTED. This Court’s Decision dated September 18, 2009 and
Resolutions dated December 14, 2009 and January 25, 2012 are
SET ASIDE. The Court of Appeals Decision dated October 27,
2008 and Resolution dated March 3, 2009 in CA-G.R. SP No.
90845 and CA-G.R. SP No. 95916 are AFFIRMED WITH
 Page 39 of 52 | LABREL – 4E | FT CASES B1

MODIFICATION. In lieu of a remand of the case to the National

Labor Relations Commission, the complaint for illegal dismissal
filed by petitioner Andrew James McBurnie against respondents
Eulalio Ganzon, EGI-Managers, Inc. and E. Ganzon, Inc. is
DISMISSED.
Furthermore, on the matter of the filing and acceptance of motions to
reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC
Rules of Procedure, the Court hereby RESOLVES that henceforth, the
following guidelines shall be observed:
(a) The filing o a motion to reduce appeal bond shall be entertained
by the NLRC subject to the following conditions: (1) there is
meritorious ground; and (2) a bond in a reasonable amount is
posted;
(b) For purposes o compliance with condition no. (2), a motion shall
be accompanied by the posting o a provisional cash or surety bond
equivalent to ten percent (10,) of the monetary award subject o the
appeal, exclusive o damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to
suspend the running o the 1 0-day reglementary period to perfect
an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to
reduce bond and determine the final amount o bond that shall be
posted by the appellant, still in accordance with the standards o
meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond,
or requires a bond that exceeds the amount o the provisional bond,
the appellant shall be given a fresh period o ten 1 0) days from
notice o the NLRC order within which to perfect the appeal by
posting the required appeal bond.
SO ORDERED.

G.R. No. 196047 January 15, 2014
LEPANTO CONSOLIDATED MINING CORPORATION, Petitioner, 

vs.

BELIO ICAO, Respondent.
DECISION
SERENO, CJ:
This Petition under Rule 45 of the Rules of Court seeks to annul and set
aside the Court of Appeals (CA) Decision dated 27 September 2010 and
the Resolution dated 11 March 2011 in CA-G.R. SP. No. 113095.1 In the
assailed Decision and Resolution, the CA upheld the Order of the National
Labor and Relations Commission (NLRC) First Division dismissing
petitioner s appeal for allegedly failing to post an appeal bond as required
by the Labor Code. Petitioner had instead filed a motion to release the cash
bond it posted in another NLRC case which had been decided with finality
in its favor with a view to applying the bond to the appealed case before the
NLRC First Division. Hence, the Court is now asked to rule whether
petitioner had complied with the appeal bond requirement. If it had, its
appeal before the NLRC First Division should be reinstated.
The Facts
We quote the CA s narration of facts as follows:
The instant petition stemmed from a complaint for illegal dismissal and
damages filed by private respondent Belio C. Icao [Icao] against petitioners
Lepanto Consolidated Mining Company (LCMC) and its Chief Executive
Officer [CEO] Felipe U. Yap [Yap] before the Arbitration Branch of the
NLRC.
Private respondent essentially alleged in his complaint that he was an
employee of petitioner LCMC assigned as a lead miner in its underground
mine in Paco, Mankayan, Benguet. On January 4, 2008, private respondent
reported for the 1st shift of work (11:00 p.m. to 7:00 a.m.) and was
assigned at 248-8M2, 750 Level of the mining area. At their workplace,
private respondent did some barring down, installed five (5) rock bolt
support, and drilled eight (8) blast holes for the mid-shift blast. They then
had their meal break. When they went back to their workplace, they again
barred down loose rocks and drilled eight (8) more blast holes for the last
round of blast. While waiting for the time to ignite their round, one of his co-
workers shouted to prepare the explosives for blasting, prompting private
respondent to run to the adjacent panels and warn the other miners.
Thereafter, he decided to take a bath and proceeded at [sic] the bathing
station where four (4) of his co-workers were also present. Before he could
join them, he heard a voice at his back and saw Security Guard (SG) Larry
Bulwayan instructing his companion SG Dale Papsa-ao to frisk him. As
private respondent was removing his boots, SG Bulwayan forcibly pulled
his skullguard from his head causing it to fall down [sic] to the ground
Page 40 of 52 | LABREL – 4E | FT CASES B1
including its harness and his detergent soap which was inserted in the
skullguard harness. A few minutes later, private respondent saw SG
Bulwayan [pick] up a wrapped object at the bathing station and gave it to
his companion. SGs Bulwayan and Papsa-ao invited the private respondent
to go with them at the investigation office to answer questions regarding the
wrapped object. He was then charged with "highgrading" or the act of
concealing, possessing or unauthorized extraction of highgrade material/
ore without proper authority. Private respondent vehemently denied the
charge. Consequently, he was dismissed from his work.
Private respondent claimed that his dismissal from work was without just or
authorized cause since petitioners failed to prove by ample and sufficient
evidence that he stole gold bearing highgrade ores from the company
premises. If private respondent was really placing a wrapped object inside
his boots, he should have been sitting or bending down to insert the same,
instead of just standing on a muckpile as alleged by petitioners. Moreover,
it is beyond imagination that a person, knowing fully well that he was being
chased for allegedly placing wrapped ore inside his boots, will transfer it to
his skullguard. The tendency in such situation is to throw the object away.
As such, private respondent prayed that petitioners be held liable for illegal
dismissal, to reinstate him to his former position without loss of seniority
rights and benefits, and to pay his full backwages, damages and attorney’s
fees.
For their defense, petitioners averred that SG Bulwayan saw private
respondent standing on a muckpile and inserting a wrapped object inside
his right rubber boot. SG Bulwayan immediately ran towards private
respondent, but the latter ran away to escape. He tried to chase private
respondent but failed to capture him. Thereafter, while SG Bulwayan was
on his way to see his co-guard SG Papsa-ao, he saw private respondent
moving out of a stope. He then shouted at SG Papsa-ao to intercept him.
When private respondent was apprehended, SG Bulwayan ordered him to
remove his skullguard for inspection and saw a wrapped object placed
inside the helmet. SG Bulwayan grabbed it, but the harness of the
skullguard was also detached causing the object to fall on the ground.
Immediately, SG Bulwayan recovered and inspected the same which
turned out to be pieces of stone ores. Private respondent and the stone
ores were later turned over to the Mankayan Philippine National Police
where he was given a written notice of the charge against him. On January
9, 2008, a hearing was held where private respondent, together with the
officers of his union as well as the apprehending guards appeared. On
February 4, 2008, private respondent received a copy of the resolution of
the company informing him of his dismissal from employment due to breach
of trust and confidence and the act of highgrading.2
THE LABOR ARBITER’S RULING THAT

