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[G.R. No. 148279. May 27, 2004]

JENNEVIE H. LIZO, respondent.

At the heart of the controversy is the issue of whether petitioners, by the simple expedient of
arguing substantial justice and miscarriage of justice, may be allowed to disregard the
mandatory 10-day period of perfecting an appeal from the decision of the Labor Arbiter. A
reverberating negative ruling was rendered by both the Court of Appeals and the National
Labor Relations Commission (NLRC).

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, assailing the Decision[1] dated March 30, 2001 and the
Resolution[2] dated May 23, 2001 rendered by the Court of Appeals in CA-G.R. SP No.
59037, entitled Corporate Inn Hotel, Annie Del Rosario and Julie Palinsad vs. Jennevie H.

The undisputed facts of the case are as follows:

On January 25, 1999, Corporate Inn Hotel, petitioner, engaged the services of Jennevie
Lizo, respondent, as a probationary account executive. In such capacity, she was tasked to
deal with clients, entertain customers, and promote patronage of the hotel. However, just a
few weeks after her employment, petitioner received complaints from its clients against her
for undesirable conduct. They also called petitioners attention to her inefficiency in
discharging her duties.

Prompted by such reports, petitioner, on February 8, 1999, evaluated respondents
performance. The evaluation disclosed her inability to deal with hotel guests. Thus, she was
recommended to undergo an additional training under maximum supervision. But barely
twenty-one (21) days after her employment, petitioner terminated her services effective
February 15, 1999.

Aggrieved, respondent filed with the Labor Arbiter a complaint for illegal dismissal and other
monetary claims against petitioner and its officers, Annie Del Rosario and Julie Palinsad,
docketed as NLRC NCR Case No. 00-03-02577-99.

On September 30, 1999, the Labor Arbiter rendered a Decision holding that respondent was
illegally dismissed, thus:

All told, it is the finding of this Arbitration Branch that the imputation against the complainant
are but the product of afterthoughts, if not surmises, and guessworks. The inevitable
conclusion is that complainant was dismissed without just and valid cause and absent due
process. Accordingly, she is entitled to her backwages from February 15, 1999 up to the date
of this decision and to separation pay equivalent to one (1) month salary, hereunder
computed as follows:

Backwages: P6,000.00/mo. x 7.5 mos = P 45,000.00

Separation Pay: at one (1) month pay = P 6,000.00

TOTAL P51,000.00
On the matter of the complainants claim for moral and exemplary damages, this is not
substantiated by the complainant. Mere allegation of illegal dismissal is not enough as it is
required that complainant must prove that bad faith on the part of the respondents attended
her dismissal from employment.

WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
ordering the respondents to pay complainant the sum of P51,000.00.


Upon appeal, the National Labor Relations Commission (NLRC), in a Resolution dated
March 31, 2000, dismissed the same for being late.

Petitioners filed a motion for reconsideration but was denied by the NLRC in a Resolution
dated April 28, 2000.

Consequently, petitioners filed with the Court of Appeals a petition for certiorari.

In a Decision promulgated on March 30, 2001, the Appellate Court affirmed in toto the NLRC
Resolution, ratiocinating thus:

We dismiss the petition.

First. The perfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional. Non-compliance therewith is fatal and it renders the
judgment final and executory. Non-compliance with the required procedure deprives the
appellate court of jurisdiction to alter the final judgment, much less, to entertain the appeal.
The requirements for the perfection of an appeal are intended to discourage employers from
using the appeal to delay or evade their obligations to their employees. It also assures
employees that the money judgment in their favor will be satisfied.

The reglementary period for perfecting an appeal is provided for in Art. 223 of the Labor
Code, to wit:

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

Whereas, the manner for perfecting an appeal is outlined in Section 3(a), Rule VI of the
NLRC New Rules of Procedure, to wit:

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 6 of this Rule; shall be accompanied by 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 requisites aforestated shall not stop
the running of the period for perfecting an appeal. (underscoring ours)

In addition, Art. 223 of the Labor Code, 2nd paragraph, provides that:

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.

petitioner Corporate Inns appeal to the NLRC was filed out of time and petitioner realized this lapse from start but it pleaded for leniency with the NLRC. an appeal is perfected by simultaneously filing a notice of appeal and a memorandum of appeal and by posting an appeal bond. x x x: xxx Unfortunately.Therefore. The issue before us is not novel. this petition for review on certiorari. Hence. From the said Decision. In the instant case. petitioners filed a motion for reconsideration. This lapse compounds petitioners clearly untenable position on its tardy appeal and leaves no doubt in Our minds that indeed petitioners failed in all aspects to perfect its appeal. But while doing so. However. 2001. petitioner has taken great pains to plead for a relaxation of the reglementary period for filing an appeal. the instant petition is hereby DISMISSED and the resolutions of the NLRC. Understandably. the NLRC no longer saw it fit to discuss this requisite due to its conclusion that the appeal was filed out of time. it was incumbent upon petitioner to allege compliance with the required appeal bond in its petition to add more depth to the theory that it has perfected its appeal. WHEREFORE. but was denied by the Court of Appeals in a Resolution dated May 23. So far. none of these circumstances sways Us to relax the rules in favor of petitioner.the posting of an appeal bond. xxx xxx Third. it failed to establish the other requisite for the perfection of an appeal . SO ORDERED. all within the period of ten (10) days from receipt of the questioned decision. but it did not. dated 31 March 2000 and 28 April 2000 are SUSTAINED in toto. as it does now before Us. . Costs against petitioners.

in Peftok Integrated Services. or certain proceedings taken. 2001 of the Court of Appeals in CA-G. [4] Thus. While we may have sidestepped the rule on the statutory or reglementary period for filing an appeal. It is only in highly meritorious cases that this Court opts not to strictly apply the rules and thus prevent a grave injustice from being done. SP No. 2001 and Resolution dated May 23. 59037 are hereby AFFIRMED.[3] The NLRC Rules. . petitioners are mandated to perfect their appeal in the manner and within the period permitted by law and failure to do so renders the judgment of the Labor Arbiter final and executory. we emphasized this caveat: we cannot respond with alacrity to every clamor of injustice and bend the rules to placate a vociferous protestor crying and claiming to be a victim of a wrong. yet. The Decision dated March 30. particularly the requirements for perfecting an appeal within the reglementary period specified in the law. Similarly. are considered absolutely indispensable to the prevention of needless delays and to the orderly and speedy discharge of judicial business. a decision of a Labor Arbiter is final and executory unless appealed to the National Labor Relations Commission by any or both of the parties within ten (10) days from notice of the said Decision. NLRC. and such NLRC rules prescribing the time within which certain acts must be done. WHEREFORE. its appeal having been interposed seven (7) days beyond the 10-day reglementary period. have the force and effect of law.[5] we held: Under Article 223 of the Labor Code.[7] However this exception does not obtain here. In Veterans Philippine Scout Security Agency vs. the petition is DENIED. must be strictly followed as they are considered indispensable interdictions against needless delays and for orderly discharge of judicial business.At the outset.R. Thus. akin to the Rules of Court. the perfection of an appeal within the reglementary period for the same is jurisdictional in character.[6] we considered the appeal of petitioner therein as flawed for being late. Inc. We thus find no compelling reason to reverse the Decision and Resolution of the Court of Appeals. it bears stressing that the right to appeal is a statutory right and one who seeks to avail of the right must comply with the statute or rules. promulgated by authority of law. vs. The rules. National Labor Relations Commission and Roberto De Los Santos.

2008 Decision[1] of the Court of Appeals in CA-G. G. 186984-85 Present: Ynares-Santiago. 2009 denying the motion for reconsideration. On May 11. Nachura.: Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court is the October 27. J. to give due course to their appeal and to conduct further proceedings. directing them to post a bond of P10 Million. September 18. G. SP Nos. .x DECISION YNARES-SANTIAGO.R.R. Jr. 2009 x ---------------------------------------------------------------------------------------. EGI-MANAGERS. signed a five- year employment contract as Executive Vice-President of respondent EGI Managers. and E.Chico-Nazario. Nos. Velasco.. INC.versus . Promulgated: Respondents. EULALIO GANZON. J. JJ.SO ORDERED.. INC. 1999. and ordering the National Labor Relations Commission (NLRC). GANZON. THIRD DIVISION ANDREW JAMES MCBURNIE. 178034 & 178117. and Peralta. Petitioner. . an Australian national.R. petitioner Andrew James McBurnie. 90845 and 95916. Inc. Also assailed is the Resolution[2] dated March 3. granting respondents Motion to Reduce Appeal Bond. Nos. (Chairperson).

[4] On June 7. and to engage other hotel management groups. that they agreed in principle with no assurance as to its funding. through its President respondent Eulalio Ganzon. if necessary.[5] On September 8.00 as salary and benefits for the unexpired term of the contract.[3] McBurnies responsibilities were to oversee the general management of the companys hotels and resorts within the Philippines.[10] Thus.(EGI). McBurnie furnished Manjo Martinez.[13] On November 5. timeline and office layout. 2002. 2004.Cebu. 1999. Labor Arbiter Salithmar Nambi rendered a decision declaring petitioners dismissal illegal and ordering respondents to pay US$985. review the operational performance of the hotels and resorts. petitioner featured in an accident that fractured his skull and necessitated his confinement at the Makati Medical Center.00 as moral and exemplary damages. EGIs Vice President. he left for Australia for medical treatment and never returned.000.[8] On November 1.[7] Lastly.000. petitioner filed a complaint for illegal dismissal with prayer for the payment of his salary and benefits for the unexpired term of the contract.Cebu and requested that he be given access to the general ledgers to verify the findings. he requested respondent Ganzon to be his sponsor for his alien work permit. respondents contended that there never existed an employer- employee relationship between them and petitioner. he furnished respondent Ganzon the Monthly Profit and Loss Statement of EGI for the year 2000.[15] and . that the Employment Contract was executed with the understanding that the same shall be used only for alien work permit and visa applications. P2. a concept paper regarding the management philosophy and structure of Leisure Experts International.162. 1999. 1999. and make recommendations to improve profitability. he submitted to respondent Ganzon his ten-year financial projection with debt servicing for the Coronado Beach . and likewise informed respondents that he had already used his personal money to finance the operation. 2004. with its staffing budget. damages and attorneys fees. and attorneys fees equivalent to 10% of the total monetary award. efficiency and reputation. and considering that no permit was issued to petitioner. supervise the present and future constructions of its hotel and resort properties. respondents filed before the NLRC a Memorandum of Appeal[14] and Motion to Reduce Bond.[11] In their Position Paper.[12] On September 30. that petitioner was employed at Pan Pacific Hotel when he proposed to respondent Ganzon to jointly put up and invest in a company that will professionally manage hotels. that after petitioner left Pan Pacific Hotel. petitioner was informed by respondent Ganzon that his services were no longer needed since the project had been permanently discontinued. 1999. or 10 days after receipt of the Labor Arbiters decision.[9] While recuperating from his injuries in Australia.[6] He also completed the audit of the EGI Maribago Resort . on October 4. he also expressed his concern on the failure of EGI to release funds for the proper operation of the business. on September 29.

the Court of Appeals issued a TRO enjoining the NLRC from enforcing its March 8.R. 2005.000.083. with the premeditated intention to render the employer incapable of posting an appeal bond and consequently deprive him of the right to appeal. otherwise the appeal shall be dismissed. However. Instead of complying with the order of the NLRC. (TRO)[19] which was docketed as CA-G.[26] Petitioner assailed the issuance of the writ before the Supreme Court. 2005.[27] .R.R. 2006.R.[23] respondents filed with the Court of Appeals a petition for certiorari with prayer for issuance of TRO and/or writ of preliminary injunction. in view of the foregoing.[16] In an Order[17] dated March 31.00 together with the other requirements under Section 6. and its June 30.[24] On December 8. Rule VI of the NLRC Rules of Procedure within a non- extendible period of 10 days from receipt thereof. 2005 and July 15. SP No. respondents were again ordered to post the additional appeal bond within another non-extendible period of 10 days from receipt thereof.00.[21] Meanwhile. Complainants Ex-Parte Motion for Entry of Judgment and to Remand the Records to the Labor Arbitration Branch of origin is DENIED for being premature. They argued that the awards of the Labor Arbiter were null and excessive.000. 2006 Resolution denying the motion for reconsideration thereof.910. respondents appeal is hereby DISMISSED for failure to post additional bond as directed by the Commission and as mandated by law.[22] Following the denial by the NLRC of their motion for reconsideration. 2005 Orders. respondents filed on August 12. 178034 & 178117. 95916 and was ordered consolidated with CA-G. 90845. a TRO effective for 60 days was issued enjoining the NLRC from enforcing its March 31. 2006 Resolution dismissing respondents appeal. the NLRC denied the motion to reduce bond and ordered respondents to post an additional bond of P54. SP No. thus: WHEREFORE. a petition for certiorari and prohibition with the Court of Appeals with prayer for issuance of a preliminary injunction and/or temporary restraining order.[25] On May 29. it issued a Writ of Preliminary Injunction after respondents posted an injunction bond of P10. the NLRC dismissed their appeal.[20] On September 8. it was dismissed for submitting an affidavit of service which failed to show a competent evidence of affiants identity. which was docketed as CA-G. SO ORDERED. which was docketed as G.00. 2005. on March 8. 2006. 2005. SP No. 2007. Respondents moved for reconsideration but it was denied in an Order[18] dated July 15. after the TRO expired and respondents still failed to post additional bond.000. 90845.posted as bond the amount of P100. Nos.

[28] Petitioners motion for reconsideration was denied in a Resolution[29] dated March 3. 95916 are GRANTED. The NLRC is hereby DIRECTED to give due course to petitioners appeal in CA GR SP No.000. this petition for review on certiorari raising the sole issue of: WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN FINDING THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION WHEN IN FACT IT MERELY FOLLOWED AND IMPLEMENTED THE VALID. the Court of Appeals rendered the assailed Decision granting respondents Motion to Reduce Appeal Bond and directing them to post an appeal bond of P10. d) that respondents not only refused to post appeal bond within the prescribed period but the ground relied upon for the reduction thereof. CLEAR AND UNQUESTIONED PROVISION OF THE LABOR CODE.000. was not meritorious. 2009. Hence. 90845 and the petition for certiorari docketed as CA GR SP No.000. thus depriving the respondents their right to appeal the Labor Arbiters decision. which was likewise ordered to give due course to the appeal and to conduct further proceedings. RULE VI OF THE NLRC RULES OF PROCEDURE WHICH IMPLEMENTATION IS IN ACCORD WITH THE JURISPRUDENCE SET BY THE SUPREME COURT IN THE PERFECTION OF APPEALS IN LABOR CASES. b) that the rules on perfection of appeals must be strictly applied. Article 223 of the Labor Code provides: . 6. on October 27.Meanwhile. the petition for certiorari and prohibition docketed as CA GR SP No.00.000. Petitioners Motion to Reduce Appeal Bond is GRANTED. SO ORDERED. to wit: the awards were patent nullity and excessive. thus: WHEREFORE. Petitioners are hereby DIRECTED to post appeal bond in the amount of P10. c) that the period for posting the bond cannot be made to depend on the discretion of the party. SPECIFICALLY ARTILE 223 AND SEC. 2008. The petition is impressed with merit.[30] Petitioner contends a) that the Court of Appeals erred in holding that the NLRC committed grave abuse of discretion when it outrightly dismissed the motion to reduce appeal bond without fixing a reasonable amount therefor. 95916 which is ordered REMANDED to the NLRC for further proceedings. in view of the foregoing.00 with the NLRC.

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.[31] Moreover. if he desires to appeal. (Emphasis supplied) 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. 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. but not to the compulsory posting of an appeal bond. resolutions or orders of the Labor Arbiter and in case of a decision of the Regional Director within five (5) calendar days from . The meaning and the intention of the legislature in enacting a statute must be determined from the language employed. then there is no room for construction. Decisions.Article 223. resolutions or orders of the Labor Arbiter shall be final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions.[33] The pertinent provisions state: RULE VI APPEALS SECTION 1. PERIODS OF APPEAL. awards. Decisions. Appeal. This requirement is intended to assure the workers that if they prevail in the case.[32] The jurisdictional principle and the mandatory nature of the appeal bond posted within the 10-day reglementary period are reaffirmed by the New Rules of Procedure of the NLRC. they will receive the money judgment in their favor upon the dismissal of the employers appeal. and where there is no ambiguity in the words used. the filing of the bond is not only mandatory but a jurisdictional requirement as well. Non-compliance therewith renders the decision of the Labor Arbiter final and executory. that must be complied with in order to confer jurisdiction upon the NLRC. It is intended to discourage employers from using an appeal to delay or evade their obligation to satisfy their employees' just and lawful claims. the word may refers to the perfection of an appeal as optional on the part of the defeated party. x x x xxxx In case of a judgment involving a monetary award. The lawmakers clearly intended to make the bond a mandatory requisite for 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. On the other hand. 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 employers appeal may be perfected. awards. or orders.

falls on a Saturday. The appeal bond shall either be in cash or surety in an amount equivalent to the monetary award. the last day to perfect the appeal shall be the next working day. this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds. an appeal by the employer may be perfected only upon the posting of a cash or surety bond. the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day 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. otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. exclusive of damages and attorneys fees. xxxx SECTION 6. 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. Although they posted an initial appeal bond of P100. and (2) a reasonable amount in relation to the monetary award is posted by the appellant. or orders.[35] The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10 day reglementary period. In case the decision of the Labor Arbiter or the Regional Director involves a monetary award. the correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day period. as the case may be.[36] Records show that respondents filed their Memorandum of Appeal and Motion to Reduce Appeal Bond on the 10th or last day of the reglementary period.receipt of such decisions. (Emphasis supplied) Thus. resolutions.162.000. If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed. BOND. or would deem such insufficient posting as sufficient to perfect the appeal.[34] While the bond may be reduced upon motion by the employer. the same was grossly inadequate compared to the monetary awards of US$985.00 representing salaries and benefits for the unexpired .00. If the 10th or 5th day. 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. 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. Sunday or a holiday.

