Hijo Resources Corp vs Mijares The CA reversed the NLRC’s Resolution.
The CA reversed the NLRC’s Resolution. ((Under Article 217 of the Labor Code, the Labor
HIJO RESOURCES CORPORATION, Petitioner, v. EPIFANIO P. MEJARES
G.R. No. 208986, January 13, 2016
CARPIO, J.:
FACTS:
Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon, and Cecilio Cucharo
(respondents) were among the complainants, represented by their labor union named
"Nagkahiusang Mamumuo ng Bit, Djevon, at Raquilla Farms sa Hijo Resources Corporation"
(NAMABDJERA-HRC), who filed with the NLRC an illegal dismissal case against petitioner Hijo
Resources Corporation (HRC). Complainants (respondents) alleged that petitioner HRC,
formerly known as Hijo Plantation Incorporated (HPI), is the owner of agricultural lands. In 2000,
HPI was renamed as HRC. In December 2003, HRC's application for the conversion of its
agricultural lands into agri-industrial use was approved. In 2001, complainants were absorbed by
HRC, but they were working under the contractor-growers: Buenaventura Tano (Bit Farm);
Djerame Pausa (Djevon Farm); and Ramon Q. Laurente (Raquilla Farm).
On 1 July 2007, complainants formed their union NAMABDJERA-HRC, which was later
registered with the Department of Labor and Employment (DOLE). On 24 August 2007,
NAMABDJERA-HRC filed a petition for certification election before the DOLE. When HRC
learned that complainants formed a union, the three contractor-growers filed with the DOLE a
notice of cessation of business operations. In September 2007, complainants were terminated
from their employment on the ground of cessation of business operations by the contractor-
growers of HRC.
On 19 September 2007, complainants, represented by NAMABDJERA-HRC, filed a case for
unfair labor practices, illegal dismissal, and illegal deductions with prayer for moral and
exemplary damages and attorney's fees before the NLRC. On 19 November 2007, DOLE Med-
Arbiter Lito A. Jasa issued an Order, dismissing NAMABDJERA-HRC's petition for certification
election on the ground that there was no employer-employee relationship between complainants
and HRC. Complainants did not appeal the Order of Med-Arbiter but pursued the illegal
dismissal case they filed.
On 4 January 2008, HRC filed a motion to dismiss the complaint for illegal dismissal. The motion
to dismiss was anchored on the following arguments: (1) Lack of jurisdiction under the principle
of res judicata; and (2) The Order of the Med-Arbiter finding that complainants were not
employees of HRC, which complainants did not appeal, had become final and executory.
On 5 February 2008, Labor Arbiter Sagmit denied the motion to dismiss and held that res
judicata does not apply. ((The Labor Arbiter ruled that the decision of the Med-Arbiter in a
certification election case, by the nature of that proceedings does not foreclose further dispute
between the parties as to the existence or non-existence of employer-employee relationship
between them. Thus, the finding of Med-Arbiter that no employment relationship exists between
HRC and complainants does not bar the Labor Arbiter from making his own independent finding
on the same issue. The non-litigious nature of the proceedings before the Med-Arbiter does not
prevent the Labor Arbiter from hearing and deciding the case.))
HRC filed with the NLRC a petition for certiorari with a prayer for temporary restraining order,
seeking to nullify the Orders of Labor Arbiter. The NLRC granted the petition.
((The NLRC held that the Med-Arbiter Order dismissing the certification election case on the
ground of lack of employer-employee relationship between HRC and complainants (members of
NAMABDJERA-HRC) constitutes res judicata under the concept of conclusiveness of judgment,
and thus, warrants the dismissal of the case. The NLRC ruled that the Med-Arbiter exercises
quasi-judicial power and the Med-Arbiter's decisions and orders have, upon their finality, the
force and effect of a final judgment within the purview of the doctrine of res judicata.))
Arbiter has original and exclusive jurisdiction over illegal dismissal cases. Although the
proceedings before the Labor Arbiter are also described as non-litigious, the Court of Appeals
noted that the Labor Arbiter is given wide latitude in ascertaining the existence of employment
relationship. Hence, the Court of Appeals concluded that the decision in a certification election
case does not foreclose further dispute as to the existence or non-existence of an employer-
employee relationship between HRC and the complainants.))
ISSUE: Whether the Labor Arbiter, in the illegal dismissal case, is bound by the ruling of the
Med-Arbiter regarding the existence or non-existence of employer-employee relationship
between the parties in the certification election case.
HELD: No. As found by the Court of Appeals, the facts in this case are very similar to those in
the Sandoval case, which also involved the issue of whether the ruling in a certification election
case on the existence or non-existence of an employer-employee relationship operates as res
judicata in the illegal dismissal case filed before the NLRC. In Sandoval, the DOLE
Undersecretary reversed the finding of the Med-Arbiter in a certification election case and ruled
that there was no employer-employee relationship between the members of the petitioner union
and Sandoval Shipyards, Inc. (SSI), since the former were employees of the subcontractors.
Subsequently, several illegal dismissal cases were filed by some members of the petitioner
union against SSI. Both the Labor Arbiter and the NLRC ruled that there was no employer-
employee relationship between the parties, citing the resolution of the DOLE Undersecretary in
the certification election case. The Court of Appeals reversed the NLRC ruling and held that the
members of the petitioner union were employees of SSI. On appeal, this Court affirmed the
appellate court's decision and ruled that the Labor Arbiter and the NLRC erred in relying on the
pronouncement of the DOLE Undersecretary that there was no employer-employee relationship
between the parties. The Court cited the ruling in the Manila Golf11 case that the decision in a
certification election case, by the very nature of that proceeding, does not foreclose all further
disputes between the parties as to the existence or non-existence of an employer-employee
relationship between them. This case is different from the Chris Garments case cited by the
NLRC where the Court held that the matter of employer-employee relationship has been
resolved with finality by the DOLE Secretary, whose factual findings were not appealed by the
losing party. As mentioned earlier, the Med-Arbiter's order in this case dismissing the petition for
certification election on the basis of non-existence of employer-employee relationship was
issued after the members of the respondent union were dismissed from their employment. The
purpose of a petition for certification election is to determine which organization will represent
the employees in their collective bargaining with the employer.12The respondent union, without
its member-employees, was thus stripped of its personality to challenge the Med-Arbiter's
decision in the certification election case. Thus, the members of the respondent union were left
with no option but to pursue their illegal dismissal case filed before the Labor Arbiter. To dismiss
the illegal dismissal case filed before the Labor Arbiter on the basis of the pronouncement of the
Med-Arbiter in the certification election case that there was no employer-employee relationship
between the parties, which the respondent union could not even appeal to the DOLE Secretary
because of the dismissal of its members, would be tantamount to denying due process to the
complainants in the illegal dismissal case. This, we cannot allow.