PETITIONER LCMC IS LIABLE FOR ILLEGAL DISMISSAL

On 30 September 2008, the labor arbiter rendered a Decision holding
petitioner and its CEO liable for illegal dismissal and ordering them to pay
respondent Icao P345,879.45, representing his full backwages and
separation pay.3 The alleged highgrading attributed by LCMC’s security
guards was found to have been fabricated; consequently, there was no just
cause for the dismissal of respondent. The labor arbiter concluded that the
claim of the security guards that Icao had inserted ores in his boots while in
a standing position was not in accord with normal human physiological
functioning.4
The labor arbiter also noted that it was inconsistent with normal human
behavior for a man, who knew that he was being chased for allegedly
placing wrapped ore inside his boots, to then transfer the ore to his
skullguard, where it could be found once he was apprehended.5 To further
support the improbability of the allegation of highgrading, the labor arbiter
noted that throughout the 21 years of service of Icao to LCMC, he had
never been accused of or penalized for highgrading or any other infraction
involving moral turpitude – until this alleged incident.6
THE NLRC ORDER DISMISSING THE APPEAL
 perfection and the questioned decision is declared as having become final
OF PETITIONER LCMC FOR FAILURE TO POST THE APPEAL BOND
On 8 December 2008, petitioner and its CEO filed an Appearance with
Memorandum of Appeal7 before the NLRC. Instead of posting the required
appeal bond in the form of a cash bond or a surety bond in an amount
equivalent to the monetary award of P345,879.45 adjudged in favor of Icao,
they filed a Consolidated Motion For Release Of Cash Bond And To Apply
Bond Subject For Release As Payment For Appeal Bond (Consolidated
Motion).8 They requested therein that the NLRC release the cash bond
of P401,610.84, which they had posted in the separate case Dangiw
Siggaao v. LCMC,9 and apply that same cash bond to their present appeal
bond liability. They reasoned that since this Court had already decided
Dangiw Siggaao in their favor, and that the ruling therein had become final
and executory, the cash bond posted therein could now be released.10 They
also cited financial difficulty as a reason for resorting to this course of action
and prayed that, in the interest of justice, the motion be granted.
In its Order dated 27 February 2009, the NLRC First Division dismissed the
appeal of petitioner and the latter’s CEO for non-perfection.11 It found that
they had failed to post the required appeal bond equivalent to the monetary
award of P345,879.45. It explained that their Consolidated Motion for the
release of the cash bond in another case (Dangiw Siggaao), for the
purpose of applying the same bond to the appealed case before it, could
not be considered as compliance with the requirement to post the required
appeal bond. Consequently, it declared the labor arbiter’s Decision to be
final and executory. The pertinent portions of the assailed Order are quoted
below:
Page 41 of 52 | LABREL – 4E | FT CASES B1
The rules are clear. Appeals from decision involving a monetary award
maybe [sic] perfected only upon posting of a cash or surety-bond within the
ten (10) day reglementary period for filing an appeal. Failure to file and post
the required appeal bond within the said period results in the appeal not
being perfected and the appealed judgment becomes final and executory.
Thus, the Commission loses authority to entertain or act on the appeal
much less reverse the decision of the Labor Arbiter (Gaudia vs. NLRC, 318
SCRA 439).
In this case, respondents failed to post the required appeal bond equivalent
to the monetary award of P345,879.45. The Consolidated Motion for
Release of Cash Bond (posted as appeal bond in another case) with prayer
to apply the bond to be released as appeal bond may not be considered as
compliance with the jurisdictional requirement, as the application or posting
is subject to the condition that the cash bond would be released. Besides,
even if the motion for release is approved, the ten (10) day period has long
expired, rendering the statutory right to appeal forever lost.
WHEREFORE, respondents’ appeal is hereby DISMISSED for non-
and executory. Let the Motion for Release of Cash bond be forwarded to
the Third Division, this Commission, for appropriate action.
SO ORDERED.12 (Emphasis supplied)
Petitioner and its CEO filed a Motion for Reconsideration. They
emphasized therein that they had tried to comply in good faith with the
requisite appeal bond by trying to produce a cash bond anew and also to
procure a new surety bond. However, after canvassing several bonding
companies, the costs have proved to be prohibitive.13 Hence, they resorted
to using the cash bond they posted in Dangiw Siggaao because the bond
was now free, unencumbered and could rightfully be withdrawn and used
by them.14 Their motion was denied in a Resolution dated 27 November
2009. Hence, they filed a Petition for Certiorari with the CA.
THE CA RULING AFFIRMING THE ORDER OF THE NLRC
On 27 September 2010, the CA issued its assailed Decision15 affirming the
Order of the NLRC First Division, which had dismissed the appeal of
petitioner and the latter’s CEO. According to the CA, they failed to comply
with the requirements of law and consequently lost the right to appeal.16
The CA explained that under Article 223 of the Labor Code, an appeal from
the labor arbiter’s Decision must be filed within 10 calendar days from
receipt of the decision. In case of a judgment involving a monetary award,
the posting of a cash or surety bond in an amount equivalent to the
monetary award is mandatory for the perfection of an appeal. In the instant
case, the CA found that petitioner and its CEO did not pay the appeal fees
and the required appeal bond equivalent to P345,879.45. Instead, it filed a
Consolidated Motion praying that the cash bond it had previously posted in