[37] the Court held. the alleged harshness of the award is not self-evident. these rules as embodied in the Labor Code and the NLRC Rules of Procedure impose a burden on the employer intending to appeal the decision of the labor arbiter. and with premeditated intention to render respondents incapable of posting an appeal bond and deprive them of the right to appeal. In Computer Innovations Center v.portion of the contract. At the same time. there is no basis in respondents contention that the awards of the Labor Arbiter were null and excessive. National Labor Relations Commission. and that the monetary award was too harsh and unfounded. Within the ten (10)-day reglementary period. This observation undercuts the notion of financial hardship as a justification for the inability to timely post the required bond. as in this case. which will then require the employer to pay a percentage of the award in exchange for a bond securing the full amount. it might be difficult to immediately obtain the required bond pending ascertainment by the bonding company that the employer holds sufficient security in case the bond is subsequently executed.000. Yet it is highly probable that should the employer take the effort to secure the cash or surety bond immediately upon receipt of the decision of the Labor Arbiter. Indeed.[38] It was further held therein that: Admittedly. thus: The grounds cited for reduction of the appeal bond were the great possibility of the reversal of the [Labor Arbiters] decision in the light of the serious errors in the findings of fact and in the application of the law. P2. especially if. such bond would be available within the ten (10)-day reglementary period.000 as moral and exemplary damages and attorneys fees equivalent to the total monetary award. The facility in obtaining the bond is highly dependent on circumstances particular to the employer.[39] (Emphasis supplied) . Further. the mere allegation of the decision as purportedly erroneous in fact or in law cannot serve to mitigate the appeal bond requirement. the Court understands that especially in cases wherein the monetary award is significant in relation to the employers assets. It also does not escape judicial notice that the cash/surety bond requirement does not necessitate the employer to physically surrender the entire amount of the monetary judgment. the employer has to prepare a memorandum of appeal and to secure a cash or surety bond equivalent to the monetary award in the judgment appealed from. Just about any aggrieved employer can invoke such grounds. Neither could the allegation that the monetary award was too harsh or unfounded unsettle the appeal bond requirement absent concrete proof. It is under these premises that petitioners arguments should bear scrutiny. The usual procedure is for the employer to obtain the services of a bonding company.

The requirements for perfecting an appeal must. be strictly followed. much more with the Court of Appeals. respondents cannot be allowed to seek refuge in a liberal application of the rules.R. are REINSTATED and AFFIRMED. The March 8. Nonetheless. The Decision of the Court of Appeals in CA-G. 042913-05 dismissing respondents appeal for failure to perfect an appeal and denying their motion for reconsideration.[41] To reiterate. 2009 Resolution denying petitioners motion for reconsideration.[43] Thus.[40] but none obtains in this case. so does the winner also have the correlative right to enjoy the finality of the decision. Time and again. as a rule. 2008 granting respondents Motion to Reduce Appeal Bond and ordering the National Labor Relations Commission to give due course to respondents appeal. we allow a relaxation in the application of the rules. respectively.The failure of the respondents to comply with the requirement of posting a bond equivalent in amount to the monetary award is fatal to their appeal. are REVERSED and SET ASIDE. While in certain instances. their appeal should have been dismissed outright for not having been perfected on time. 90845 and 95916 dated October 27. the propriety of the monetary awards of the Labor Arbiter is already binding upon this Court. On this score alone. The NLRC even bent backwards by entertaining the motion for reconsideration and even granted respondents another 10 days within which to post the appeal bond. For filing their motion only on the final day within which to perfect an appeal. therefore. the full discretion to grant or deny their motion to reduce the amount of the appeal bond. it has been held that the right to appeal is not a constitutional right. Hence.[42] Just as a losing party has the privilege to file an appeal within the prescribed period. The NLRC had. However. parties who seek to avail themselves of it must comply with the statutes or rules allowing it. respondents failed to post the additional bond and instead moved for reconsideration. . WHEREFORE. SP Nos. the petition is GRANTED. nor for the respondents to post the full amount of the bond. Under such circumstance. The records show that after the motion to reduce appeal bond was denied. the NLRC still allowed respondents a new period of 10 days from receipt of the order of denial within which to post the additional bond. The finding of the labor tribunal that respondents did not present sufficient justification for the reduction thereof cannot be said to have been done with grave abuse of discretion. respondents did not take advantage of this liberality when they persistently failed and refused to post the additional bond despite the extensions given them. 2006 Resolutions of the National Labor Relations Commission in NLRC NCR CA NO. without risk of summary dismissal for non-perfection of appeal. but a mere statutory privilege. Such requirements are considered indispensable interdictions against needless delays and are necessary for the orderly discharge of the judicial business. The liberal interpretation and application of rules apply only in proper cases of demonstrable merit and under justifiable causes and circumstances. we never intend to forge a weapon for erring litigants to violate the rules with impunity. Failure to perfect the appeal renders the judgment of the court final and executory. perfection of an appeal in the manner and within the period permitted by law is mandatory and jurisdictional. and its March 3. 2006 and June 30. there is neither way for the NLRC to exercise its discretion to grant or deny the motion.

Petitioner. versus Edgardo Gumaru. JACINTO (Formerly President of F. in NLRC-NCR Case No. Inc. Jr. DECISION DEL CASTILLO.R.). 2004.R. Inc.: "When a judgment has been satisfied. SP No. EDGARDO* GUMARU. Jacinto Group. and the National Labor Relations Commission. SECOND DIVISION G.1 and "there are no more proceedings to speak of inasmuch as these were terminated by the satisfaction of the judgment. 191906 June 2. J. 2009 Resolution4 of the Court of Appeals (CA) in CA-G. premises considered. respondents are hereby jointly and severally liable to pay complainant the following: ." as well as its March 24. Respondents.SO ORDERED. P. Inc.. 00-06-07542-037 (the labor case). a Decision6 was rendered in favor of respondent Eduardo Gumaru. 2010 Resolution5 denying the petitioner's Motion for Reconsideration. Jacinto (Former President of F Jacinto Group. Petitioner. Jacinto and F. Respondent. 2014 JOSELITO MA. P. P."2 This Petition for Review on Certiorari3 seeks to set aside the November 5. JR. Jr. Jacinto Group. No. entitled "Joselito Ma. 111098. it passes beyond review". the dispositive portion of which reads: WHEREFORE. Factual Antecedents On December 6. vs.). and against petitioner Joselito Ma.

Inc. 3 mos.00 B. 2005. By virtue of such alias . 2000.9 Thus.000.00 3.00 4. A Second Alias Writ of Execution was issued and returned when the first one expired.10 On February 6. However.969.00 C. Other monetary claims.000.00 x 2 x 10 years = P1. unpaid wages & allowance = P133. Moral Damages in the sum of P100.00 5. 10% of all sums accruing shall be adjudged as attorney’s fees.000. A.1. Jacinto Group. SL/VL for 2000 = 34. 2005.000. this was the finding of the NLRC in its Resolution dated September 30. Separation pay based on two months per year of service.00 2. the appeal was not perfected for failure to post the proper cash or surety bond. 2006. SO ORDERED. filed an appeal with the National Labor Relations Commission (NLRC). a Writ of Execution11 was issued in the labor case. P50.101. the December 6. 13th month pay for 2000 = 24.944. It is understood that the withholding of the separation benefits plus other monetary claims shall earn legal interest of 12% per annum from the time [they were] unlawfully withheld on September 01. 2004 Decision became final and executory. Exemplary Damages in the sum of P500.000.8 Petitioner and F. Entry of judgment was issued by the NLRC on November 23.

2008 Resolution. 2008. 2008. that the writ has a life of five years. 2008 or July 4. On June 20. 453 SCRA 423 quoting section 14 of the Revised Rules of Court. petitioner filed an Extremely Urgent Motion to Lift and Annul Levy on Execution12 praying. The decretal portion of the Resolution states: WHEREFORE. and was scheduled to be sold at auction on June 27. real property belonging to petitioner – located in Baguio City and covered by Original Certificate of Title No. Roberto Endina. the NLRC Sheriff is hereby ORDERED to proceed with the auction sale set on June 27.14 The Subject Resolutions of the National Labor Relations Commission Petitioner appealed the Labor Arbiter’s June 26. The Labor Arbiter is also hereby ordered to oversee the proper implementation and execution of the judgment award in this case. 2008 at 10:00 AM before the Register of Deeds of Baguio City. that the scheduled June 27. thus: On June 20.2008 Order to the NLRC. WHEREFORE.15set aside the same. SO ORDERED. 2007 and pursuant to the Supreme Court’s declaration in the case of Merlinda Dagooc vs. SO ORDERED. Finding that the writ of execution was issued on September 07.16 . among others. the Labor Arbiter issued an Order13 denying petitioner’s Extremely Urgent Motion to Lift and Annul Levy on Execution. Let the records be remanded to the Labor Arbiter of origin for further execution proceedings. respondents filed a Motion to Lift and Annul levy on execution on the ground that the writ of execution served had already elapsed. and that the execution process covered by the Second Alias Writ of Execution be invalidated. On June 26. the instant Motion is hereby DENIED. in a November 28. premises considered. 2008.writ. P-2010 – was levied upon. the Order appealed from is hereby SET ASIDE and respondents-appellants’ Motion to Lift and Annul Levy is GRANTED. 2008 auction sale be restrained. 2008. premises considered. which.

Honolulu. Hawaii. in violation of Section 5. proceeding. The Assailed Resolutions of the Court of Appeals Petitioner went up to the CA on certiorari.17 the NLRC stood its ground.20 arguing that a verification signed by counsel constitutes adequate and substantial compliance under Sections 4 and 5. 2009. 28-91. or claim is pending before the Supreme Court. or any Division thereof. Daos. requisite such that an improper verification or certification against forum-shopping is not a fatal defect. On November 5. Daos. Ronald Mark S. Court of Appeals. The Petition18 in CA-G. 2008 and July 27. he will state the status thereof. Thus. 2009 Resolution. but in a July 27. Ronald Mark S. the CA issued the first assailed Resolution.21 verification is merely a formal. and that he read the contents of the CA Petition and affirm that they are true and correct and undisputed based on his own personal knowledge and on authentic records. was executed and signed by petitioner’s counsel Atty. which held thus: The Verification and Certification of Non-Forum Shopping. – attesting that he caused the preparation of the CA Petition. if there is any other action or proceeding which is either pending or may have been terminated. but by his counsel Atty.S. Accordingly. the duty to certify under oath is strictly addressed to petitioner which in this case is herein petitioner Joselito P.22 Petitioner attached a copy of an Affidavit23 – acknowledged before the Hon. to the best of his knowledge. 2009 Resolutions of the NLRC. if he should thereafter . 28-91 inutile. and not jurisdictional. or any division thereof. Paul Raymond Cortes. the petition is DENIED DUE COURSE and DISMISSED. assailing the November 28. In said Affidavit. Court of Appeals. Jacinto and not his counsel to [sic] Atty. tribunal or agency.Petitioner moved for partial reconsideration.19 Petitioner filed his Motion for Reconsideration. or filed any claims involving the same issues in the Supreme Court. Philippine Consulate General. Daos. which accompanied the petition at bar. U. SP No. to allow the delegation of said duty to anyone would render Supreme Court Revised Circular No. petitioner further certified that he has not commenced any other action or proceeding. Rule 7 of the 1997 Rules of Civil Procedure. SO ORDERED. 111098 contained a verification and certification of non-forum shopping that was executed and signed not by petitioner. Ronald Mark S. or in any other court.Rule 7 of the Revised Rules of Court. Pursuant to Supreme Court Revised Circular No.R. or in any court. tribunal or agency. Consul. no such other action.A.

or any division thereof.learn that a similar action."24 Thus. A PARTY UNABLE TO SIGN THE CERTIFICATION AGAINST FORUM SHOPPING CAN AUTHORIZE HIS COUNSEL TO SIGN THE CERTIFICATION. 2009 Resolution and excuse his procedural oversight in respect of the improper verification and certification in his CA Petition. AS IN THE CASE AT BAR. IN ANY EVENT. which thus constrained him to resort to the execution of a sworn statement in lieu of his actual verification and certification as required under the Rules. THE COURT OF APPEALS SHOULD NOT HAVE DISMISSED THE SUBJECT PETITION. stating that a writ of certiorari is merely a "prerogative writ. 2010. PETITIONER EFFECTIVELY EMPOWERED HIS COUNSEL TO EXECUTE THE REQUIRED VERIFICATION AND CERTIFICATION. IN HIS AFFIDAVIT AND SPECIAL POWER OF ATTORNEY. proceeding or claim has been filed or is pending before the Supreme Court. never demandable as a matter of right. IT AFFECTS ONLY THE FORM OF PLEADINGBUT DOES NOT RENDER THE PLEADING FATALLY DEFECTIVE. IN SUBSTANTIAL COMPLIANCE WITH THE REQUIREMENT OF VERIFICATION AND CERTIFICATION. and could not return on account of his physical condition. NOT A JURISDICTIONAL. MERITED THE RELAXATION OF THE TECHNICAL RULES ONVERIFICATION AND CERTIFICATION.THE REQUIREMENT OF VERIFICATION IS ALSO DEEMED SUBSTANTIALLY COMPLIED WITH WHEN THE AFFIANT ACTED IN GOOD FAITH AND X X X [POSSESSES] X X X SUFFICIENT KNOWLEDGE TO TRUTHFULLY ATTEST THAT THE ALLEGATIONS ARE TRUE AND CORRECT. MOREOVER. Court of Appeals. or in any court. Hence. IN ANY CASE. Issues Petitioner raises the following issues: 4. and implored the appellate court to reconsider its November 5. PETITIONER SUBSEQUENTLY SUBMITTED THE NECESSARY DOCUMENT. Daos’s acts done on his behalf relative to the labor case and the filing of the CA Petition. On March 24. tribunal or agency. VERIFICATION IS A FORMAL. Petitioner explained further that he was out of the country. the present Petition was instituted. never issued except in the exercise of judicial discretion.REQUISITE. Petitioner likewise ratified Atty. the CA issued the second assailed Resolution denying petitioner’s Motion for Reconsideration. he undertakes to promptly report the fact within five days from notice thereof. BEING ABROAD AND PHYSICALLY UNABLE TO TRAVEL TO THE NEAREST CONSULAR OFFICE. VERIFICATION BY COUNSEL IS LIKEWISE ADEQUATE AND SUBSTANTIALLY COMPLIANT.1. he who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules. . PETITIONER.

Petitioner asserts that. Since the Labor Arbiter’s Decision has not attained finality.27 the said procedure is allowed. Petitioner therefore prays that the Court annul and set aside the assailed Resolutions of the CA and order the reinstatement of his Petition for Certiorari in the appellate court. authorizing the latter to file the Petition in CA-G. THE MERITS. 2005 Resolution which dismissed his appeal for failure to post the required bond and thus perfect the appeal. 2004 DECISION. He asserts that the NLRC committed grave abuse of discretion in issuing its assailed November 28.28 respondent contends that with the dismissal of petitioner’s certiorari petition by the CA. and thus may not be corrected by resorting to a Petition for Review under Rule 45. SPECIFICALLY. petitioner in his Petition and Reply26 argues that if. Which is exactly what petitioner did: he executed a special power of attorney in favor of his counsel. Petitioner next argues that there are compelling reasons to grant his Petition for Certiorari. NOT TO MENTION GRAVE INJUSTICE.R. THE SAID DECISION CANNOT BE IMPLEMENTED AND EXECUTED BECAUSE IT HAS NOT ATTAINED FINALITY AND JURIDICAL EXISTENCE. WHO WILL BECOMPELLED TOSATISFY A JUDGMENT THAT OBVIOUSLY HAS NOT ATTAINED FINALITY AND JURIDICAL EXISTENCE. TO PETITIONER.25 Petitioner’s Arguments Essentially.2. THAT IN THE ABSENCE OF A PRIOR VALID SERVICE ON PETITIONER OF THE RESOLUTION SUPPOSEDLY DISPOSING OF HIS APPEAL OF THE DECEMBER 6. THE COURT OF APPEALS SHOULD HAVE GIVEN DUE COURSE TO THE SUBJECT PETITION. a party is unable to sign the verification and certification against forum-shopping. IF NOT CORRECTED. IS APPARENT.4. Atty. the NLRC may not direct the Labor Arbiter to conduct execution proceedings below. SPECIAL CIRCUMSTANCES AND COMPELLING REASONS FOR THE ALLOWANCE OF THE SUBJECT PETITION. 111098 and thus sign the verification and certification against forum-shopping contained therein. Respondent . going by the dispositions of the Court in past controversies. Daos. execution proceedings could not commence. for reasonable or justifiable reasons. SP No. claiming that the December 6. 2004 Decision of the Labor Arbiter had not attained finality since the NLRC failed to furnish him with a copy of its September 30. 2008 and July 27. he could execute a special power of attorney authorizing his lawyer to execute the verification and sign the certification on his behalf. it is for all intents and purposes deemed to have never been filed. IT WOULD CAUSE GREAT AND IRREPARABLE DAMAGE AND INJURY. Respondent’s Arguments In his Comment. 2009 Resolutions remanding the case to the Labor Arbiter for further proceedings on execution.