another labor case be released and applied to the present one. According
to the CA, this arrangement is not allowed under the rules of procedure of
the NLRC.17
Furthermore, the CA said that since the payment of appeal fees and the
posting of an appeal bond are indispensable jurisdictional requirements,
noncompliance with them resulted in petitioner’s failure to perfect its
appeal. Consequently, the labor arbiter’s Decision became final and
executory and, hence, binding upon the appellate court.18
Nevertheless, the CA ruled that the CEO of petitioner LCMC should be
dropped as a party to this case.19 No specific act was alleged in private
respondent’s pleadings to show that he had a hand in Icao’s illegal
dismissal; much less, that he acted in bad faith. In fact, the labor arbiter did
not cite any factual or legal basis in its Decision that would render the CEO
liable to respondent. The rule is that in the absence of bad faith, an officer
of a corporation cannot be made personally liable for corporate liabilities.
THE ISSUE
The sole issue before the Court is whether or not petitioner complied with
the appeal bond requirement under the Labor Code and the NLRC Rules
by filing a Consolidated Motion to release the cash bond it posted in
another case, which had been decided with finality in its favor, with a view
to applying the same cash bond to the present case.
OUR RULING
The Petition is meritorious. The Court finds that petitioner substantially
complied with the appeal bond requirement.
Before discussing its ruling, however, the Court finds it necessary to
emphasize the well-entrenched doctrine that an appeal is not a matter of
right, but is a mere statutory privilege. It may be availed of only in the
manner provided by law and the rules. Thus, a party who seeks to exercise
the right to appeal must comply with the requirements of the rules;
otherwise, the privilege is lost.20
In appeals from any decision or order of the labor arbiter, the posting of an
appeal bond is required under Article 223 of the Labor Code, which reads:
Article 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:
xxxx
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
Page 42 of 52 | LABREL – 4E | FT CASES B1
in the amount equivalent to the monetary award in the judgment appealed
from. (Emphasis and underlining supplied)
The 2011 NLRC Rules of Procedure (NLRC Rules) incorporates this
requirement in Rule VI, Section 6, which provides:
SECTION 6. Bond. — In case the decision of the Labor Arbiter or the
Regional Director involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a bond, which shall either be in
the form of cash deposit or surety bond equivalent in amount to the
monetary award, exclusive of damages and attorney’s fees. (Emphases
and underlining supplied)
In Viron Garments Manufacturing Co., Inc. v. NLRC,21 the Court explained
the mandatory nature of this requirement as follows:
The intention of the lawmakers to make the bond an indispensable requisite
for the perfection of an appeal by the employer, is clearly limned in the
provision that an appeal by the employer may be perfected "only upon the
posting of a cash or surety bond." The word "only" makes it perfectly clear,
that the lawmakers intended the posting of a cash or surety bond by the
employer to be the exclusive means by which an employer's appeal may be
perfected. (Emphases supplied)
We now turn to the main question of whether petitioner’s Consolidated
Motion to release the cash bond it posted in a previous case, for application
to the present case, constitutes compliance with the appeal bond
requirement. While it is true that the procedure undertaken by petitioner is
not provided under the Labor Code or in the NLRC Rules, we answer the
question in the affirmative. We reiterate our pronouncement in Araneta v.
Rodas,22 where the Court said that when the law does not clearly provide a
rule or norm for the tribunal to follow in deciding a question submitted, but
leaves to the tribunal the discretion to determine the case in one way or
another, the judge must decide the question in conformity with justice,
reason and equity, in view of the circumstances of the case. Applying this
doctrine, we rule that petitioner substantially complied with the mandatory
requirement of posting an appeal bond for the reasons explained below.
First, there is no question that the appeal was filed within the 10-day
reglementary period.23 Except for the alleged failure to post an appeal
bond, the appeal to the NLRC was therefore in order.
Second, it is also undisputed that petitioner has an unencumbered amount
of money in the form of cash in the custody of the NLRC. To reiterate,
petitioner had posted a cash bond of P401,610.84 in the separate case
Dangiw Siggaao, which was earlier decided in its favor. As claimed by
petitioner and confirmed by the Judgment Division of the Judicial Records
Office of this Court, the Decision of the Court in Dangiw Siggaao had
become final and executory as of 28 April 2008, or more than seven
months before petitioner had to file its appeal in the present case. This fact
 Page 43 of 52 | LABREL – 4E | FT CASES B1