Empleo. he may execute a special power of attorney designating his counsel of record to sign the Petition on his behalf. verification and certification against forum shopping: 1) A distinction must be made between non-compliance with the requirement on or submission of defective verification. Our Ruling The Court finds that the Petition has become moot and academic. 2) As to verification. and non-compliance with the requirement on or submission of defective certification against forum shopping. in consistent violation of the Court’s Circular No. and when matters alleged in the petition have been made in good faith or are true and correct.reiterates the view taken by the CA that certiorari under Rule 65 is a prerogative writ that is not demandable as a matter of right. 3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification. which he prays the Court to deny. but by his counsel.1âwphi1 Respondent cites that he is already 71 years old.29 this view was taken: For the guidance of the bench and bar. 28-91 and Rule 7 of the 1997 Rules of Civil Procedure. . It is true. the Court restates in capsule form the jurisprudential pronouncements already reflected above respecting noncompliance with the requirements on. yet petitioner continues to undermine execution of the judgment rendered in the labor case through the instant Petition. as petitioner asserts. non-compliance therewith or a defect therein does not necessarily render the pleading fatally defective. that if for reasonable or justifiable reasons he is unable to sign the verification and certification against forum shopping in his CA Petition. Respondent notes further that the Verification and Certification against forum-shopping accompanying the instant Petition was not signed by petitioner. In Altres v. The court may order its submission or correction or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be served thereby. or submission of defective.

In a May 24."33 With the above development in the case. unless there is a need to relax the Rule on the ground of "substantial compliance" or presence of "special circumstances or compelling reasons. in which case. is generally not curable by its subsequent submission or correction thereof. satisfaction being the last act and the end of the proceedings. for reasonable or justifiable reasons. H. those who did not sign will be dropped as parties to the case. a judgment debtor who acquiesces to and voluntarily complies with the judgment is estopped from taking an appeal therefrom.31 respondent informed this Court that the judgment award has been satisfied in full. FIRST DIVISION . the party-pleader is unable to sign. while the Court takes the petitioner's side with regard to the procedural issue dealing with verification and the certification against forum shopping. however. there are no more proceedings to speak of inasmuch as these were terminated by the satisfaction of the judgment. 6) Finally. unlike in verification. 2011 Manifestation. it nonetheless appears that the Petition has been overtaken by events. hence. however.4) As to certification against forum shopping.30 (Emphasis supplied) However. the signature of only one of them in the certification against forum shopping substantially complies with the Rule. The petitioner does not dispute this claim. the labor case is now deemed ended. the Petition is DENIED for being moot and academic." 5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case. otherwise."32 And "when a judgment has been satisfied. Under reasonable or justifiable circumstances. The satisfaction of the judgment in full has placed the case beyond the Court's review. he must execute a Special Power of Attorney designating his counsel of record to sign on his behalf. not by his counsel. the case is deemed terminated once and for all. and payment or satisfaction of the obligation thereby established produces permanent and irrevocable discharge. "It is axiomatic that after a judgment has been fully satisfied."34 WHEREFORE. the certification against forum shopping must be executed by the party-pleader. "Indeed. as when all the plaintiffs or petitioners share a common interest and invoke a common cause of action or defense. SO ORDERED. non-compliance therewith or a defect therein. it passes beyond review. the instant Petition is rendered moot and academic.

respondent Bienvenido S. Respondents. On November 29. 2000. Bautista. Inc. J. and/or BIENVENIDO BAUTISTA. DECISION BERSAMIN. an investigating body was formed. . KRAFT FOOD PHILS. Following the submission of her written explanation. she gradually rose from the ranks. she was placed under preventive suspension with pay. vs. Ultimately. The client may not deny her attorney such just compensation. an attorney is entitled to be properly compensated for the professional services rendered for the client. 1999. 1988. (KFPI) hired Czarina Malvar (Malvar) as its Corporate Planning Manager. Antecedents On August 1.: Although the practice of law is not a business. but has mutated into a dispute over attorney's fees between the winning employee and her attorney after she entered into a compromise agreement with her employer under circumstances that the attorney has bewailed as designed to prevent the recovery of just professional fees. as Chairman of the Board of KFPI and concurrently the Vice President and Area Director for Southeast Asia of KFI.. she was served a notice of termination. From then on. In due time. 2013 CZARINA T. 183952 September 9. sent Malvar a memo directing her to explain why no administrative sanctions should be imposed on her for possible breach of trust and confidence and for willful violation of company rules and regulations. KRAFT FOODS INTERNATIONAL. The Case The case initially concerned the execution of a final decision of the Court of Appeals (CA) in a labor litigation.KFPI’s mother company. MALVAR. No. Petitioner. Kraft Foods (Phils. who is bound by her express agreement to duly compensate the attorney. on March 16.G.). becoming in 1996 the Vice President for Finance in the Southeast Asia Region of Kraft Foods International (KFI). INC.R.

75.627.Obviously aggrieved. The RCU’s computation ultimately arrived at the total sum of P41. the NLRC affirmed the decision of the Labor Arbiter but additionally ruled that Malvar was entitled to "any and all stock options and bonuses she was entitled to or would have been entitled to had she not been illegally dismissed from her employment. but the NLRC denied their motion to that effect. viz: WHEREFORE. 69660). 2005.2 KFPI and Bautista sought the reconsideration of the NLRC’s decision.378.786. Reyno issued an order.11. 2001.28 . 69660 did not include.3 Undaunted. and ordered her reinstatement.213. sick leave pay. In a decision dated April 30. Separation Pay 8/1/88-1/26/05 = 16 yrs P344.83 x 16 = 5. and the payment of her full backwages. KFPI and Bautista assailed the adverse outcome before the CA on certiorari (CA-G. 13th month pay). the petition for certiorari was dismissed by the CA on December 22. and also reducing the amounts awarded as moral and exemplary damages. the same are in order. the same are hereby recomputed as follows: 1. Malvar moved for the issuance of a writ of execution.5 The Executive Labor Arbiter then referred the case to the Research and Computation Unit (RCU) of the NLRC for the computation of the monetary awards under the judgment. premises considered." as well as to moral and exemplary damages. insofar as the computation of her backwages and other monetary benefits (separation pay.4 After the judgment in her favor became final and executory on March14. in so far as the computation of complainant’s other benefits and allowances are concerned. 2006.513. On October 22. SP No. Malvar filed a complaint for illegal suspension and illegal dismissal against KFPI and Bautista in the National Labor Relations Commission (NLRC). contending that the NLRC thereby committed grave abuse of discretion. but with the CA reversing the order of reinstatement and instead directing the payment of separation pay to Malvar. Hence. vacation leave pay. inclusive of allowances and other pay. however.1 the Labor Arbiter found and declared her suspension and dismissal illegal.6 On November 9.R.575.593. 2001. However. However. Labor Arbiter Jaime M. unpaid salary for January 1 to 26.R. Labor Arbiter Reyno reduced Malvar’s total monetary award to P27. 2004.7 finding that the RCU’s computation lacked legal basis for including the salary increases that the decision promulgated in CA-G. plus attorney’s fees. SP No. 2006.

581.00 Moral Damages 500.805.83 days x 55 days 909.773.788.651. Unpaid Salary 1/1-26/05 = 87 mos.575. Sick Leave Pay Year 1999 to 2004 = 6 yrs P344.2.575.83 Year 2005 P344.483.711.83 5.183.575.650.75 Allowances & Other Benefits: Management Incentive Plan 7.88/20.77 4.000.83 x 87 = 299.88/20.646.00 Exemplary Damages 200.213.86 Backwages (from 3/7/00-4/30/01.825.86 1.83/20.575.00 Entitlement to Philip Sch G Subject to "Share Option Grant" Market Price . P344.00 Rice Subsidy 58.83/20.00 Entitlement to a Company Driver 438.355.790.83 x 15 days x 6 = 1.702.83 x 15/12 x 1 20.58 Cash Dividend on Philip Morris Shares 2.575.000.327.575.909.488.83 x 22/12 x 1 30. Holiday Pay 4/1/00-1/26/05 = 55 holidays P4.79 Year 2005 P344. Unpaid 13th month pay for Dec 2000344.134.650. Vacation Leave Pay Year 1999 to 2004 = 6 years P344.000.65 6.780. award in LA Sytian’s Decision 4.910/12 mos/20.36 10.677.166.83 x 22 days x 6 = 2.55 2.509.00 Attorney’s Fees 500.92 Gas Allowance 198.00 Car Maintenance 381.000.97 3.

SP No.06.378. including cash dividends arising therefrom without prejudice to the filing of the appropriate remedy by the private respondent in the proper forum. which. 2006 order. enjoining the NLRC and Malvar from implementing the NLRC’s decision. 2007. the Labor Arbiter is further directed to DISREGARD monetary awards arising from: (a) the management incentive plan and (b) the share option grant.10 On July 27.11 SO ORDERED. 99865. 69660 precluded the respondents from challenging the inclusion of the salary increases and other monetary benefits.9 the NLRC denied the respondents’ motion for reconsideration. After the writ of execution was issued. without including projected salary increases.R. on April19. Private respondent’s allowances for car maintenance and gasoline are . the CA rendered its decision in CA-G. The matter of computation of monetary awards for private respondent is hereby REMANDED to the Labor Arbiter and he is DIRECTED to recompute the monetary award due to private respondent based on her salary at the time of her termination. and adopting the computation by the RCU. The petition mainly argued that the NLRC had gravely abused its discretion in ruling that: (a) the inclusion of the salary increases and other monetary benefits in the award to Malvar was final and executory. In computing the said benefits. assailing the NLRC’s setting aside of the computation by Labor Arbiter Reyno (CA-G. the respondents went to the CA on certiorari (with prayer for the issuance of a temporary restraining order (TRO) or writ of preliminary injunction).12 disposing thusly: WHEREFORE. a partial enforcement as effected by garnishing the respondents’ funds deposited with Citibank worth 37. the herein Petition is GRANTED and the 19 April 2007 Decision of the NLRC and the 31May 2007 Resolution in NLRC NCR 30-07-02316-00 are hereby REVERSED and SET ASIDE. 2007. 2008. and (b) the finality of the ruling in CA-G. 2007. Both parties appealed the computation to the NLRC.696.786.391. SP No. Malvar filed a second motion for the issuance of a writ of execution to enforce the decision of the NLRC rendered on April 19. 2007.R. premises considered. rendered its decision setting aside Labor Arbiter Reyno’s November 9. SP No.8 In its resolution dated May 31.11 On April 17. 99865). The CA issued a TRO.R.27.

retirement pay and such other benefits. which amount shall be deducted from the amount to be given to private respondent after proper computation. 13th and 14th month pay.13 Malvar sought reconsideration. With respect to the Motion to Exclude the Undisputed Amount of P14.14 Aggrieved. 2008. Malvar from KFPI in August2008 (both amounts constituting the "Compromise Payment"). the same is hereby GRANTED for reasons stated therefor. Malvar the amount of Philippine Pesos Forty Million (Php 40.12 from the coverage of the Writ of Preliminary Injunction and to order its immediate release. Inc. stock options or other forms of equity compensation whether vested or otherwise and claims of any and all kinds against KFPI and KFI and Altria Group. SO ORDERED. which is in addition to the Philippine Pesos Fourteen Million Two Hundred Fifty-Two Thousand One Hundred Ninety-Two and Twelve Centavos (Php14. separation pay. directors. the pertinent dispositive portion of which is quoted as follows: NOW.192. Simultaneously upon execution of this Agreement in the presence of Ms. KFPI shall pay Ms. but the CA denied her motion on July30.12) already paid to and received by Ms. by appropriate receipts. cash conversion of her accrued vacation. claims for stock. allowances. The Compromise Payment includes full and complete payment and settlement of Ms.192. 2010.252. Malvar’s attorney. up to the last day of the aforesaid cessation of her employment. Malvar appealed to the Court. their predecessors-in-interest. both motions are hereby DENIED for lack of merit. On December 9. Malvar and the respondents entered into a compromise agreement. their stockholders. sick and emergency leaves. her entitlement thereto. while her appeal was pending in this Court. assailing the CA’s decision.likewise DELETED unless private respondent proves. agents or successors-in-interest.252.000. affiliates and subsidiaries.. entitlements. Malvar’s salaries and wages up to the last day of her employment. for and in consideration of the covenants and understanding between the parties herein. THEREFORE.00). . officers. the parties hereto have entered into this Agreement on the following terms and conditions: 1. As regards the Motions for Reconsideration of the Resolution denying the Motion for Voluntary Inhibition and the Omnibus Motion dated 30 October 2007.000.

retirement pay. present and future contractual commitments.. this popular. company policies or practices. Llasos and Associates. xxxx . the Court received on February 15. affiliates and subsidiaries from any and all manner of action. perception will be shown wrong. damages. separation pay. In consideration of the Compromise Payment. Malvar’s employment with KFPI. 2011 a so-called Motion for Intervention to Protect Attorney’s Rights17 from The Law Firm of Dasal. through its Of Counsel Retired Supreme Court Associate Justice Josue N. unpaid wages. allowances. stockholders. holiday pay. among others. perceived also as leeches sucking dry the blood of their adversaries. claims for stock. oftentimes. claims and demands whatsoever in law or in equity which Ms.2. sum of money. Malvar filed an undated Motion to Dismiss/Withdraw Case. or now have against KFPI and/or KFI and/or Altria Group. 13th and 14th month pay. agents or successors-in-interest. Malvar or her heirs.15 xxxx Thereafter.16 praying that the appeal be immediately dismissed/withdrawn in view of the compromise agreement. stock options or other forms of equity compensation whether vested or otherwise whether arising from her employment contract. their predecessors or successors-in-interest. including Mr. and that the case be considered closed and terminated. Inc. are caricatured as alligators or some other specie of voracious carnivore. directors. Bellosillo18 (Intervenor). officers. or otherwise. Inc. in connection with Ms. rather unpopular. cause of action. that both Malvar and KFPI be held and ordered to pay jointly and severally the Intervenor’s contingent fees. company grant. Ms. successors and assigns had.. Malvar hereby freely and voluntarily releases and forever discharges KFPI and KFI and Altria Group. including but not limited to. Bautista who was impleaded in the Labor Case as a party respondent. Intervention Before the Court could act on Malvar’s Motion to Dismiss/Withdraw Case. whereby the Intervenor sought. This case is a reversal of this perception. The Motion for Intervention relevantly averred: xxxx Lawyers. and even their own clients they are sworn to serve and protect! As we lay down the facts in this case. salaries.

xxxx Intervenor’s efforts resulted in the award and partial release of Petitioner’s claim amounting to P14.00 in connection with her labor case against Respondents.00 and P154. participation. or roughly P154.75. xxxx On 12 September 2008 Intervenor filed an exhaustive Petition for Review with the Supreme Court containing 70 pages.252.252. or a total of 419 pages against Respondents to collect on the balance of Petitioner’s claims amounting to at least P27.219.00 as of April 2008. .593.000.12 out of which Petitioner paid Intervenor 10% or P1. Copy of the check payment of Petitioner payable to Intervenor’s Of Counsel is attached as Annex "C".00 the latter representing the estimated value of Petitioner’s stock options as of April 2008.00 (10% of her total claim of almost P196.000.000.425. and (c)10% of the value of the stock options Petitioner claims to be entitled to. x x x. xxxx This Motion for Intervention will illustrate an aberration from the norm where the lawyer ends up seeking protection from his client’s and Respondents’ indecent and cunning maneuverings.12 upon its collection.192. much less.000.Here.21 as contingency fees pursuant to their engagement agreement (Annex "A").000.627. it is the lawyer who is eaten up alive by the warring but conspiring litigants who finally settled their differences without the knowledge.600. 192. including its Annexes "A" to "R".000.000. x x x. Petitioner bound herself to pay Intervenor contingency fees as follows (a) 10% of P14. (b) 10% of the remaining balance of P41. of Petitioner’s counsel that labored hard and did everything to champion her cause.000. xxxx According to their agreement (Annex "A").000. xxxx On 18 March 2008 Petitioner engaged the professional services of Intervenor x x x on a contingency basis whereby the former agreed in writing to pay the latter contingency fees amounting to almost P19.

The Intervenor prayed that the Court furnish it with copies of resolutions. she had even commended it for its dedication and devotion to her case through her following letter to Justice Bellosillo. on October 5. on the contrary.20 Hence. in behalf of Petitioner. shocked and even embarrassed the Intervenor. should the petition be decided in her favor.000. xxxx It appears that in July 2009. 2008 Justice Josue Belocillo (sic) .2009. (b) the type of legal services already rendered by the Intervenor for Malvar. to the Intervenor’s surprise. (c) the absence of any legitimate reason for the termination of their attorney-client relationship. for. to wit: July 16. xxxx All the pleadings in this Petition have already been submitted on time with nothing more to be done except to await the Resolution of this Honorable Court which. (d) the reluctance of the Intervenor to withdraw as Malvar’s counsel.00. The Intervenor indicated that Malvar’s precipitate action had baffled. Malvar unceremoniously and without any justifiable reason terminated its legal service and required it to withdraw from the case. decisions and other legal papers issued or to be issued after its withdrawal as counsel of Malvar in the interest of protecting its interest as her attorney. filed its Reply to the Comment. Petitioner would stand to gain P182.21 in which it spelled out: (a) the terms of and conditions of the Intervenor’s engagement as counsel. xxxx On 13 April 2009 Intervenor. more or less. and (e) the desire of the Intervenor to assert and claim its contingent fee notwithstanding its withdrawal as counsel. It added that it could not recall any instance of conflict or misunderstanding with her.xxxx On 15 January 2009 Respondents filed their Comment to the Petition for Review. the Intervenor reluctantly filed a Manifestation (With Motion to Withdraw as Counsel for Petitioner). because it had done everything legally possible to serve and protect her interest.000.19 (Bold emphasis supplied). which victory would be largely through the efforts of Intervenor.

Thank you po for your understanding and support. The only impending constraint for NLRC to execute and collect this amount from the already garnished amount of Pesos 41 million at Citibank is the MR of Kraft on the Order of the Court (CA) to execute collection. It is almost morning of July 17 as I write this letter to you. However. Petitioner immediately received (supposedly) from RespondentsP40. I just thought I’d express to you what is in the innermost of my heart as we proceed in the case.000. I cannot overemphasize to you our need for funds. The most important and immediate aspect of the case at this time for me is the collection of the undisputed amount of Pesos 14million which the Court has clearly directed and ordered the NLRC to execute.00. but considering the Intervenor’s interest in the case as well as its resolve in pursuing Malvar’s interest.00 or more as a result of the labor litigation. Obviously. as I expressed to you in several instances. help and support in the case. But we can barely meet our day to day business and personal requirements given our current situation right now.000. We have made financial commitments that require us to raise some amount. I have serious reservations on the willingness of Romulo to settle within reasonable amounts specifically as it relates to the stock options. Upon execution of the Compromise Agreement and pursuant thereto. Let us continue to pursue this route vigorously while not setting aside our efforts to influence the CA to DENY their Motion on the Undisputed amount of Pesos 14million. it was certain that the compromise agreement was authored by the respondents to evade a possible loss of P182.Dear Justice.000. We already obtained commitment from NLRC that all it needed to execute collection is the denial of the MR.22 According to the Intervenor. Petitioner did not pay Intervenor its just compensation as set . This prompted the Intervenor to bring the matter to the attention of the Court to enable it to recover in full its compensation based on its written agreement with her. Jun and I are forever grateful to you for all your help.000. the only way to remove the Intervenor was to have her terminate its services as her legal counsel. But despite the settlement between the parties. At this point. Jun and I applaud your initiative and efforts to mediate with Romulo on potential settlement. they saw the Intervenor as a major stumbling block to the compromise agreement that it was then brewing with her. averring thus: xxxx 28. It has been around four months now since we met mid-March early this year. Let me first thank you for your continued and unrelenting lead. You have been our "rock" as far as this case is concerned. We need to get a denial of this motion for NLRC to execute immediately.

the contract between the Intervenor and Petitioner is reduced into writing. the better practice is to settle the matter of the attorney’s fees in the same proceeding.23 xxxx In support of the Motion for Intervention. 30. Second. All the elements for the full recovery of Intervenor’s compensation are present. both Petitioner and Respondents probably thought they would be able to settle the case without any cost to them. Pursuant to the Second Paragraph of Section 26. The Intervenor prays for the following reliefs: a) Granting the Motion for Intervention to Protect Attorney’s Rights in favor of the Intervenor. with intent to deprive him of the fees justly due him. Rule 138. To parties’ minds. While We here reaffirm the rule that "the client has an undoubted right to compromise a suit without the intervention of his lawyer. with the dismissal by Petitioner of Intervenor as her counsel. Court of Appeals." We hold that when such compromise is entered into in fraud of the lawyer. Intervenor is dismissed without justifiable cause and at the stage of proceedings where there is nothing more to be done but to await the Decision or Resolution of the Present Petition. . she immediately moved to Dismiss/Withdraw the Present Petition. of the Revised Rules of Court quoted in paragraph 3 hereof. the Intervenor cites the rulings in Aro v.25 particularly the following passage: x x x. instead. The parties cannot be any more mistaken.forth in their engagement agreement. after hearing all the affected parties and without prejudice to the finality of the compromise agreement in so far as it does not adversely affect the right of the lawyer. First. 31. Armovit v. Intervenor is still entitled to recover from Petitioner the full compensation it deserves as stipulated in its contract. the compromise must be subject to the said fees and that when it is evident that the said fraud is committed in confabulation with the adverse party who had knowledge of the lawyer’s contingent interest or such interest appears of record and who would benefit under such compromise. Nañawa24 and Law Firm of Raymundo A. b) Directing both Petitioner and Respondents jointly and severally to pay Intervenor its contingent fees. with Petitioner saving on Intervenor’s contingent fees while Respondents able to take advantage of the absence of Intervenor in determining the settlement price. 29.26 x x x.

2011. that the Intervenor still existed as a law firm. On June 21. that the Intervenor lacked the legal capacity to intervene because it had ceased to exist after Atty.30 Issues . Dasal became barred from private practice upon his appointment as head of the Legal Department of the Small Business Guarantee and Finance Corporation. Dasal had personally handled her case. after more than a year and two months. the compromise agreement was executed with the respondents on December 9. Llasos resigned from the Intervenor and Atty.27 Opposing the Motion for Intervention. a government subsidiary. Richard B.28 Malvar stresses that there was no truth to the Intervenor’s claim to defraud it of its professional fees. On November 18. Llasos and Atty. 2010. while the Intervenor withdrew its services on October 5. it was still not entitled to intervene for the following reasons.2010 and notarized on December 14. and finally. maintaining that this was a justifiable cause to dismiss its services. thirdly. 2011. arguendo. namely: firstly. Dasal was confronted about his appointment to the government subsidiary. and e) Other reliefs just and equitable. Malvar adds that even assuming. the Intervenor only heeded her repeated demands to withdraw from the case when Atty. and d) Holding in Abeyance in the meantime the Resolution of the Motion to Dismiss/Withdraw Case filed by Petitioner and granting the Motion only after Intervenor has been fully paid its just compensation. it was misleading and grossly erroneous for the Intervenor to claim that it had rendered to her full and satisfactory services when the truth was that its participation was strictly limited to the preparation. Marwil N.c) Granting a lien upon all judgments for the payment of money and executions issued in pursuance of such judgments. the respondents filed their comment to the Intervenor’s Motion for Intervention. secondly. it failed to attend to her multiple pleas and inquiries regarding the case. the Intervenor submitted its position on the respondent’s comment dated June 21.29 and thereafter the respondents sent in their reply. as when communications to the Intervenor through text messages were left unanswered. dispelling any badge of bad faith on their end. 2009. and that Atty. finalization and submission of the petition for review with the Supreme Court. 2011.

how much could it recover as attorney’s fees. and observe honesty and good faith. whereby the parties undertake reciprocal obligations to avoid litigation.36 By the same token. good customs and public policy. if so. give everyone his due.31 The client may enter into a compromise agreement with the adverse party to terminate the litigation before a judgment is rendered therein. This is clear from Section 26. that the compromise agreement does not adversely affect third persons who are not parties to the agreement.33 A compromise agreement. in the exercise of his rights and in the performance of his duties. morals.An attorney may retire at anytime from any action or special proceeding. and (b) whether or not the Motion for Intervention to protect attorney’s rights can prosper. or put an end to one already commenced. The limitation is based on Article 19 of the Civil Code. by the written consent of his client filed in court. Change of attorneys. which provides: Section 26.35 It is important for the client to show. Client’s right to settle litigation by compromise agreement. if acting in good faith. however. and. and to terminate counsel. which mandates that "every person must." The right is also subject to the right of the attorney to be compensated. a client has the absolute right to terminate the attorney-client relationship at any time with or without cause. once approved by final order of the court. settle and adjust the cause of action out of court before judgment. for the former is generally conceded to have exclusive control over the subject matter of the litigation and may at anytime. even without the attorney’s intervention.37 But this right of the client is not unlimited because good faith is required in terminating the relationship. Ruling of the Court We shall decide the issues accordingly. limitations A compromise agreement is a contract. has the force of res judicata between the parties and will not be disturbed except for vices of consent or forgery. 1.The issues for our consideration and determination are two fold. namely: (a) whether or not Malvar’s motion to dismiss the petition on the ground of the execution of the compromise agreement was proper. He may also retire at .34 A client has an undoubted right to settle her litigation without the intervention of the attorney. Rule 138 of the Rules of Court. act with justice. its judicial approval is in order. .32 If the compromise agreement is found to be in order and not contrary to law.

the Court approves the compromise agreement. For the payment of his compensation the attorney shall have a lien upon all judgments for the payment of money. and written notice of the change shall be given to the adverse party. Compromise agreement is to be approved despite favorable action on the Intervenor’s Motion for Intervention On considerations of equity and fairness.any time from an action or special proceeding. It remains entitled to the compensation. the duty of the Court is not only to ensure that the attorney . the Court grants the Intervenor’s Motion for Intervention to Protect Attorney’s Rights as a measure of protecting the Intervenor’s right to its stipulated professional fees that would be denied under the compromise agreement. The attorney who has acted in good faith and honesty in representing and serving the interests of the client should be reasonably compensated for his service. however. In other words. A client may at any time dismiss his attorney or substitute another in his place. the attorney may. There being no obstacles to its approval. Nonetheless. should the court. the claim for attorney’s fees does not void or nullify the compromise agreement between Malvar and the respondents. he shall be entitled to recover from the client the full compensation stipulated in the contract.39 Thus. intervene in the case to protect his rights. determine that he ought to be allowed to retire. for the payment of its adequate and reasonable compensation could not be annulled by the settlement of the litigation without its participation and conformity. rendered in the case wherein his services had been retained by the client. The Court does so in the interest of protecting the rights of the practicing Bar rendering professional services on contingent fee basis. without the consent of his client. and its right is safeguarded by the Court because its members are officers of the Court who are as entitled to judicial protection against injustice or imposition of fraud committed by the client as much as the client is against their abuses as her counsel. However. it is basic that an attorney is entitled to have and to receive a just and reasonable compensation for services performed at the special instance and request of his client. and executions issued in pursuance of such judgment. on notice to the client and attorney. and on hearing. (Bold emphasis supplied) In fine. the Court disapproves of the tendencies of clients compromising their cases behind the backs of their attorneys for the purpose of unreasonably reducing or completely setting to naught the stipulated contingent fees. but if the contract between client and attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause.38 2. In case of substitution. that the Intervenor is not left without a remedy. in the discretion of the court. The Court adds. the name of the attorney newly employed shall be entered on the docket of the court in place of the former one.

the case was pending in the CA at the respondents’ instance after the NLRC had set aside the RCU’s computation of Malvar’s backwages and monetary benefits. . the determination requires that there be evidence to prove the amount of fees and the extent and value of the services rendered. and remanded the case to the Labor Arbiter for the computation of her monetary awards. 2008 consisting of thirty-eight pages was filed before the Court of Appeals on May 6.627. On April 17.627.593. provided the fees therein fixed were reasonable. but also to see to it that the attorney is paid his just fees.12 upon its collection and another ten percent (10%) of the remaining balance of PhP41. Malvar engaged the professional services of the Intervenor to represent her in the case of illegal dismissal. It was at this juncture that the Intervenor commenced its legal service. At that time. the subsequent withdrawal of the case upon the client’s initiative would not deprive the attorney of the legitimate compensation for professional services rendered. Even if the compensation of the attorney is dependent only on winning the litigation. and also ten percent (10%) of whatever is the value of the stock option you are entitled to under the Decision. which included the following incidents.43 the history of the Intervenor’s legal representation of Malvar can provide a helpful predicate for resolving the dispute between her and the Intervenor.40 The basis of the intervention is the written agreement on contingent fees contained in the engagement executed on March 19.41 the pertinent portion of which stipulated that the Intervenor would "collect ten percent (10%) of the amount of PhP14.75 was already awarded to Malvar by the NLRC but the award became the subject of the appeal in this Court because the CA reversed the NLRC. taking into account the facts determinative thereof. the CA set aside the assailed resolution of the NLRC." There is no question that such arrangement was a contingent fee agreement that was valid in this jurisdiction. her subsequent change of mind on the amount sought from the respondents as reflected in the compromise agreement should not negate or bar the Intervenor’s recovery of the agreed attorney’s fees. a Motion for Reconsideration of the Decision of the Court of Appeals dated April 17.75 and 10% of the value of the stock option was reasonable. 2009.627. 2008. Be that as it may.75 upon collection thereof. The P41. The records reveal that on March 18. 2008 between Malvar and the Intervenor. Considering that in the event of a dispute between the attorney and the client as to the amount of fees. and the intervention of the courts is sought.42 We hold that the contingent fee of 10% of P41.252.593. 2008. 2008.acts in a proper and lawful manner.192. namely: a) Upon the assumption of its professional duties as Malvar’s counsel. and had upheld the computation arrived at by the NLRC Computation Unit. b) On June 2.593. said Comment consisted 8 pages. Intervenors filed a Comment to Respondents’ Motion for Partial Reconsideration.

a client cannot deprive the lawyer of his just fees already earned in the guise of a justifiable reason. including the reply of April 13.44 The decision promulgated on April 17. 200845 and the resolution promulgated on July 30. But. 2008 to this Court with the assistance of the Intervenor. debunked her allegations of unsatisfactory legal service because she thereby lavishly lauded the Intervenor for its dedication and devotion to the prosecution of her case and to the .c) In the execution proceedings before Labor Arbiter Jaime Reyno. 200846 by the CA prompted Malvar to appeal on August 15. Intervenor prepared and filed on Malvar’s behalf an "Ex-Parte Motion to Release to Complainant the Undisputed amount of P14. Intervenor prepared and filed before the Labor Arbiter Malvar’s Motion Reiterating Motion to Release the Amount of P14. 2008. the question begging to be answered is: Was the Intervenor dismissed for a justifiable cause? We do not think so. Malvar should accept that the practice of law was not limited to the conduct of cases or litigations in court but embraced also the preparation of pleadings and other papers incidental to the cases or litigations as well as the management of such actions and proceedings on behalf of the clients.12.48 Consequently. as earlier pointed out.192. Malvar not only downplayed the worth of the Intervenor’s legal service to her but also attempted to camouflage her intent to defraud her lawyer by offering excuses that were not only inconsistent with her actions but. consent or waiver. 30-07-02716-00.49 Considering the undisputed existence of the written agreement on contingent fees.12" in NLRC NCR Case No. fairness and justice demand that the Intervenor be accorded full recognition as her counsel who discharged its responsibility for Malvar’s cause to its successful end.192. fell short of being justifiable.252. most importantly. Intervenor prepared and filed before theLabor Arbiter a Comment to Respondents’ Opposition to the "Ex-Parte Motion to Release" and a "Motion Reiterating Immediate Implementation of the Writ of Execution" e) On August 6. the dismissal must be for a justifiable cause if a written contract between the lawyer and the client exists. d) On July 29. In the absence of the lawyer’s fault. Here. 2000. who represented the Intervenor.252. All the subsequent pleadings. although a client may dismiss her lawyer at any time.47 were prepared and filed in Malvar’s behalf by the Intervenor. The letter Malvar addressed to Retired Justice Bellosillo. 2009.

51 Were the respondents also liable? The respondents would be liable if they were shown to have connived with Malvar in the execution of the compromise agreement. To be sure. Africa. Nor did the withdrawal constitute a waiver of the agreement. Dasal’s appointment to public office and Atty. morals. retirement or separation from the law firm of the handling lawyer does not terminate the relationship. public policy. The stipulations of the written agreement between Malvar and the Intervenors. Thereby. premises considered. On the contrary. 26. the agreement continued between them because the Intervenor’s Manifestation (with Motion to Withdraw as Counsel for Petitioner)explicitly called upon the Court to safeguard its rights under the written agreement. for. not being contrary to law.50 a client who employs a law firm engages the entire law firm. resolutions and other legal processes of this Honorable Court to enable them to protect their interests. Sec.. The respondents insist that they were not bound by the written agreement. she could not simply walk away from her contractual obligations towards the Intervenor. In other words. the Intervenor remained as her counsel of record. public order or good customs. and should not be held liable under it. hence. the Intervenor’s withdrawal from the case neither cancelled nor terminated the written agreement on the contingent attorney’s fees. because the law firm is bound to provide a replacement. Undersigned counsel further requests that they be furnished copy of the decision. De Ocampo and Africa v. Eastern Telecommunication Philippines. the resignation. as we held in Rilloraza. Rule 138 of the Rules of Court. were valid and binding on her. Inc.1âwphi1 . to wit: WHEREFORE. for Article 1159 of the Civil Code provides that obligations arising from contracts have the force of law between the parties and should be complied with in good faith. 2. with the intention of depriving the Intervenor of its attorney’s fees. In a word. undersigned counsel respectfully pray that instant Motion to Withdraw as Counsel for Petitioner be granted and their attorney’s lien pursuant to the written agreement be reflected in the judgment or decision that may be rendered hereafter conformably with par. Also significant was that the attorney-client relationship between her and the Intervenor was not severed upon Atty. They expressly gave rise to the right of the Intervenor to demand of her interests. Llasos’ resignation from the law firm. they would be solidarily liable with her for the attorney’s fees as stipulated in the written agreement under the theory that they unfairly and unjustly interfered with the Intervenor’s professional relationship with Malvar.

the unusual timing of Malvar’s letter terminating the Intervenor’s legal representation of her. the Intervenor should be declared entitled to recover full compensation in accordance with the written agreement because it did not assent to the waiver of the stock options.627. . The softening unavoidably gives the impression that they were now categorically conceding that Malvar deserved much more. Under those circumstances. a sum that was measly compared to what she was legally entitled to. In other words. The respondents were complicit in Malvar’s move to deprive the Intervenor of its duly earned contingent fees. only Malvar. of her Motion to Dismiss/Withdraw Case. already included the P41. contrary to the stipulation in the compromise agreement. the Court notes that the compromise agreement would have Malvar waive even the substantial stock options already awarded by the NLRC’s decision. allowing to her through their compromise agreement the additional amount of P40. the respondents suddenly turned around from their strong stance of berating her demand as offensive to all precepts of justice and fair play and as a form of unjust enrichment for her to a surprisingly generous surrender to her demand.593. filed the Motion to Dismiss/Withdraw Case. This ruling was affirmed by the CA. indicating that the objective of the compromise agreement was to secure a huge discount from its liability towards Malvar. and did not waive its right to that part of its compensation. which. Thus.00. First of all.192. At this juncture. it is plausible to conclude that her termination of the Intervenor’s services was instigated by their prodding in order to remove the Intervenor from the picture for being a solid obstruction to the settlement for a much lower liability. The objective of her withdrawal of the case was to release the respondents from all her claims and causes of action in consideration of the settlement in the stated amount of P40.000. Thirdly. to begin with. and of the execution of compromise agreement manifested her desire to evade her legal obligation to pay to the Intervenor its attorney’s fees for the legal services rendered.12 already received by her in August 2008.We disagree with the respondents’ insistence. among others. the compromise agreement was silent on the Intervenor’s contingent fee.53 But the waiver could not negate the Intervenor’s right to 10% of the value of the stock options she was legally entitled to under the decisions of the NLRC and the CA.252. she thereby waived more than what she was lawfully expected to receive from the respondents.000. for that right was expressly stated in the written agreement between her and the Intervenor.75 and the value of the stock option already awarded to her.000.00 on top of theP14.000. minus the respondents. the value of the stock options and all other bonuses she was entitled to or would have been entitled to had she not been illegally dismissed from her employment. Secondly.52 which ordered the respondents to pay to her. and thereby save for themselves and for her some more amount. Finally.