is shown by the Entry of Judgment on file with the aforementioned office. rules on appeal bond, there is all the more reason in the present case to
Hence, the cash bond in that case ought to have been released to find that petitioner substantially complied with the requirement. We
petitioner then. emphasize that in this case we are not even exempting petitioner from the
rule, as in fact we are enforcing compliance with the posting of an appeal
Under the Rule VI, Section 6 of the 2005 NLRC Rules, "[a] cash or surety
bond. We are simply liberally applying the rules on what constitutes
bond shall be valid and effective from the date of deposit or posting, until
compliance with the requirement, given the special circumstances
the case is finally decided, resolved or terminated, or the award satisfied."
surrounding the case as explained above.
Hence, it is clear that a bond is encumbered and bound to a case only for
as long as 1) the case has not been finally decided, resolved or terminated; Having complied with the appeal bond requirement, petitioner s appeal
or 2) the award has not been satisfied. Therefore, once the appeal is finally before the NLRC must therefore be reinstated.1âwphi1
decided and no award needs to be satisfied, the bond is automatically Finally, a word of caution. Lest litigants be misled into thinking that they
released. Since the money is now unencumbered, the employer who may now wantonly disregard the rules on appeal bond in labor cases, we
posted it should now have unrestricted access to the cash which he may reiterate the mandatory nature of the requirement. The Court will liberally
now use as he pleases – as appeal bond in another case, for instance. This apply the rules only in very highly exceptional cases such as this, in
is what petitioner simply did. Third, the cash bond in the amount keeping with the dictates of justice, reason and equity.
of P401,610.84 posted in Dangiw Siggaao is more than enough to cover
the appeal bond in the amount of P345,879.45 required in the present WHEREFORE, premises considered, the instant Rule 45 Petition is
case. GRANTED. The Court of Appeals Decision dated 27 September 2010 and
its Resolution dated March 2011 in CA-G.R. SP. No. 113095, which
Fourth, this ruling remains faithful to the spirit behind the appeal bond dismisse4 petitioner s Rule 65 Petition, are hereby REVERSED. Finally, the
requirement which is to ensure that workers will receive the money National Labor Relations Commission Resolutions dated 27 February 2009
awarded in their favor when the employer’s appeal eventually fails.24 There and 27 November 2009 are SET ASIDE and the appeal of petitioner before
was no showing at all of any attempt on the part of petitioner to evade the it is hereby REINSTATED.
posting of the appeal bond. On the contrary, petitioner’s move showed a
willingness to comply with the requirement. Hence, the welfare of Icao is SO ORDERED.
adequately protected.
Moreover, this Court has liberally applied the NLRC Rules and the Labor
Code provisions on the posting of an appeal bond in exceptional cases. In
Your Bus Lines v. NLRC,25 the Court excused the appellant’s failure to post
a bond, because it relied on the notice of the decision. While the notice
enumerated all the other requirements for perfecting an appeal, it did not
include a bond in the list. In Blancaflor v. NLRC,26 the failure of the
appellant therein to post a bond was partly caused by the labor arbiter’s
failure to state the exact amount of monetary award due, which would have
been the basis of the amount of the bond to be posted. In Cabalan
Pastulan Negrito Labor Association v. NLRC27 petitioner-appellant was an
association of Negritos performing trash-sorting services in the American
naval base in Subic Bay. The plea of the association that its appeal be
given due course despite its non-posting of a bond, on account of
its insolvency and poverty, was granted by this Court. In UERM-Memorial
Medical Center v. NLRC28 we allowed the appellant-employer to post a
property bond in lieu of a cash or surety bond. The assailed judgment
involved more than P17 million; thus, its execution could adversely affect
the economic survival of the employer, which was a medical center.
If n the above-cited cases, the Court found exceptional circumstances that
warranted an extraordinary exercise of its power to exempt a party from the

G.R. No. 126322 January 16, 2002
YUPANGCO COTTON MILLS, INC., petitioner, 

vs.
 "6. It filed a complaint in the Regional Trial Court in Manila which
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.
PARDO, J.:
The Case
The case is a petition for review on certiorari of the decision of the Court of
Appeals1 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 unlawfully 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. It filed an original petition for mandatory injunction with the
NLRC on November 16, 1995. This was docketed as Case No.
Page 44 of 52 | LABREL – 4E | FT CASES B1
NLRC-NCR-IC. 0000602-95. This case is still pending with that
Commission.
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
decision3 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 reinvindicatoria 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. Bayhon6 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 the NLRC.
Besides, petitioner pointed out that neither the NLRC nor the Labor Arbiter
is empowered to adjudicate matters involving ownership of properties.
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 reinvindicatoria 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 on related caused 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." (Underscoring 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 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 reinvindicatoria 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
Page 45 of 52 | LABREL – 4E | FT CASES B1
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. 1âwphi1.nêt
"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." (Underscoring 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, x x
x:
"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 possession. What said court do in these instances, however, is
limited to a determination of whether the sheriff has acted rightful or
wrongly in the performance of his duties in the execution of
judgment, more specifically, if he has indeed take 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.
Page 46 of 52 | LABREL – 4E | FT CASES B1
"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 underscoring ours)
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:
"x x x. 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
 Page 47 of 52 | LABREL – 4E | FT CASES B1

concurrent or coordinate jurisdiction possessing equal power to WHEREFORE, the Court REVERSES the decision of the Court of Appeals
grant injunctive relief, applies only when no third-party claimant is and the resolution denying reconsideration.19 In lieu thereof, the Court
involved (Traders Royal Bank v. Intermediate Appellate Court, 133 renders judgment ANNULLING the sale on execution of the subject
SCRA 141 [1984]). When a third-party, or a stranger to the action, property conducted by NLRC Sheriff Anam Timbayan in favor of respondent
asserts a claim over the property levied upon, the claimant may SAMAR-ANGLO and the subsequent sale of the same to Rodrigo Sy
vindicate his claim by an independent action in the proper civil Mendoza. The Court declares the petitioner to be the rightful owner of the
court which may stop the execution of the judgment on property not property involved and remands the case to the trial court to determine the
belonging to the judgment debtor." (Underscoring ours) liability of respondents SAMAR-ANGLO, Rodrigo Sy Mendoza, and
WESTERN GUARANTY CORPORATION to pay actual damages that
in Consolidated Bank and Trust Corp. v. Court of Appeals, 193 SCRA 158
petitioner claimed.
[1991], we ruled that:
Costs against respondents, except the Court of Appeals.1âwphi1.nêt
"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 SO ORDERED.
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 x x x.
"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." (Underscoring 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 reinvindicatory 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.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 reinvidincatory 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
reinvindicatory 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

G.R. No. 120567 March 20, 1998
PHILIPPINE AIRLINES, INC., petitioner, 

vs.

NATIONAL LABOR RELATIONS COMMISSION, FERDINAND PINEDA
and GOGFREDO CABLING, respondents.
MARTINEZ, J.:
Can the National Labor Relations Commission (NLRC), even without a
complaint for illegal dismissal tiled before the labor arbiter, entertain an
action for injunction and issue such writ enjoining petitioner Philippine
Airlines, inc. from enforcing its Orders of dismissal against private
respondents, and ordering petitioner to reinstate the private respondents to
their previous positions?
This is the pivotal issue presented before us in this petition
for certiorari under Rule 65 of the Revised Rules of Court which seeks the
nullification of the injunctive writ dated April 3, 1995 issued by the NLRC
and the Order denying petitioner's motion for reconsideration on the ground
that the said Orders were issued in excess of jurisdiction.
Private respondents are flight stewards of the petitioner. Both were
dismissed from the service for their alleged involvement in the April 3, 1993
currency smuggling in Hong Kong.
Aggrieved by said dismissal, private respondents filed with the NLRC a
petition1 for injunction praying that:
I. Upon filing of this Petition, a temporary restraining order
be issued, prohibiting respondents (petitioner herein) from
effecting or enforcing the Decision dated Feb. 22, 1995, or
to reinstate petitioners temporarily while a hearing on the
propriety of the issuance of a writ of preliminary injunction
is being undertaken;
II. After hearing, a writ of preliminary mandatory injunction
be issued ordering respondent to reinstate petitioners to
their former positions pending the hearing of this case, or,
prohibiting respondent from enforcing its Decision dated
February 22, 1995 while this case is pending adjudication;
III. After hearing, that the writ of preliminary injunction as to
the reliefs sought for be made permanent, that petitioners
be awarded full backwages, moral damages of PHP
500,000.00 each and exemplary damages of PHP
500,000.00 each, attorney's fees equivalent to ten percent
of whatever amount is awarded, and the costs of suit.
Page 48 of 52 | LABREL – 4E | FT CASES B1
On April 3, 1995, the NLRC issued a temporary mandatory
injunction 2 enjoining petitioner to cease and desist from enforcing its
February 22, 1995 Memorandum of dismissal. In granting the writ, the
NLRC considered the following facts, to wit:
. . . that almost two (2) years ago, i.e. on April 15, 1993, the
petitioners were instructed to attend an investigation by
respondent's "Security and Fraud Prevention Sub-
Department" regarding an April 3, 1993 incident in
Hongkong at which Joseph Abaca, respondent's Avionics
Mechanic in Hongkong "was intercepted by the Hongkong
Airport Police at Gate 05 . . . the ramp area of the Kai Tak
International Airport while . . . about to exit said gate
carrying a . . . bag said to contain some 2.5 million pesos in
Philippine Currencies. That at the Police Station. Mr. Abaca
claimed that he just found said plastic bag at the Skybed
Section of the arrival flight PR300/03 April 93," where
petitioners served as flight stewards of said flight PR300; . .
the petitioners sought "a more detailed account of what this
HKG incident is all about"; but instead, the petitioners were
administratively charged, "a hearing" on which "did

not push through" until almost two (2) years after, i.e, "on
January 20, 1995 . . . where a confrontation between Mr.
Abaca and petitioners herein was compulsorily arranged by
the respondent's disciplinary board" at which hearing,
Abaca was made to identify petitioners as co-conspirators;
that despite the fact that the procedure of identification
adopted by respondent's Disciplinary Board was
anomalous "as there was no one else in the line-up (which
could not be called one) but petitioners . . . Joseph Abaca
still had difficulty in identifying petitioner Pineda as his co-
conspirator, and as to petitioner Cabling, he was implicated
and pointed by Abaca only after respondent's Atty.
Cabatuando pressed the former to identify petitioner
Cabling as co-conspirator"; that with the hearing reset to
January 25, 1995, "Mr. Joseph Abaca finally gave
exculpating statements to the board in that he cleared
petitioners from any participation or from being the owners
of the currencies, and at which hearing Mr. Joseph Abaca
volunteered the information that the real owner of said
money was one who frequented his headquarters in
Hongkong to which information, the Disciplinary Board
Chairman, Mr. Ismael Khan," opined "for the need for
another hearing to go to the bottom of the incident"; that
from said statement, it appeared "that Mr. Joseph Abaca
was the courier, and had another mechanic in Manila who
hid the currency at the plane's skybed for Abaca to retrieve