No actor’s negligence ceases to be a proximate cause merely because it does not exceed the negligence of other acts. for the purpose of each paying an aliquot part. They cannot insist upon an apportionment. especially the benefits from the stock option. if independent of each other. as joint tort-feasors.57 To stress. . except by themselves. if done for their benefit. or who approve of it after it is done. Joint tort-feasors are those who command. aid or abet the commission of a tort. There is no way of appreciating these circumstances except in this light. it is impossible to determine in what proportion each contributed to the injury and either of them is responsible for the whole injury. would have tenaciously fought all the way for her to receive literally everything that she was entitled to.55 Under Article 2194 of the Civil Code. Where the concurrent or successive negligent acts or omissions of two or more persons. and from the possible obstacle to their plan to settle to pay. As regards the extent of their respective liabilities. cooperate in. had it joined the negotiations as her lawyer. although acting independently. unite in causing a single injury. They are jointly and severally liable for the whole amount. it may appear that one of them was more culpable. advise. It is likewise not an excuse for any of the joint tort-feasors that individual participation in the tort was insignificant as compared to that of the other. Where several causes producing an injury are concurrent and each is an efficient cause without which the injury would not have happened. she and the respondents became joint tort-feasors who acted adversely against the interests of the Intervenor. the Court said in Far Eastern Shipping Company v. joint tort-feasors are not liable pro rata. promote. Thereby. the injury may be attributed to all or any of the causes and recovery may be had against any or all of the responsible persons although under the circumstances of the case. countenance. Her rush to settle because of her financial concerns could have led her to accept the respondents’ offer.These circumstances show that Malvar and the respondents needed an escape from greater liability towards the Intervenor. encourage. to the same extent and in the same manner as if they had performed the wrongful act themselves. joint tort-feasors are solidarily liable for the resulting damage. and that the duty owed by them to the injured person was not same.54 They are also referred to as those who act together in committing wrong or whose acts. considering that the Intervenor. It cannot be simply assumed that only Malvar would be liable towards the Intervenor at that point. Court of Appeals:56 x x x.58 Thus. Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the injury. There is no contribution between joint tort-feasors whose liability is solidary since both of them are liable for the total damage. The damages cannot be apportioned among them. are in combination the direct and proximate cause of a single injury to a third person. which offer could be further reduced by the Intervenor’s expected demand for compensation. instigate. x x x Joint tort-feasors are each liable as principals. Malvar and the respondents should be held solidarily liable to the Intervenor.

2014 ATTY. . Respondent. No. and JANET YUAN. AGUSTIN. the courts. whether trial or appellate. LUISA CRUZ. ALEJANDRO YUAN. Petitioners. No pronouncement on costs of suit. Truly. MELANIE BRIONES.627. the courts are bound to respect and protect the attorney’s lien as a necessary means to preserve the decorum and respectability of the Law Profession. It is enough for the Court to hold the respondents and Malvar solidarily liable for the 10% of that value of the stock options. and the further sum equivalent to 10% of the value of the stock option. and Kraft Foods International to jointly and severally pay to Intervenor Law Firm. MARY JANE OLASO. the duty of the courts is not only to see to it that attorneys act in a proper and lawful manner. As a rule. JOCELYN LAV ARES. Malvar and respondents Kraft Food Philippines Inc. SO ORDERED. ALEJANDRO CRUZ-HERRERA. its stipulated contingent fees of 10% of P41. it is necessary to state that no court can shirk from enforcing the contractual stipulations in the manner they have agreed upon and written. and ORDERS Czarina T. FIRST DIVISION G.59 The same precepts hold sway when it comes to enforcing fee arrangements entered into in writing between clients and attorneys. ADELAIDA FERNANDEZ. As a final word. have no power to make or modify contracts between the parties. vs.60 Hence. RUSTY BAUTISTA. JOSEPHINE SOLANO.That the value of the stock options that Malvar waived under the compromise agreement has not been fixed as yet is no hindrance to the implementation of this decision in favor of the Intervenor. Bellosillo. 174564 February 12. EMMANUEL D. MA.61 WHEREFORE. GRANTS the Motion for Intervention to Protect Attorney's Rights. ROWENA PATRON. the Court must thwart any and every effort of clients already served by their attorneys’ worthy services to deprive them of their hard-earned compensation. the Court APPROVES the compromise agreement.75. In the exercise of their supervisory authority over attorneys as officers of the Court.593. but also to see to it that attorneys are paid their just and lawful fees. SUSAN TAPALES. represented by Retired Associate Justice Josue N. The valuation could be reliably made at a subsequent time from the finality of this adjudication.R. Nor can the courts save the parties from disadvantageous provisions.

: This is a petition for review on certiorari1 assailing the Resolution2 dated September 30.00 2.4 They engaged the services of Atty.680.00 . the complainants were terminated from employment due to financial reverses. no such report of financial reverses or even retrenchment was filed. 1998.680. Luisa Cruz. Agustin. 2005 of the Court of Appeals (CA) in CA-G. with the Department of Labor and Employment. x 68 mos. [Podden and Herrera] are hereby directed/ordered to immediately reinstate the complainants to their former positions without loss of seniority rights and other privileges with full backwages from date of dismissal up to actual date of reinstatement which as of this month is more or less in the amount as follows: COMPLAINANT AMOUNT [P]238.00=([P]135.) 1. Rowena Patron. This prompted the complainants to file a complaint for illegal dismissal. thru Atty. premises considered.DECISION REYES. Inc. Upon verification. monetary claims and damages against Podden and Herrera. Adelaida Fernandez. (Podden). obtained a favorable ruling before the Labor Arbiter (LA) who disposed as follows in its Decision6 dated September 27. namely: Josephine Solano. Agustin (Atty. SP No.R.· Alejandro Yuan.3 In 1993.680. to wit: WHEREFORE. however.510/mo. and Janet Yuan (complainants). 85556 which approved the joint compromise agreement executed by respondent Alejandro Cruz-Herrera (Herrera) and the former employees of Podden International Philippines.00/day x 26 days = [P]3. Jocelyn Lavares. Agustin) to handle the case5 upon the verbal agreement that he will be paid on a contingency basis at the rate of ten percent (10%) of the final monetary award or such amount of attorney’s fees that will be finally determined. The Antecedents Respondent Herrera was the President of Podden while complainants were assemblers and/or line leader assigned at the production department. ADELAIDA FERNANDEZ [P]238. Mary Jane Olaso. Emmanuel D. Rusty Bautista. Melanie Briones. J. Ma. Susan Tapales. JOSEPHINE SOLANO [P]238. Proceedings before the Labor Arbiter The complainants.

00 9. ROWENA PATRON [P]238.441.3.680. 1999 but was reset twice upon the parties’ request for the purpose of exploring the possibility of settlement. as well as ten (10%) of the total awards as attorney’s fee.00 11.9 On July 20. 1999. JANET YUAN [P]238. LUISA CRUZ [P]238. Herrera filed a Manifestation and Motion to deny issuance of the writ stating. MELANIE BRIONES [P]238.680.680.00 6. 1999. SO ORDERED.000.358. MA. among others. 1994 or almost four years before judgment was rendered by the LA on the illegal dismissal complaint and that nine of the eleven employees have executed Waivers and Quitclaims rendering any execution of the judgment inequitable.680. [Podden and Herrera] are furthermore ordered to pay each complainant the amount of [P]40.680. MARY JANE OLASO [P]238. the Computation and Examination Unit of the National Labor Relations Commission (NLRC) released the computation of the total monetary award granted by the LA amounting to P3. on February 2. premium pay for holidays and rest days and service incentive leave pay to be computed by the Fiscal Examiner of the Research.00 TOTAL [P]2.10 Atty.00 10.8 On March 20.00 4. 1999.00 8. that Podden ceased operations on December 1.680.7 No appeal was taken from the foregoing judgment hence. Agustin opposed Herrera’s motion and argued that the issuance of a writ of execution is ministerial because the LA decision has long been final and executory there being no appeal . RUSTY BAUTISTA [P]238.84.625. ALEJANDRO YUAN [P]238.00 [Podden and Herrera] are further ordered to pay complainants their money claims representing their underpayment of wages.480. The motion was set for a hearing on February 10.680. JOCELYN LAVARES [P]238.680. a motion for execution was filed.680. Information and Computation Unit of the Commission in due time. SUSAN TAPALES [P]238.00 5.00 as moral and exemplary damages.00 7. 13th month pay.

taken therefrom. the LA issued its Order12 dated May 15. the letter was written in the vernacular of Filipino language. the quitclaims were held to have superseded the matter of issuing a writ of execution. On account of the settlement. 1999 and March 31. premises considered. Considering the fact that the complainants. That complainants meant and understood what they signed in the instrument is best shown by the fact that in the subsequent hearings scheduled to take up the motion for writ of execution and the opposition thereto (considering the relative importance of the matters raised and substantial awards to the complainants)[.] complainants have failed to show up in any of them. The order disposed thus: WHEREFORE. 2000. Complainants who are all presumed to be knowledgeable about the national language could not have been misled with respect to the real meaning and plain import of the words used in the instrument. Agustin’s fees. Ocampo. only shows the spontaneity and voluntariness of their deed. had indeed executed their respective waiver and quitclaim thru an instrument entitled "Pagtalikod sa Karapatang Maghabol" absolving [Podden and Herrera] from any and all liabilities that may arise against the latter to these cases. the LA held that he is entitled to ten percent (10%) of the total monetary award obtained by the complainants from the compromise agreement. it could only be supposed that as of that date they signed the instrument of waiver and quitclaim on March 2. however.11 Resolving the conflict. The instruments were signed by the complainants and sworn to before Notary Public Amparo G. received a copy of the Decision in these cases on December 28. all eleven (11) of them. they were already properly apprised about the decision having been issued in their favor. [Podden and Herrera] are hereby ordered to pay complainants’ counsel ten (10%) percent of the amount received by complainants as attorney’s fees. the motion for writ of execution is denied on [the] ground that complainants have already settled their cases with [Podden and Herrera]. 1999. more particularly the contents thereof. through their common counsel. SO ORDERED. April 8. based on the following findings: A cursory examination of the records reveal[s] that complainants. He further claimed that the alleged Waivers and Quitclaims were part of a scheme adopted by Podden to evade its liability and defraud the complainants.14 . by their esteemed counsel. notwithstanding. 1998. Anent Atty. The fact that complainants would execute such waiver and quitclaim. The LA sustained as valid the Waivers and Quitclaims signed by all and not just nine of the complainants.13 Accordingly. Moreover. and as the instrument of waiver and quitclaim would show. 2000 denying the motion for the issuance of a writ of execution.

680. a joint compromise agreement was submitted to the CA narrating as follows: WHEREAS. altered and modified the final and executory LA Decision dated September 27. During the pendency of the petition or on August 30. any amount received by the complainants under the quitclaims shall be deducted from the award due each of them. 2004. 2000 is hereby reversed and set aside and a new one entered ordering the Labor Arbiter a quo to immediately issue the corresponding writ of execution for the enforcement of the decision rendered in this case. the NLRC reversed the LA Order dated May 15.000. 2003 thus held: WHEREFORE. 2005. claims. the appeal is GRANTED. 1998.18 Ruling of the CA On August 6. 2004.000 and P20. The NLRC Resolution15 dated May 7. The quitclaims executed by the complainants are hereby nullified. the parties have discussed their differences. 2004 has become final and executory on June 20. The quitclaims were also held invalid based on the unconscionably low amount received by each of the complainants thereunder which ranged between P10. This factor was found by the NLRC to be a clear proof that the quitclaims were indeed wangled from the unsuspecting complainants.Ruling of the NLRC On appeal. 2004 which denied Podden and Herrera’s motion for reconsideration. 2004. Herrera filed a petition for certiorari before the CA assailing the issuances of the NLRC.000. On August 13. 2000 for the reason that it unlawfully amended.00 for each individual complainant. counterclaims and other issues in the above-entitled cases and have decided to amicably and mutually settle the same.00 as against the judgment award of P238. the NLRC issued an Entry of Judgment declaring that its Order dated May 31. SO ORDERED. . However.16 The NLRC reiterated the foregoing judgment in the Order17 dated May 31. The Order a quo of May 15.

the CA found the joint compromise agreement consistent with law. the LA Decision dated September 27.19 In its assailed Resolution20 dated September 30. the parties have agreed that [Herrera] shall pay the costs of the suit and attorney’s fees of [the complainants] equivalent to 10% (ten percent) of the total settlement agreement. Displeased. interposed the present recourse contending that the resolutions of the CA violated the principle of res judicata because they amended and altered the final and executory LA Decision dated September 27. with the complainants named as his co-petitioners. 2006. and consequently stamped its approval thereon and entered judgment in accordance therewith.21 Atty. Agustin. agree to have the present case dismissed WITH PREJUDICE. immediately. 2003 on the basis of an unconscionable compromise agreement that was executed without his knowledge and consent. x x x. their heirs. public order and public policy. WHEREAS. and assigns. Atty. Our Ruling . 2005. SO ORDERED. Agustin moved for the reconsideration of the foregoing resolution but his motion was denied in the CA Resolution22 dated September 8. the parties have agreed that [Herrera] shall pay each of the [complainants] immediately upon the signing of the Joint Compromise Agreement the amount of Php 35.WHEREAS.844. 1998 executed and Herrera ordered to pay him P335.00 to each. Atty. 1998 and NLRC Resolution dated May 7. viz: Finding the above terms and conditions not contrary to law. Parties are enjoined to strictly comply with this judgment on compromise. public order and public policy.000. the parties’ prayer that the foregoing joint compromise agreement be approved and the extant case be dismissed with prejudice is GRANTED and the agreement ADMITTED. Agustin prays that the joint compromise agreement be set aside. Judgment is hereby entered in accordance thereto.18 as attorney’s fees pursuant to the final and executory monetary award originally obtained by the complainants before the LA. the parties. WHEREAS.

Agustin instead of the complainants as the principal parties. It has been repeatedly emphasized that in the case of natural persons. the certification against forum shopping must be signed by the principal parties themselves and not by the attorney. As explained in Clavecilla v. Agustin ought to be reminded that his professional relation with his clients is one of agency under the rules thereof "[t]he acts of an agent are deemed the acts of the principal only if the agent acts within the scope of his authority. x x x Obviously it is the petitioner. . who is in the best position to know whether he or it actually filed or caused the filing of a petition in that case. Podden and Herrera. issues and causes of action. a certification against forum shopping by counsel is a defective certification. Atty. Agustin’s personal resolve to pursue this recourse premised on his unwavering stance that the joint compromise agreement signed by the complainants was inequitable and devious as they were denied the bigger monetary award adjudged by a final and executory judgment.25 The Court has espoused leniency and overlooked such procedural misstep in cases bearing substantial merit complemented by the written authority or general power of attorney granted by the parties to the actual signatory. Quitain:24 x x x [T]he certification (against forum shopping) must be signed by the plaintiff or any of the principal parties and not by the attorney.26 However. and not always the counsel whose professional services have been retained for a particular case. For such certification is a peculiar personal representation on the part of the principal party. Agustin is acting beyond the scope of his authority in questioning the compromise agreement between the complainants. Atty. no analogous justifiable reasons exist in the case at bar neither do the claims of Atty. The petition is dismissible outright for being accompanied by a defective certification of non- forum shopping having been signed by Atty.23 The purpose of the rule rests mainly on practical sensibility.We deny the petition. Hence. It is apparent that the complainants did not seek the instant review because they have already settled their dispute with Herrera before the CA. It is Atty. an assurance given to the court or other tribunal that there are no other pending cases involving basically the same parties. Agustin merit substantial consideration to justify a relaxation of the rule."27 It is clear that under the circumstances of this case.