in Hongkong, which findings of how the money was found
was previously confirmed by Mr. Joseph Abaca himself
when he was first investigated by the Hongkong
authorities"; that just as petitioners "thought that they were
already fully cleared of the charges, as they no longer
received any summons/notices on the intended "additional
hearings" mandated by the Disciplinary Board," they were
surprised to receive "on February 23, 1995. . . a
Memorandum dated February 22, 1995" terminating their
services for alleged violation of respondent's Code of
Discipline "effective immediately"; that sometime . . . first
week of March, 1995, petitioner Pineda received another
Memorandum from respondent Mr. Juan Paraiso, advising
him of his termination effective February 3, 1995, likewise
for violation of respondent's Code of Discipline; . . .
In support of the issuance of the writ of temporary injunction, the NLRC
adapted the view that: (1) private respondents cannot be validly dismissed
on the strength of petitioner's Code of Discipline which was declared illegal
by this Court in the ease at PAL, Inc. vs. NLRC, (G.R. No. 85985),
promulgated August 13, 1993, for the reason that it was formulated by the
petitioner without the participation of its employees as required in R.A.
6715, amending Article 211 of the Labor Code; (2) the whimsical, baseless
and premature dismissals of private respondents which "caused them
grave and irreparable injury" is enjoinable as private respondents are left
"with no speedy and adequate remedy at law" except the issuance of a
temporary mandatory injunction; (3) the NLRC is empowered under Article
218 (e) of the Labor Code not only to restrain any actual or threatened
commission of any or all prohibited or unlawful acts but also to require the
performance of a particular act in any labor dispute, which, if not restrained
or performed forthwith, may cause grave or irreparable damage to any
party; and (4) the temporary power of the NLRC was recognized by this
Court in the case of Chemo-Technische Mfg., Inc. Employees Union, DFA,
et. al. vs. Chemo-Technische Mfg., Inc. [G.R. No. 107031, January 25,
1993].
On May 4, 1995, petitioner moved for reconsideration3 arguing that the
NLRC erred:
1. . . . in granting a temporary injunction
order when it has no jurisdiction to issue
an injunction or restraining order since this
may be issued only under Article 218 of
the Labor Code if the case involves or
arises from labor disputes;
Page 49 of 52 | LABREL – 4E | FT CASES B1
2. . . . in granting a temporary injunction
order when the termination of private
respondents have long been carried out;
3. . . . in ordering the reinstatement of
private respondents on the basis of their
mere allegations, in violation of PAL's right
to due process:
4. . . . in arrogating unto itself management
prerogative to discipline its employees and
divesting the labor arbiter of its original and
exclusive jurisdiction over illegal dismissal
cases;
5. . . . in suspending the effects of
termination when such action is exclusively
within the jurisdiction of the Secretary of
Labor;
6. . . . in issuing the temporary injunction in
the absence of any irreparable or
substantial injury to both private
respondents.
On May 31, 1995, the NLRC denied petitioner's motion for reconsideration,
ruling:
"The respondent (now petitioner), for one, cannot validly
claim that we cannot exercise our injunctive power under
Article 218 (e) of the Labor Code on the pretext that what
we have here is not a labor dispute as long as it concedes
that as defined by law, a" (l) "Labor Dispute" includes any
controversy or matter concerning terms or conditions of
employment." If security of tenure, which has been
breached by respondent and which, precisely, is sought to
be protected by our temporary mandatory injunction (the
core of controversy in this case) is not a "term or condition
of employment", what then is?
xxx xxx xxx
Anent respondent's second argument . . . . Article 218 (e)
of the Labor Code . . . empowered the Commission not
only to issue a prohibitory injunction, but a mandatory ("to
require the performance") one as well. Besides, as earlier
discussed, we already exercised (on August 23, 1991) this
temporary mandatory injunctive power in the case of
"Chemo-Technische Mfg., Inc. Employees Union-DFA et.
al. vs. Chemo-Technische Mfg., Inc., et. al." (supra) and
effectively enjoined one (1) month old dismissals by