29 Neither can a final judgment preclude a client from entering into a compromise. the absence of a counsel’s knowledge or consent does not invalidate a compromise agreement. it must not be contrary to law. 1998. 2000. good customs and public policy. or consent. The ruling in Unicane Workers Union-CLUP v. to wit: (1) they have already received a copy and hence aware of the LA Decision dated September 27. The circumstances which led the Court to annul the quitclaim in Unicane are not attendant in the present case. No akin situation exists in the case at bar. In Unicane. NLRC32 cited by Atty. (4) they were consistent in their manifestations before the NLRC and the CA that they have already settled their claims against Podden and Herrera hence. 1998 when they signed the quitclaims on March 2. the complainants voluntarily entered into and fully understood the contents and effect of the quitclaims. even though he has agreed with his attorney not to do so. (2) the quitclaims were written in Filipino language which is known to and understood by the complainants. morals. On the contrary. the allegations of vitiated consent proffered by Atty. freely and intelligently executed by the parties. if acting in good faith. Rights may be waived through a compromise agreement. the LA correctly observed that. at any time before judgment. There is no proof that the complainants were forced. it was ruled that the quitclaim did not bind the employees. compromise. 1999. notwithstanding a final judgment that has already settled the rights of the contracting parties provided the compromise is shown to have been voluntarily. intimidated or defrauded into executing the quitclaims. 1999 and March 31. Further. the attorney-in-fact who signed the quitclaim in behalf of the employees exceeded the scope of his authority thus prejudicing the latter.It is settled that parties may enter into a compromise agreement without the intervention of their lawyer. Agustin’s claim for his unpaid attorney’s fees cannot nullify the subject joint compromise agreement. Hence.28 This precedes from the equally settled rule that a client has an undoubted right to settle a suit without the intervention of his lawyer for he is generally conceded to have the exclusive control over the subject-matter of the litigation and may. it is the complainants themselves who can impugn the consideration of the compromise as being unconscionable31 but no such repudiation was manifested before the Court or the courts a quo. Agustin is not applicable to the facts at hand. Agustin before the said tribunals. Atty. based on the following facts. their request for the termination of the appeals filed by Atty. Furthermore. who had full knowledge of the judgment. April 8. Agustin are all presumptions and suppositions that have no bearing as evidence. Additionally.30 In the present case.33 . settle. Consequently. (3) none of the complainants attended the hearings on the motion for execution of the LA Decision dated September 27. and adjust his cause of action out of court without his attorney’s intervention. knowledge.

however. he will be made solidarily liable with the client for the payment of such fees. In this sense. viz: As the validity of a compromise agreement cannot be prejudiced. 1998 would be allowing Atty. The duty of the court is not only to ensure that a lawyer acts in a proper and lawful manner. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part of his client as the client is against abuse on the part of his counsel. Attorney’s fees become vested right when the order awarding those fees becomes final and executory and any compromise agreement removing that right must include the lawyer’s participation if it is to be valid against him. Agustin to get a lion’s share of the . To make the complainants liable for the P335. Otherwise. In all cases.A compromise agreement is binding only between its privies and could not affect the rights of third persons who were not parties to the agreement.1âwphi1 With no clear means to pay for costly legal services.36 However. It must be noted that the complainants were laborers who desired to contest their dismissal for being illegal.35 (Citations omitted) There is truth to Atty. but also to see to it that a lawyer is paid his just fees. 1998.18 attorney’s fees adjudged in the LA Decision of September 27. If the adverse party settled the suit in bad faith. The terms of the compromise subscribed to by the client should not be such that will amount to an entire deprivation of his lawyer’s fees. especially when the contract is on a contingent fee basis. National Power Corporation34 elaborate on this matter. Even if the compensation of a counsel is dependent only upon winning a case he himself secured for his client. Agustin whose remuneration was subject to the success of the illegal dismissal suit. The following discussions in Gubat v. the subsequent withdrawal of the case on the client’s own volition should never completely deprive counsel of any legitimate compensation for his professional services. instead of execution of the favorable judgment. equity dictates that an exception to such rule be made in this case with the end in view that the fair share of litigants to the benefits of a suit be not displaced by a contract for legal services. the compromise settlement cannot bind the lawyer as a third party. and the client shall be bound to pay the fees agreed upon with his lawyer. One such third party is the lawyer who should not be totally deprived of his compensation because of the compromise subscribed by the client. a client is bound to pay his lawyer for his services. guaranteed the atonement for their illegal termination. the terms of the compromise agreement will be set aside. so should not be the payment of a lawyer’s adequate and reasonable compensation for his services should the suit end by reason of the settlement. the company closed down and settlement of the suit for an amount lesser than their monetary claims.844. Agustin’s argument that the compromise agreement did not include or affect his attorney’s fees granted in the final and executory LA Decision dated September 27. Before a judgment was rendered in their favor. The determination of bad faith only becomes significant and relevant if the adverse party will likewise be held liable in shouldering the attorney’s fees. they hired Atty.

He is also. It follows that a lawyer’s compensation for professional services rendered is subject to the supervision of the court in order to maintain the dignity and integrity of the legal profession to which he belongs. a lawyer is not merely the defender of his client’s cause. This was the same situation prevailing at the time when Herrera manifested and reiterated before the CA that a concession has been reached by the parties. However. are the personal obligation of his clients. he is entitled to receive ten percent (10%) of the total settlement. an officer of the court and participates in the fundamental function of administering justice in society. Agustin was not totally deprived of his fees. It remains undisputed that Podden has ceased operations on December 1. skill and effort. 1998 was executed."40 More importantly. Also. it cannot be said that Atty. Agustin of his fees. but rather the inability of a dissolved corporation to fully abide by its adjudged liabilities and the certainty of payment on the part of the complainants.’"38 Further. make a contract for a contingent fee to be paid out of the proceeds of the litigation. to allow that to happen will contravene the raison d'être for contingent fee arrangements. the implementation of the award became unfeasible and a compromise settlement was more beneficial to the complainants as it assured them of reparation. Under the joint settlement agreement. 1998 was rendered. Herrera cannot be made solidarily liable for Atty. Oftentimes. We find the said amount reasonable considering that the nature of the case did not involve complicated legal issues requiring much time. Law advocacy. Thus. collusion between complainants and Herrera cannot be inferred from the fact that Atty. the contingent fee arrangement is the only means by which the poor and helpless can seek redress for injuries sustained and have their rights vindicated. Unless there is a showing that the complainants actually received an amount higher than that stated in the settlement agreement. as a rule. the complainants. first and foremost. The returns it births are simple rewards for a job done or service rendered. 1994 or almost four years before the LA Decision dated September 27. but no means with which to pay for legal services unless he can. It cannot be said that Herrera negotiated for the compromise agreement in bad faith.41 In view thereof. Agustin was unlawfully prejudiced. is not capital that yields profits. Agustin obtained lesser attorney’s fees under the compromise agreement as against that which he could have gained if the LA Decision dated September 27. Under the above circumstances. albeit at a reduced amount.39 "[L]awyering is not a moneymaking venture and lawyers are not merchants. it has been stressed.P385.000. Atty. the motivating force behind the settlement was not to deprive or prejudice Atty. . with the sanction of law. Contingent fee arrangements "are permitted because they redound to the benefit of the poor client and the lawyer ‘especially in cases where the client has meritorious cause of action.0037 received by the former from the compromise agreement that terminated the suit. There is no proof submitted supporting such inference. Agustin’s fees which.

INC. CARLOS EJERCITO. UNITED LABORATORIES. Both of them are hereby REQUIRED to report compliance with the foregoing order within a period of five days thereafter. Petitioner.pursuant to his undertaking in the joint compromise agreement. Agustin ten percent (10%) of the total settlement agreement within a period of ten (10) days from notice hereof. .R. ELIEZER SALAZAR.. the Court deems it reasonable to impose a period of ten (10) days within which Herrera should fulfill his obligation to Atty. WHEREFORE. premises considered.42 Since the entire provisions of the joint compromise agreement are not available in the records and only the relevant portions thereof were quoted in the CA Resolution dated September 30. . Emmanuel D. and/or JOSE YAO CAMPOS. versus - RICARDO C. SO ORDERED. JR. JOSE SOLIDUM. give.. Herrera is solely bound to compensate Atty. Pursuant to his undertaking in the joint compromise agreement. 2005. Petitioners. Agustin. x -----------------------------------------. SECOND DIVISION WESTMONT PHARMACEUTICALS. ERNESTO SALAZAR. INC. the petition is hereby DENIED. deliver to Atty. SAMANIEGO. The Resolution dated September 30. 2005 of the Court of Appeals in CA-G. Agustin at the rate of ten percent (10%) of the total settlement agreement.x RICARDO C. 85556 is AFFIRMED. SAMANIEGO.. respondent Alejandro Cruz- Herrera is ORDERED to pay. Respondent. SP No.

INC.R.versus - WESTMONT PHARMACEUTICALS. Nos. G... JJ. Chairperson. Respondents.. and GARCIA. G. AZCUNA. J. 146653-54 Present: PUNO. SANDOVAL-GUTIERREZ.R. INC. 2006 x ---------------------------------------------------------------------------------------x DECISION . and UNITED LABORATORIES. 147407-08 Promulgated: February 20. Nos. *CORONA.

He was then placed under floating status and assigned to perform duties not connected with his position. Inc. herein respondents. This provision allows the Labor Arbiter to order a change of venue in meritorious cases. The Labor Arbiter then set the case for preliminary conference during which Westmont and Unilab expressly reserved their right to contest the order denying their motion to dismiss. 1998. Later. Ricardo C. as amended. 1998.194. J. like fetching at the airport physicians coming from the provinces. (Unilab). The factual antecedents as borne by the records are: On May 5. and Jose Solidum. Samaniegos employer. the Labor Arbiter denied the motion to dismiss. 2001 and the Resolution[2] dated March 9. The complaint alleges that Unilab initially hired Samaniego as Professional Service Representative of its marketing arm. Ernesto Salazar. a complaint for illegal dismissal and damages against Westmont Pharmaceuticals.299. On June 26. making deposits in banks. Regional Arbitration Branch (RAB) No. 60400.R. Inc. citing Section 1. On August 13. Samaniego filed with the Office of the Labor Arbiter. Westmont and Unilab filed a motion to dismiss Samaniegos complaint on the ground of improper venue and lack of cause of action.00 only. 1998. Eliezer Salazar.: Before us are consolidated petitions for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. Also impleaded as respondents are Unilabs officers. .SANDOVAL-GUTIERREZ. Carlos Ejercito.00 to P2. His transfer to Metro Manila resulted in the diminution of his salary as his per diem was reduced from P13. fetching field men and doing messengerial works. In August 1995. Tuguegarao City. 2001 rendered by the Court of Appeals in CA-G. Samaniego filed an Opposition to the motion to which Westmont and Unilab filed a Reply. filed by both contending parties assailing the Decision[1] dated January 8. Jr. and that the action should only be against Westmont. he was transferred to Metro Manila pending investigation of his subordinate and physicians of Region II involved in a sales discount and Rx trade-off controversy. not with the Office of the Labor Arbiter in Tuguegarao City. Westmont. Cagayan. Rule IV of the NLRC New Rules of Procedure. Cagayan. Unilab promoted him as Senior Business Development Associate and assigned him in Isabela as Acting District Manager of Westmont and Chairman of Unilab Special Projects. Jose Yao Campos. SP No. II. They argued that the complaint should have been filed with the National Labor Relations Commission (NLRC) in Manila. (Westmont) and United Laboratories.

conducted further proceedings and rendered his now contested Decision despite the pendency of the appeal-treated Urgent Petition for Change of Venue.On September 3. 1999. Westmont and Unilab repeatedly filed motions for cancellation of the scheduled dates of hearing on the ground that their petition for change of venue has remained unresolved. They were therefore denied . he retained complete duplicate original copies of the same. The Labor Arbiter retained the complete duplicate original copies of the records and set the case for hearing. Westmont and Unilab interposed an appeal to the NLRC. finding that: x x x the Executive Labor Arbiter below only allowed the transmittal of the official records of the instant case to the Commission. On January 21. As a consequence. moral and exemplary damages. On the same date. On September 22. and that the Labor Arbiters Decision is not appealable. profit share. 1999. holding that when the cause of action arose. In the same Resolution. and actual. the NLRC declared the Labor Arbiters Decision null and void. On December 16. In its Resolution dated August 31. the NLRC. the NLRC dismissed the petition for change of venue. and payment of his full backwages from the date of his dismissal from the service up to the date of his actual reinstatement. plus 10% attorneys fees. 1998. Thus. as well as per diem differential. the Labor Arbiter issued an Order directing the parties to submit their respective position papers and supporting documents within twenty (20) days from notice. directed the Labor Arbiter to forward to the NLRC the records of the case. they filed with the Office of the Labor Arbiter in Cagayan a Motion to Suspend Proceedings in view of the pendency of their petition for change or transfer of venue in the NLRC. Westmont and Unilab filed with the NLRC an Urgent Petition to Change or Transfer Venue. They did not file their position papers nor did they attend the hearing. On September 8. acting on the petition to change venue. Samaniegos workplace was in Isabela over which the Labor Arbiter in Cagayan has jurisdiction. 1998. Throwing caution into the wind. after which the case shall be deemed submitted for decision. the Labor Arbiter rendered a Decision finding that Samaniego was illegally and unjustly dismissed constructively and ordering his reinstatement to his former position without loss of seniority rights and privileges. 1998. respondents-appellants were deprived of their opportunity to be heard and defend themselves on the issues raised in the instant case. 1998. the Labor Arbiter considered the case submitted for Decision based on the records and the evidence submitted by Samaniego.

1999 to August 31. On January 8.. premises considered. The respondents-appellants are DIRECTED to pay complainant-appellee the amount of Two Hundred Thirty Thousand Seven Hundred Twenty Pesos and Thirty Centavos (P230. rendered its Decision setting aside the NLRC Resolutions and affirming with modification the Labor Arbiters Decision in the sense that the award of moral damages was reduced from P5.000. The parties separately filed their motions for reconsideration but were both denied by the NLRC in its Resolution dated June 27. the date of issuance of this Resolution less any salary collected by him by way of execution pending appeal.30) representing his salary from January 1. thus: xxx While this Court concurs with the ruling of the Executive Labor Arbiter that there was constructive dismissal committed against Ricardo Samaniego. 1999..00 to P300. and the exemplary damages from without due process of law.of their right to due process of law in violation of Section 1. 2001. the main Appeal and Motion to Quash are hereby PARTIALLY GRANTED and the appeal-treated Petition for Change of Venue DISMISSED for lack of jurisdiction and/or merit.000. The dispositive portion of the NLRC Resolution reads: WHEREFORE. The entire records of the instant case are DIRECTED to be immediately remanded to the Executive Labor Arbiter of origin for immediate conduct of further proceeding. Article III of the Constitution which provides: No person shall be deprived of his. xxx .000.00 to P500. 2000. SO ORDERED. the Decision appealed from is declared NULL and VOID and the Order appealed from SUSTAINED insofar as the denial of the Motion to Dismiss is concerned.000. this Court finds the award on moral and exemplary damages unconscionable. acting on the parties petitions for certiorari. the Court of Appeals.000.00. Accordingly..

the NLRCs resolutions dated August 31. Section 3. However. and that they were denied due process. as amended. hence. not appealable. Westmont and Unilab allege that the Court of Appeals erred in denying their motion to dismiss by reason of improper venue and in sustaining the Labor Arbiters Decision declaring that Samaniego was constructively dismissed. he claims that the Appellate Court should not have reduced the Labor Arbiters award for moral and exemplary damages. The decision of the Executive Labor Arbiter dated December 16.[3] we held: An order denying a motion to dismiss is interlocutory. improper venue.000. 1999 and June 27. Assuming that the petition to change or transfer venue is the proper remedy. An order denying the motion to dismiss or suspending its resolution until the final determination of the case is not appealable. The petition to change or transfer venue filed by Westmont and Unilab with the NLRC is not the proper remedy to assail the Labor Arbiters Order denying their motion to dismiss. SO ORDERED. Any motion to dismiss on the ground of lack of jurisdiction. and so the proper remedy in such a case is to appeal after a decision has been rendered. respectively. . provides: SECTION 3. Samaniego maintains that the Court of Appeals did not err in its ruling. Motion to Dismiss. Hence.000. the respondent may file a motion to dismiss. Commission on Higher Education. Such Order is merely interlocutory. In Indiana Aerospace University v.00 and P300. shall be immediately resolved by the Labor Arbiter by a written order.WHEREFORE. In their petition. these consolidated petitions for review on certiorari filed by the opposing parties. still we find that the Court of Appeals did not err in sustaining the Labor Arbiters Order denying the motion to dismiss.00. prescription or forum shopping. or that the cause of action is barred by prior judgment. For his part. Rule V of the Rules of Procedure of the NLRC. 1998 is REINSTATED and AFFIRMED in all respect except with the following modification: the moral and exemplary damages are reduced to P500. 2000 are hereby SET ASIDE. On or before the date set for the conference.

rather than upon the substance and merits of the case. (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner. Cagayan. It shall include the place where the employee is supposed to report back after a temporary detail. Rule IV of the NLRC Rules of Procedure. workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. This axiom all the more finds applicability in cases involving labor and management because of the principle. as stated earlier. For purposes of venue. the Appellate Court was correct in affirming the Labor Arbiters finding that the proper venue is in the RAB No. v." allowing a different venue when the interests of substantial justice demand a different one. . the Constitutional protection accorded to labor is a paramount and compelling factor. for the said section uses the word "may. In any case. assignment or travel. it is undisputed that Samaniegos regular place of assignment was in Isabela when he was transferred to Metro Manila or when the cause of action arose. NLRC. provides: SECTION 1. provided the venue chosen is not altogether oppressive to the employer. Inc. xxx This provision is obviously permissive. Venue. In Sulpicio Lines.Section 1(a). In the case of field employees. as amended. their employers. Our permissive rules underlying provisions on venue are intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice. as well as ambulant or itinerant workers. that the State shall afford full protection to labor. their workplace is where they are regularly assigned.[4] we held: The question of venue essentially relates to the trial and touches more upon the convenience of the parties. Clearly. paramount in our jurisdiction. or where they are supposed to regularly receive their salaries/wages or work instructions from and report the results of their assignment to. II at Tuguegarao City. Here.

immediately after his transfer to Metro Manila. If the employer cannot overcome this burden of proof. a management prerogative. For their part. The ultimate issue for our resolution is whether the Court of Appeals erred in holding that Samaniego was constructively dismissed by Westmont and Unilab. We hold that such transfer is economically and emotionally burdensome on his part. There may also be constructive dismissal if an act of clear insensibility or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. Westmont and Unilab explain that his transfer is based on a sound business judgment. he was placed on floating status and directed to perform functions not related to his position. as applied to administrative proceedings. It must not involve a demotion in rank or a diminution of salary and other benefits. and the other for his family in Tuguegarao City.[6] Westmont and Unilab failed to discharge this burden. Samaniego was unceremoniously transferred from Isabela to Metro Manila. inconvenient. Worse. The requirement of due process in labor cases before a Labor Arbiter is satisfied when the parties are given the opportunity to submit their position papers to which they are supposed to attach all the supporting documents or documentary evidence that would prove their respective claims. To recapitulate. The employer must be able to show that the transfer is not unreasonable. the Labor Arbiter gave Westmont and Unilab.On the contention of Westmont and Unilab that they were denied due process. But they were obstinate. performing functions no longer supervisory in nature. an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of. and other benefits or their monetary equivalent. well settled is the rule that the essence of due process is simply an opportunity to be heard or. the employer has the burden of proving that the transfer of an employee is for just and valid grounds. He was constrained to maintain two residences one for himself in Metro Manila. such as genuine business necessity.[7] This was what happened to Samaniego.[5] As shown by the records. the opportunity to submit their position papers and supporting affidavits and documents. Thus. Samaniego claims that upon his reassignment and/or transfer to Metro Manila. or prejudicial to the employee. he is entitled to reinstatement without loss of seniority rights. Cagayan. they were not denied their right to due process. but thrice. the employees transfer shall be tantamount to unlawful constructive dismissal. . full backwages. in the event the Labor Arbiter determines that no formal hearing would be conducted or that such hearing was not necessary. not only once. In constructive dismissal. he was placed on floating status and was demoted in rank. inclusive of allowances. Clearly.

Costs against Westmont and Unilab. The award for moral and exemplary damages is deleted.[10] Records show that Samaniego was employed from October 1982 to May 27.R. petitioner. Hence.00. SP No.: Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Court are the Resolution[1] dated June 3. and other privileges and benefits. the circumstances obtaining in this case do not warrant the reinstatement of Samaniego. DECISION MARTINEZ. J. 60400 and CA-G. SP No. allowances and other benefits.000. 60478 are AFFIRMED. with MODIFICATION in the sense that Westmont and Unilab are ordered to pay Samaniego his separation pay equivalent to P425. SO ORDERED. SECOND DIVISION [G. A more equitable disposition would be an award of separation pay equivalent to at least one month pay. Antagonism caused a severe strain in the relationship between him and his employer. whichever is higher (with a fraction of at least six [6] months being considered as one [1] whole year).00. 1995 denying petitioner's motion for reconsideration.R.00. Respondent. from the time of his dismissal up to his supposed actual reinstatement. NATIONAL LABOR RELATIONS COMMISSION and MANILA MIDTOWN HOTEL.[9] in addition to his full backwages. Manila Midtown Hotel. 124013. vs. Complainant.[8] However. June 5. and its Resolution[2] dated October 20. the assailed Decision and Resolution of the Court of Appeals in CA-G.computed from the time his compensation was withheld from him up to the time of his actual reinstatement.000. 1994 of the respondent National Labor Relations Commission in NLRC NCR-00-10-05297-90. . he is entitled to a separation pay of P425. WHEREFORE. or their monetary equivalent.[11] or for sixteen (16) years and seven (7) months." which dismissed the illegal dismissal case filed by petitioner against private respondent company for lack of jurisdiction of the Labor Arbiter over the case. 1998. or one month pay for every year of service. 1998] ROSARIO MANEJA. entitled "Rosario Maneja. respondents. vs.R. plus his full backwages.000. with a monthly salary of P25. No.

1990.11: culpable carelessness .00 deposit made by Ieda. 1990. Petitioner and Loleng thereafter submitted their written explanation. 1990. Loleng then delivered the RLDC and the money to the cashier. a criminal case[7] for Falsification of Private Documents and Qualified Theft was filed before the Office of the City Prosecutor of Manila by private respondent against Loleng and petitioner. When petitioner saw that the second RLDC form was not time-stamped. the resolution recommending the filing of a case for estafa was reversed by 2nd Asst. .negligence or failure to follow specific instruction(s) or established procedure(s). Petitioner monitored the call. The call was unanswered. The second call was also unanswered. The second deposit of P500. a hotel cashier inquired about the P1. Restaurants and Allied Industries (NUWHRAIN) with an existing Collective Bargaining Agreement (CBA) with private respondent. 1990. The P500. she immediately placed it inside the machine which stamped the date February 15. 1985 as a telephone operator. In the afternoon of February 13.000. Ieda again made an RLDC and the page boy collected another P500.00 from a page boy of the hotel for a call by a Japanese guest named Hirota Ieda. a fellow telephone operator.00 by Ieda was later returned to him.Petitioner Rosario Maneja worked with private respondent Manila Midtown Hotel beginning January. and (2) OSDA 1. City Prosecutor Virgilio M. Petitioner refused to sign the notice and wrote therein "under protest. 1990. 1990. However.00 which was also given to the operator Loleng. a written report[5] was submitted by the chief telephone operator. Patag. On February 15. On March 23. After a search. 1990. with the recommendation that the offenses committed by the operators concerned covered violations of the Offenses Subject to Disciplinary Actions (OSDA): (1) OSDA 2. Rowena Loleng received a Request for Long Distance Call (RLDC) form and a deposit of P500. She was a member of the National Union of Workers in Hotels.00 inserted in the guest folio while the second deposit was eventually discovered inside the folder for cancelled calls with deposit and official receipts.[4] On March 20. petitioner was served a notice of dismissal[6] effective April 1. falsifying official document(s). the chief telephone operator issued a memorandum[3] to petitioner and Loleng directing the two to explain the February 15 incident. On March 7.00 deposit was forwarded to the cashier. Loleng found the first deposit of P500. In the evening. Loleng passed on the RLDC to petitioner for follow- up.01: forging. she wrote and changed the date to February 13." Meanwhile. 1990. Realizing that the RLDC was filed 2 days earlier.

540 x 7. P18. this case should have been dismissed outright. which is computed as follows: 3/23/90 . of Art. P2. in the decision. it is one that revolves on the matter of the implementation and interpretation of existing company policies.40 . is one within the jurisdictional ambit of the grievance procedure under the CBA and thereafter. The dispositive portion of the decision states that: "WHEREFORE. In his decision[8] dated May 29.On October 2.26/mos. Position papers were filed by the parties. 1992. the Labor Arbiter still assumed jurisdiction since Labor Arbiters under Article 217 of the same Labor Code. 1990. On this score alone. 217 of the Labor Code.10/31/90 = 7. The complaint was later amended to include a claim for unpaid wages. Thereafter. This observation is re-entrenched by the fact. one proper for voluntary arbitration. the motion to set the case for hearing filed by private respondent was granted by the Labor Arbiter and trial on the merits ensued. premises considered.). that complainant claims she is a member of NUWHRAIN with an existing CBA with respondent hotel.26/mos. judgment is hereby rendered as follows: Declaring complainant's dismissal by respondent hotel as illegally effected. we hereby state that on the face of the instant complaint. which per the last par. the Labor Arbiter stated that: Preliminarily. However.[9] Despite the aforequoted preliminary statement. if unresolved. Ordering further respondent to pay complainant the full backwages due her. petitioner filed a complaint for illegal dismissal against private respondent before the Labor Arbiter. as amended. are conferred original and exclusive jurisdiction of all termination case(sic. unpaid vacation leave conversion and moral damages. Ordering respondent to immediately reinstate complainant to her previous position without loss of seniority rights.440. Labor Arbiter Oswald Lorenzo found that the petitioner was illegally dismissed.

In the assailed Resolution[12] dated June 3.[10] An Opposition[11] was filed by petitioner. In this petition for certiorari. respondent is ordered to pay the 13th month pay due the complainant in the amount of P6.349.87 1/8/91 .23/mos. all other claims are hereby dismissed for lack of merit.4/29/92 = 15.17.16 x 15. as well as attorney's fees equivalent to ten (10) percent of the total award herein in the amount of P11.08 Moreover. and if unresolved. 7.16 x 2. respondent NLRC dismissed the illegal dismissal case for lack of jurisdiction of the Labor Arbiter because the same should have instead been subjected to voluntary arbitration.23/mos.7/mos.381. "SO ORDERED. P3.831. 1994.224.00 and P10.67 including moral and exemplary damages of P15. Petitioners motion for reconsideration[13] was denied by respondent NLRC for lack of merit. . P3.1/7/91 = 2.11/1/90 . 56.000.89 P81.589. petitioner ascribes to respondent NLRC grave abuse of discretion in - Ruling that the Labor Arbiter was without jurisdiction over the illegal dismissal case. proper for voluntary arbitration. Finally.980.000.189.00 respectively." Private respondent appealed the decision to the respondent commission on the ground inter alia that the Labor Arbiter erred in assuming jurisdiction over the illegal dismissal case after finding that the case falls within the jurisdictional ambit of the grievance procedure under the CBA.7/mos.

Not ruling that private respondent is estopped by laches from questioning the jurisdiction of the Labor Arbiter over the illegal dismissal case. in a fairly recent case ruled: The procedure introduced in RA 6715 of referring certain grievances originally and exclusively to the grievance machinery. Labor Arbiters shall have original and exclusive jurisdiction over cases involving termination disputes. 6715. and is not in estoppel by laches as contended by the petitioner. Reversing the decision of the Labor Arbiter based on a technicality notwithstanding the merits of the case. Petitioner contends that Article 217(a)(2) and (c) relied upon by respondent NLRC in divesting the labor arbiter of jurisdiction over the illegal dismissal case. cited the ruling of this Court in Sanyo Philippines Workers Union-PSSLU vs. as amended by Republic Act No. The reason for this. In its comment. It said: While it is conceded that under Article 217(a). Petitioner insists that her termination is not an unresolved grievance as there has been no grievance meeting between the NUWHRAIN union and the management. private respondent states that the issue of jurisdiction may be raised at any time and at any stage of the proceedings even on appeal. in holding that the Labor Arbiter lacks jurisdiction to hear the illegal dismissal case. For its part. should be read in conjunction with Article 261[14] of the Labor Code. petitioner adds. and when not settled at this level. It is the view of petitioner that termination cases arising from the interpretation or enforcement of company personnel policies pertaining to violations of Offenses Subject to Disciplinary Actions (OSDA). The respondent Commission. public respondent. are under the jurisdiction of the voluntary arbitrator only if these are unresolved in the plant-level grievance machinery. The legal issue in this case is whether or not the Labor Arbiter has jurisdiction over the illegal dismissal case. cited as basis therefor Article 217 of the Labor Code. Caizares[15] in dismissing the case for lack of jurisdiction of the Labor Arbiter. private respondent argues that the Labor Arbiter should have dismissed the illegal dismissal case outright after finding that it is within the jurisdictional ambit of the grievance procedure. Moreover. the Supreme Court. to a panel of . is that it has been a company practice that termination cases are not anymore referred to the grievance machinery but directly to the labor arbiter. through the Office of the Solicitor General.

voluntary arbitrators outlined in CBAs does not only include grievances arising from the
interpretation or implementation of the CBA but applies as well to those arising from the
implementation of company personnel policies. No other body shall take cognizance of
these cases. x x x. (Sanyo vs. Caizares, 211 SCRA 361, 372)[16]

We find that the respondent Commission has erroneously interpreted the aforequoted
portion of our ruling in the case of Sanyo, as divesting the Labor Arbiter of jurisdiction in a
termination dispute.

Article 217 of the Labor Code gives us the clue as to the jurisdiction of the Labor Arbiter, to

Article 217. Jurisdiction of 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 non-agricultural:

1.Unfair labor practice cases;

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 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;

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.

b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters.

c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company personnel
policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.

As can be seen from the aforequoted Article, termination cases fall under the original and
exclusive jurisdiction of the Labor Arbiter. It should be noted, however, that in the opening
paragraph there appears the phrase: Except as otherwise provided under this Code x x x. It
is paragraph (c) of the same Article which respondent Commission has erroneously
interpreted as giving the voluntary arbitrator jurisdiction over the illegal dismissal case.

However, Article 217 (c) should be read in conjunction with Article 261 of the Labor Code
which grants to voluntary arbitrators original and exclusive jurisdiction to hear and decide all
unresolved grievances arising from the interpretation or implementation of the collective
bargaining agreement and those arising from the interpretation or enforcement of company
personnel policies. Note the phrase unresolved grievances. In the case at bar, the
termination of petitioner is not an unresolved grievance.

The stance of the Solicitor General in the Sanyo case is totally the reverse of its posture in
the case at bar. In Sanyo, the Solicitor General was of the view that a distinction should be
made between a case involving interpretation or implementation of Collective Bargaining
Agreement or interpretation or enforcement of company personnel policies, on the one hand
and a case involving termination, on the other hand. It argued that the dismissal of the
private respondents does not involve an interpretation or implementation of a Collective
Bargaining Agreement or interpretation or enforcement of company personnel policies but
involves termination. The Solicitor General further said that where the dispute is just in the
interpretation, implementation or enforcement stage, it may be referred to the grievance
machinery set up in the Collective Bargaining Agreement or by voluntary arbitration. Where
there was already actual termination, i.e., violation of rights, it is already cognizable by the
Labor Arbiter.[17] We fully agree with the theory of the Solicitor General in the Sanyo case,
which is radically apposite to its position in this case.

Moreover, the dismissal of petitioner does not fall within the phrase grievances arising from
the interpretation or implementation of collective bargaining agreement and those arising
from the interpretation or enforcement of company personnel policies, the jurisdiction of
which pertains to the grievance machinery or thereafter, to a voluntary arbitrator or panel of
voluntary arbitrators. It is to be stressed that under Article 260 of the Labor Code, which
explains the function of the grievance machinery and voluntary arbitrator, (T)he parties to a
Collective Bargaining Agreement shall include therein provisions that will ensure the mutual
observance of its terms and conditions. They shall establish a machinery for the adjustment
and resolution of grievances arising from the interpretation or implementation of their
Collective Bargaining Agreement and those arising from the interpretation or enforcement of
company personnel policies. Article 260 further provides that the parties to a CBA shall name
or designate their respective representative to the grievance machinery and if the grievance
is unsettled in that level, it shall automatically be referred to the voluntary arbitrators
designated in advance by the parties to a CBA of the union and the company. It can thus be

deduced that only disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators.[18]

In the case at bar, the union does not come into the picture, not having objected or voiced
any dissent to the dismissal of the herein petitioner. The reason for this, according to
petitioner is that the practice in said Hotel in cases of termination is that the latter cases are
not referred anymore to the grievance committee; and that the terminated employee who
wishes to question the legality of his termination usually goes to the Labor Arbiter for
arbitration, whether the termination arose from the interpretation or enforcement of the
company personnel policies or otherwise.[19]

As we ruled in Sanyo, Since there has been an actual termination, the matter falls within the
jurisdiction of the Labor Arbiter. The aforequoted doctrine is applicable foursquare in
petitioners case. The dismissal of the petitioner does not call for the interpretation or
enforcement of company personnel policies but is a termination dispute which comes under
the jurisdiction of the Labor Arbiter.

It should be explained that company personnel policies are guiding principles stated in
broad, long-range terms that express the philosophy or beliefs of an organizations top
authority regarding personnel matters. They deal with matters affecting efficiency and well-
being of employees and include, among others, the procedure in the administration of
wages, benefits, promotions, transfer and other personnel movements which are usually not
spelled out in the collective agreement. The usual source of grievances, however, are the
rules and regulations governing disciplinary actions.[20]

The case of Pantranco North Express, Inc. vs. NLRC[21] sheds further light on the issue of
jurisdiction where the Court cited the Sanyo case and quoted the decision of therein Labor
Arbiter Olairez in this manner:

In our honest opinion we have jurisdiction over the complaint on the following grounds:

First, this is a complaint of illegal dismissal of which original and exclusive jurisdiction under
Article 217 has been conferred to the Labor Arbiters. The interpretation of the CBA or
enforcement of the company policy is only corollary to the complaint of illegal dismissal.
Otherwise, an employee who was on AWOL, or who committed offenses contrary to the
personnel policies(sic) can no longer file a case of illegal dismissal because the discharge is
premised on the interpretation or enforcement of the company policies(sic).