Chemo-Technische and that our aforesaid mandatory
exercise of injunctive power, when questioned through a
petition for certiorari, was sustained by the Third Division of
the Supreme court per its Resolution dated January 25,
1993.
xxx xxx xxx
Respondent's fourth argument that petitioner's remedy for
their dismissals is "to file an illegal dismissal case against
PAL which cases are within the original and exclusive
jurisdiction of the Labor Arbiter' is ignorant. In requiring as
a condition for the issuance of a "temporary or permanent
injunction" — "(4) That complainant has no adequate
remedy at law;" Article 218 (e) of the Labor Code clearly
envisioned adequacy, and not plain availability of a remedy
at law as an alternative bar to the issuance of an injunction.
An illegal dismissal suit (which takes, on its expeditious
side, three (3) years before it can be disposed of) while
available as a remedy under Article 217 (a) of the Labor
Code, is certainly not an "adequate; remedy at law, Ergo, it
cannot as an alternative remedy, bar our exercise of that
injunctive power given us by Article 218 (e) of the Code.
xxx xxx xxx
Thus, Article 218 (e), as earlier discussed [which
empowers this Commission "to require the performance of
a particular act" (such as our requiring respondent "to
cease and desist from enforcing" its whimsical memoranda
of dismissals and "instead to reinstate petitioners to their
respective position held prior to their subject dismissals") in
"any labor dispute which, if not . . . performed forthwith,
may cause grave and irreparable damage to any party"]
stands as the sole "adequate remedy at law" for petitioners
here.
Finally, the respondent, in its sixth argument claims that
even if its acts of dismissing petitioners "may be great, still
the same is capable of compensation", and that
consequently, "injunction need not be issued where
adequate compensation at law could be obtained".
Actually,
 performed forthwith, may cause grave or irreparable
what respondent PAL argues here is that we need not
interfere in its whimsical dismissals of petitioners as, after
all, it can pay the latter its backwages. . . .
But just the same, we have to stress that Article 279 does
not speak alone of backwages as an obtainable relief for
illegal dismissal; that reinstatement as well is the concern
Page 50 of 52 | LABREL – 4E | FT CASES B1
of said law, enforceable when necessary, through Article
218 (e) of the Labor Code (without need of an illegal
dismissal suit under Article 217 (a) of the Code) if such
whimsical and capricious act of illegal dismissal will "cause
grave or irreparable injury to a party". . . . .4
Hence, the present recourse.
Generally, injunction is a preservative remedy for the protection of one's
substantive rights or interest. It is not a cause of action in itself but merely a
provisional remedy, an adjunct to a main suit. It is resorted to only when
there is a pressing necessity to avoid injurious consequences which cannot
be remedied under any standard of compensation. The application of the
injunctive writ rests upon the existence of an emergency or of a special
reason before the main case be regularly heard. The essential conditions
for granting such temporary injunctive relief are that the complaint alleges
facts which appear to be sufficient to constitute a proper basis for injunction
and that on the entire showing from the contending parties, the injunction is
reasonably necessary to protect the legal rights of the plaintiff pending the
litigation.5 Injunction is also a special equitable relief granted only in cases
where there is no plain, adequate and complete remedy at law.6
In labor cases, Article 218 of the Labor Code empowers the NLRC —
(e) To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor
dispute which, if not restrained or performed forthwith, may
cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such
party; . . ." (Emphasis Ours)
Complementing the above-quoted provision, Sec. 1, Rule XI of the New
Rules of Procedure of the NLRC, pertinently provides as follows:
Sec. 1. Injunction in Ordinary Labor Dispute. — A
preliminary injunction or a restraining order may be granted
by the Commission through its divisions pursuant to the
provisions of paragraph (e) of Article 218 of the Labor
Code, as amended, when it is established on the bases of
the sworn allegations in the petition that the acts
complained of, involving or arising from any labor dispute
before the Commission, which, if not restrained or
damage to any party or render ineffectual any decision in
favor of such party.
xxx xxx xxx
The foregoing ancillary power may be exercised by the
Labor Arbiters only as an incident to the cases pending

before them in order to preserve the rights of the parties
during the pendency of the case, but excluding labor
disputes involving strikes or lockout. 7 (Emphasis Ours)
From the foregoing provisions of law, the power of the NLRC to issue an
injunctive writ originates from "any labor dispute" upon application by a
party thereof, which application if not granted "may cause grave or
irreparable damage to any party or render ineffectual any decision in favor
of such party."
The term "labor dispute" is defined as "any controversy or matter
concerning terms and conditions of employment or the association or
representation of persons in negotiating, fixing. maintaining, changing, or
arranging the terms and conditions of employment regardless of whether or
not the disputants stand in the proximate relation of employers and
employees." 8
The term "controversy" is likewise defined as "a litigated
question; adversary proceeding in a court of law; a civil action or suit, either
at law or in equity; a justiciable dispute."9
A "justiciable controversy" is "one involving an active antagonistic assertion
of a legal right on one side and a denial thereof on the other concerning a
real, and not a mere theoretical question or issue." 10
Taking into account the foregoing definitions, it is an essential requirement
that there must first be a labor dispute between the contending parties
before the labor arbiter. In the present case, there is no labor dispute
between the petitioner and private respondents as there has yet been no
complaint for illegal dismissal filed with the labor arbiter by the private
respondents against the petitioner.
The petition for injunction directly filed before the NLRC is in reality an
action for illegal dismissal. This is clear from the allegations in the petition
which prays for; reinstatement of private respondents; award of full
backwages, moral and exemplary damages; and attorney's fees. As such,
the petition should have been filed with the labor arbiter who has the
original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
(1) Unfair labor practice;
(2) Termination disputes;
(3) If accompanied with a claim for
reinstatement, those cases that workers
may file involving wages, rates of pay,
hours of work and other terms and
conditions of employment;
Page 51 of 52 | LABREL – 4E | FT CASES B1
(4) Claims for actual, moral, exemplary
and other forms of damages arising from
the employer-employee relations;
(5) Cases arising from any violation of
Article 264 of this Code, including
questions involving the legality of strikes
and lockouts; and
(6) Except claims for employees
compensation, social security, medicare
and maternity benefits, all other claims
arising from employer- employee relations,
including those of persons in domestic or
household service, involving an amount
exceeding five thousand pesos
(P5,000.00), whether or not accompanied
with a claim for reinstatement. 11
The jurisdiction conferred by the foregoing legal provision to the labor
arbiter is both original and exclusive, meaning, no other officer or tribunal
can take cognizance of, hear and decide any of the cases therein
enumerated. The only exceptions are where the Secretary of Labor and
Employment or the NLRC exercises the power of compulsory arbitration, or
the parties agree to submit the matter to voluntary arbitration pursuant to
Article 263 (g) of the Labor Code, the pertinent portions of which reads:
(g) When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of
Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission
for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended
or impending strike or lockout as specified in the
assumption or certification order. If one has already taken
place at the time of assumption or certification, all striking
or locked out employees shall immediately resume
operations and readmit all workers under the same terms
and conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the Commission
may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such
orders as he may issue to enforce the same.
On the other hand, the NLRC shall have exclusive appellate jurisdiction
over all cases decided by labor arbiters as provided in Article 217(b) of the
Labor Code. In short, the jurisdiction of the NLRC in illegal dismissal cases
is appellate in nature and, therefore, it cannot entertain the private

respondents' petition for injunction which challenges the dismissal orders of
petitioner. Article 218(e) of the Labor Code does not provide blanket
authority to the NLRC or any of its divisions to issue writs of injunction,
considering that Section 1 of Rule XI of the New Rules of Procedure of the
NLRC makes injunction only an ancillary remedy in ordinary labor
disputes." 12
Thus, the NLRC exceeded its jurisdiction when it issued the assailed Order
granting private respondents' petition for injunction and ordering the
petitioner to reinstate private respondents.
The argument of the NLRC in its assailed Order that to file an illegal
dismissal suit with the labor arbiter is not an "adequate" remedy since it
takes three (3) years before it can be disposed of, is patently erroneous. An
"adequate" remedy at law has been defined as one "that affords relief with
reference to the matter in controversy, and which is appropriate to the
particular circumstances of the case." 13 It is a remedy which is equally,
beneficial, speedy and sufficient which will promptly relieve the petitioner
from the injurious effects of the acts complained of. 14
Under the Labor Code, the ordinary and proper recourse of an illegally
dismissed employee is to file a complaint for illegal dismissal with the labor
arbiter. 15 In the case at bar, private respondents disregarded this rule and
directly went to the NLRC through a petition for injunction praying that
petitioner be enjoined from enforcing its dismissal orders. In Lamb
vs. Phipps, 16 we ruled that if the remedy is specifically provided by law, it is
presumed to be adequate. Moreover, the preliminary mandatory injunction
prayed for by the private respondents in their petition before the NLRC can
also be entertained by the labor arbiter who, as shown earlier, has the
ancillary power to issue preliminary injunctions or restraining orders as an
incident in the cases pending before him in order to preserve the rights of
the parties during the pendency of the case. 17
Furthermore, an examination of private respondents' petition for injunction
reveals that it has no basis since there is no showing of any urgency or
irreparable injury which the private respondents might suffer. An injury is
considered irreparable if it is of such constant and frequent recurrence that
no fair and reasonable redress can be had therefor in a court of law, 18 or
where there is no standard by which their amount can be measured with
reasonable accuracy, that is, it is not susceptible of mathematical
computation. It is considered irreparable injury when it cannot be
adequately compensated in damages due to the nature of the injury itself or
the nature of the right or property injured or when there exists no certain
pecuniary standard for the measurement of damages. 19
In the case at bar, the alleged injury which private respondents stand to
suffer by reason of their alleged illegal dismissal can be adequately
compensated and therefore, there exists no "irreparable injury," as defined
above which would necessitate the issuance of the injunction sought for.
Page 52 of 52 | LABREL – 4E | FT CASES B1
Article 279 of the Labor Code provides that an employee who is unjustly
dismissed from employment shall be entitled to reinstatement, without loss
of seniority rights and other privileges, and to the payment of full
backwages, inclusive of allowances, and to other benefits or their monetary
equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement.
The ruling of the NLRC that the Supreme Court upheld its power to issue
temporary mandatory injunction orders in the case of Chemo-Technische
Mfg., Inc. Employees Union-DFA, et. al. vs. Chemo-Technische Mfg.,
Inc. et. al., docketed as G.R. No. 107031, is misleading. As correctly
argued by the petitioner, no such pronouncement was made by this Court
in said case. On January 25, 1993, we issued a Minute Resolution in the
subject case stating as follows:
Considering the allegations contained, the issues raised
and the arguments adduced in the petition for certiorari, as
well as the comments of both public and private
respondents thereon, and the reply of the petitioners to
private respondent's motion to dismiss the petition, the
Court Resolved to DENY the same for being premature.
It is clear from the above resolution that we did not in anyway sustain the
action of the NLRC in issuing such temporary mandatory injunction but
rather we dismissed the petition as the NLRC had yet to rule upon the
motion for reconsideration filed by petitioner. Thus, the minute resolution
denying the petition for being prematurely filed.
Finally, an injunction, as an extraordinary remedy, is not favored in labor
law considering that it generally has not proved to be an effective means of
settling labor disputes. 20 It has been the policy of the State to encourage
the parties to use the non-judicial process of negotiation and compromise,
mediation and arbitration. 21 Thus, injunctions may be issued only in cases
of extreme necessity based on legal grounds clearly established, after due
consultations or hearing and when all efforts at conciliation are exhausted
which factors, however, are clearly absent in the present case.
WHEREFORE, the petition is hereby GRANTED. The assailed Orders
dated April 3, 1995 and May 31, 1995, issued by the National Labor
Relations Commission (First Division), in NLRC NCR IC No. 000563-95,
are hereby REVERSED and SET ASIDE.
SO ORDERED.