Second. Respondent voluntarily submitted the case to the jurisdiction of this labor tribunal. It
adduced arguments to the legality of its act, whether such act may be retirement and/or
dismissal, and prayed for reliefs on the merits of the case. A litigant cannot pray for reliefs on
the merits and at the same time attacks(sic) the jurisdiction of the tribunal. A person cannot
have ones cake and eat it too. x x x.

estoppel lies. Turning now to the merits of the case. the parties are not barred. and does not depend upon the will of the parties. and may not be conferred by consent of the parties or by estoppel (5 C. as that the court had no jurisdiction. In the assailed Resolution. is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or bodys jurisdiction. estoppel lies in this case. and the case was heard and decided upon a given theory. 861-863). We uphold the ruling of the Labor Arbiter that petitioner was illegally dismissed. Court of Appeals[24] in holding that private respondent is not in estoppel. such. The rule that jurisdiction is conferred by law. . Here. has no bearing thereon. At no time before or during the trial on the merits did private respondent assail the jurisdiction of the Labor Arbiter. if the lower court had jurisdiction. In Marquez vs. Estoppel had set in. the respondent NLRC has erroneously interpreted our ruling in the La Naval case. on appeal. The active participation of the party against whom the action was brought. for instance. coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending. the principle of estoppel applies.As to the second ground.S.[22] the Court said: x x x. However. for the same must exist as a matter of law. Secretary of Labor. Thus.J.[23] respondent NLRC cited La Naval Drug Corporation vs. Clearly. which was a mere obiter. (Underscoring ours) Again. Private respondent is estopped from questioning the jurisdiction of the Labor Arbiter before the respondent NLRC having actively participated in the proceedings before the former. petitioner correctly points out that respondent NLRC should have ruled that private respondent is estopped by laches in questioning the jurisdiction of the Labor Arbiter. the party who induced it to adopt such theory will not be permitted. If it had no jurisdiction. Under the said ruling. and raised the issue of jurisdiction before the Commission. but the case was tried and decided upon the theory that it had jurisdiction. to assume an inconsistent position that the lower court had jurisdiction. It was then too late. from assailing such jurisdiction. Private respondent took the cue only from the preliminary statement in the decision of the Labor Arbiter. on appeal. The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon whether the lower court actually had jurisdiction or not. The issue of jurisdiction was mooted by herein private respondents active participation in the proceedings below..

01. Private respondent blames petitioner for failure to follow established procedure in the hotel on a guests request for long distance calls. that the alleged culpable carelessness. notably: OSDA 2. however. the used RLDCs are recycled.[25] and (2) the employee must be given an opportunity to be heard and to defend himself. there exists no basis for personal appropriation by the petitioner of the money involved. Another reason is the alleged tampering of RLDC No. For instance. Petitioner.[27] Petitioners dismissal was grounded on culpable carelessness. the RLDC forms and the deposits are brought by the page boy directly to the operators instead of the cashiers if the latter are busy and cannot attend to the same. which is the Notice of Dismissal.11 . negligence and failure to follow specific instruction(s) or established procedure(s) under OSDA 1. except for the first and the last. .[28] While petitioner and her co-operator Loleng admitted that they indeed altered the date appearing therein from February 15.11. On the charge of taking of the money by petitioner. Lorenzo.01 . 1990 to February 13. As pointed out by Labor Arbiter Oswald B. the same was purposely made to reflect the true date of the transaction without any malice whatsoever on their part. Even the page boys do not actually check the serial numbers of all RLDCs in one batch.Culpable negligence or failure to follow specific instruction(s) or established procedure(s) On this score. we are persuaded by the complainants arguments that under OSDA 1. and. it is to be noted that the second P500.11. Furthermore.00 deposit made by the Japanese guest Ieda was later discovered to be inserted in the folder for cancelled calls with deposit and official receipts. falsifying official document(s) OSDA 1. she avers that the telephone operators are not conscious of the serial numbers in the RLDCs and at times. infractions of this sort is not without qualifications.The requisites of a valid dismissal are (1) the dismissal must be for any of the causes expressed in Article 282 of the Labor Code.[26] The substantive and procedural laws must be strictly complied with before a worker can be dismissed from his employment because what is at stake is not only the employees position but his livelihood. which is. Thus. having forged or falsified official document(s) under OSDA 2.Forging. explained that the usual or established procedures are not followed by the operators and hotel employees when circumstances warrant. negligence or failure to follow instruction(s) or established procedure(s). 862406. thus: The specifics of the grounds relied by respondent hotels dismissal of complainant are those stated in Annex F of the latters POSITION PAPER.

RESULTING IN LOSS OR DAMAGE TO COMPANY PROPERTY. to sustain the generalized charge of respondent hotel under OSDA 1. we too.[29] Given the factual circumstances of the case. Dismissal is the supreme penalty that can be meted to an employee and its imposition cannot be justified where the evidence is ambivalent. in that the alleged act of falsification must have been done IN SUCH A WAY AS TO MISLEAD THE USER(S) THEREOF. find no evidence that complainant MANEJA had the intention to profit thereby nor had misappropriated the P500. Any ambiguity or ambivalence on the ground relied upon by an employer in terminating the services of an employee denies the latter his full right to contest its legality. Fairness cannot countenance such ambiguity or ambivalence. like the city prosecutor above-mentioned that there was no evidence on the part of MANEJA to have unlawfully taken the P500. therefore. this is where labor tribunals should come in and help correct interpretation of company policies which in the enforcement thereof wreaks havoc to the constitutional guarantee of security of tenure. when he ruled that an altercation which makes the document speak the truth cannot be the foundation of a criminal action. City Prosecutor of the City of Manila. The employer has the burden of . we too are of the finding. As to the charge of qualified theft. As a matter of fact. the respondents charge under OSDA 1. the 2nd Asst.11 would unduly be sanctioning the imposition of too harsh a penalty . Again. we cannot deduce dishonesty from the act and omission of petitioner.[32] It must.[33] An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. who exculpated complainant MANEJA from the charges of falsification of private documents and qualified theft under IS No. This can irreparably wreck her life as an employee for no employer will take to its bosom a dishonest employee.00 either from the hotel or from guest IEDA on 13 February 1990 and moreover. Our norms of social justice demand that we credit employees with the presumption of good faith in the performance of their duties. based on the facts of the complained act. 90-11083 and marked Annex H of complainants POSITION PAPER.which is dismissal. we are in agreement with the jurisprudence cited by VIRGILIO M. In this case. PATAG.[30] especially petitioner who has served private respondent since 1985 up to 1990 without any tinge of dishonesty and was even named Model Employee for the month of April.11 on the alleged falsification of private document is also with a qualification. In the same tenor. there is no quantum of proof whatsoever. 1989.dishonesty. From the facts obtaining in this case. Apparently. except the general allegations in respondents POSITION PAPER and other pleadings that loss or damage to company property resulted from the charged infraction. To our mind.00 in question. there appeared no one to have been misled on the change of date from RLDC #862406 FROM 15 TO 13 February 1990.[31] Petitioner has been charged with a very serious offense . the exercise of little flexibility by complainant and co-employees which is predicated on good faith should not be taken against them and more particularly against the complainant herein. be based on a clear and not on an ambiguous or ambivalent ground.

1990. He cannot be deprived of his work without due process of law. She was not accorded the opportunity to fully defend herself. including legal representation.[37] Considering that petitioner denied having allegedly taken the second P500. Thereafter.[36] In the case at bar. petitioner and her co-operator Loleng were issued a memorandum on March 7. 1990. On March 11. (b) the second informs the employee of the employers decision to dismiss him.proving that the dismissal was indeed for a valid and just cause. Absent such hearing. is complied with as long as there was an opportunity to be heard.[34] Failure to do so results in a finding that the dismissal was unjustified. and. no hearing was actually conducted before her employment was terminated. on the other hand. .00 deposit of the Japanese guest which was eventually found. we now determine if the rudiments of due process have been duly accorded to her. 1990.[35] Finding that there was no just cause for dismissal of petitioner. and not necessarily that an actual hearing was conducted. a written report was made with a recommendation that the offenses committed by them were covered by OSDA 1. and.[38] It bears stressing that a workers employment is property in the constitutional sense.01. The requirement of a hearing. they submitted their written explanation thereto. having made the alteration of the date on the second RLDC merely to reflect the true date of the transaction. Consultations or conferences may not be a substitute for the actual holding of a hearing. On March 20. Procedural due process requires further that he can only be dismissed after he has been given an opportunity to be heard. It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two written notices before the termination of employment can be effected: (a) the first apprises the employee of the particular acts or omissions for which his dismissal is sought. An examination of the record reveals that no hearing was ever conducted by private respondent before petitioner was dismissed. on March 23. While it may be true that petitioner submitted a written explanation. these circumstances should have at least warranted a separate hearing to enable petitioner to fully ventilate her side. Well-settled is the dictum that the twin requirements of notice and hearing constitute the essential elements of due process in the dismissal of employees. 1990.11 and 2. Substantive due process mandates that an employee can only be dismissed based on just or authorized causes. The import of due process necessitates the compliance of these two aspects. petitioners right to due process was clearly violated. Every opportunity and assistance must be accorded to the employee by the management to enable him to prepare adequately for his defense. petitioner was served with a notice of dismissal for said violations effective April 1. 1990.

Presidential Decree No. as when the latter knowingly made false allegations of a supposed valid cause when none existed. 851.[42] The award of attorneys fees amounting to ten percent (10%) of the total award by the labor arbiter is justified under Article 111 of the Labor Code.[40] The award of moral and exemplary damages to petitioner is also warranted where there is lack of due process in effecting the dismissal. The grant of moral damages to the employees by reason of such conduct on the part of the company is sanctioned by Article 2219. which allows recovery of such damages in actions referred to in Article 21.Accordingly. the petition is GRANTED and the assailed resolutions of the respondent National Labor Relations Commission dated June 3. WHEREFORE. No. THIRD DIVISION . moral and exemplary damages may be awarded in favor of the former. provides that employees are entitled to the thirteenth-month pay benefit regardless of their designation and irrespective of the method by which their wages are paid. as amended by Memorandum Order No. NLRC[39] that the amount of backwages to be awarded to an illegally dismissed employee must be computed from the time he was dismissed to the time he is actually reinstated.[41] The anti-social and oppressive abuse of its right to investigate and dismiss its employees constitute a violation of Article 1701 of the New Civil Code which prohibits acts of oppression by either capital or labor against the other. Where the termination of the services of an employee is attended by fraud or bad faith on the part of the employer. We ruled in the case of Bustamante vs. we hold that the labor arbiter did not err in awarding full backwages in view of his finding that petitioner was dismissed without just cause and without due process. 10 of the Civil Code. Petitioner is likewise entitled to the thirteenth-month pay. 1992 of the Labor Arbiter is therefore REINSTATED. The decision dated May 29. SO ORDERED. without deducting the earnings he derived elsewhere pending the resolution of the case. premises considered. 1995 are hereby REVERSED AND SET ASIDE. 1994 and October 20. and Article 21 on human relations. 28.

INC. DULAY. No. 172642 Present: PERALTA. INC. JR. VILLARAMA. J.versus ABOITIZ JEBSEN MARITIME. and PERLAS-BERNABE. and GENERAL CHARTERERS. . DULAY. Promulgated: June 13.. Acting Chairperson. G.R. JJ.* ABAD. Petitioner. J.ESTATE OF NELSON R. represented by his wife MERRIDY JANE P.. 2012 x-----------------------------------------------------------------------------------------x DECISION PERALTA.: .** MENDOZA. Respondents..

However. Nelson was detailed in petitioners vessel. Merridy Jane filed a complaint with the NLRC Sub-Regional Arbitration Board in General Santos City against GCI for death and medical benefits and damages. or 25 days after the completion of his employment contract. On March 8. On March 5. received P20. (GCI). on the other hand. He initially worked as an ordinary seaman and later as bosun on a contractual basis. since 1986. for brevity) was employed by [herein respondent] General Charterers Inc. The factual and procedural antecedents of the case.000. Merridy Jane contended that she is entitled to the aggregate sum of Ninety Thousand Dollars ($90. 2001. 2006 of the Court of Appeals (CA) in CA-G. GCIs collective bargaining agent. At the time of his death. Dulay (Nelson. on January 29. SP No. asserted that the NLRC had no jurisdiction over the action on account of the absence of employer-employee relationship between GCI and Nelson at the time of the latters death. are as follows: Nelson R.000. Joven Mar. Nelson also had no claims against petitioners for sick leave allowance/medical benefit by reason of the completion of his contract with GCI. 2001. [Herein respondents].R. Merridy Jane. They further alleged that private respondent is not entitled to death benefits because petitioners are only liable for such in case of death of the seafarer during the term of his contract .00) pursuant to [A]rticle 20 (A)1 of the CBA x x x xxxx Merridy Jane averred that the P20.[00]. From September 3. Nelsons widow.Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision[1] and Resolution[2] dated July 11.000. 2000. the MV Kickapoo Belle. 2000. On August 13. 76489.000. a subsidiary of co-petitioner [herein co-respondent] Aboitiz Jebsen Maritime Inc.00 already received by Joven Mar should be considered advance payment of the total claim of US$90. as summarized by the CA. Nelson was a bona fide member of the Associated Marine Officers and Seamans Union of the Philippines (AMOSUP). 2001. Nelson died due to acute renal failure secondary to septicemia. 2005 and April 18. 1999 up to July 19.00 from [respondents] pursuant to article 20(A)2 of the CBA and signed a Certification acknowledging receipt of the amount and releasing AMOSUP from further liability. the grievance procedure was declared deadlocked as petitioners refused to grant the benefits sought by the widow. thereafter claimed for death benefits through the grievance procedure of the Collective Bargaining Agreement (CBA) between AMOSUP and GCI. Nelsons brother.

the same was already discharged. [the NLRC] affirmed the Labor Arbiters decision as to the grant of death benefits under the CBA but reversed the latters ruling as to the proximate cause of Nelsons death. as petitioners stressed. It took cognizance of the case by virtue of Article 217 (a). 2005. The Labor Arbiter ruled in favor of private respondent. x x x xxxx However.pursuant to the POEA contract and the cause of his death is not work-related.00. at the time of judgment x x x xxxx The Labor Arbiter also ruled that the proximate cause of Nelsons death was not work- related.000. Petitioners admitted liability only with respect to article 20(A)2 [of the CBA]. On appeal.00 less P20.621.00.000. and.300. paragraph 6 of the Labor Code and the existence of a reasonable causal connection between the employer-employee relationship and the claim asserted. in ruling that a different provision of the CBA covers the death claim.00 already received by Merridy Jane through her attorney-in-fact. in setting aside the release and quitclaim executed by the attorney-in-fact and not considering the P20. in reversing the findings of the Labor Arbiter that the cause of death is not work-related. the petition is hereby GRANTED and the case is REFERRED to the National Conciliation and Mediation Board for the designation of the Voluntary Arbitrator or the constitution of a panel of Voluntary Arbitrators for the appropriate resolution of the issue on the matter of the applicable CBA provision. the CA promulgated its assailed Decision. the dispositive portion of which reads as follows: WHEREFORE.[3] Herein respondents then filed a special civil action for certiorari with the CA contending that the NLRC committed grave abuse of discretion in affirming the jurisdiction of the NLRC over the case. in view of the foregoing. .000. It ordered the petitioner to pay P4. the equivalent of US$90. On July 11.

8042 provide as follows: SEC.Notwithstanding any provision of law to the contrary. otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995. moral. Article 217(c) of the Labor Code.A. Petitioner filed a Motion for Reconsideration but the CA denied it in its Resolution of April 18. the instant petition raising the sole issue of whether or not the CA committed error in ruling that the Labor Arbiter has no jurisdiction over the case. As such. the same basically involves the interpretation and application of the provisions in the subject CBA. Money Claims. in turn. 10. confers jurisdiction upon voluntary arbitrators over interpretation or implementation of collective bargaining agreements and interpretation or enforcement of company personnel policies. on the other hand.) 8042. Hence. Petitioner contends that Section 10 of Republic Act (R. exemplary and other forms of damages. 2006. . the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual. within ninety (90) calendar days after filing of the complaint. The pertinent provisions of Section 10 of R. vests jurisdiction on the appropriate branches of the NLRC to entertain disputes regarding the interpretation of a collective bargaining agreement involving migrant or overseas Filipino workers.A.SO ORDERED. jurisdiction belongs to the voluntary arbitrator and not the labor arbiter. states that: . Petitioner argues that the abovementioned Section amended Article 217 (c) of the Labor Code which.[4] The CA ruled that while the suit filed by Merridy Jane is a money claim. the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide.

Section 10 of R.A. shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. respondents insist that in the present case. grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement. exemplary and other forms of damages. Article 261 of the Labor Code reads. paragraph (c) as well as Article 261 of the Labor Code remain to be the governing provisions of law with respect to unresolved grievances arising from the interpretation and implementation of collective bargaining agreements. its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes. It is true that R. On their part. violations of a Collective Bargaining Agreement. 8042 is a special law governing overseas Filipino workers. which is cited by petitioner. of claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual. The Commission. simply speaks. a careful reading of this special law would readily show that there is no specific provision thereunder which provides for jurisdiction over disputes or unresolved grievances regarding the interpretation or implementation of a CBA. The petition is without merit. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. thus: ARTICLE 261. jurisdiction remains with voluntary arbitrators. gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. except those which are gross in character. Under these provisions of law. 8042. On . Accordingly. Article 217. However. For purposes of this article. in general. moral.xxxx (c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements.A. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators.

. the specific or special provisions of the Labor Code govern. Section 7 of the present Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995. which states that [f]or OFWs with collective bargaining agreements. In any case. it is clear that the parties. The Company and the Union further agree that they will use their best endeavor to ensure that any dispute will be discussed. or enforcement of Company policies. as amended by Republic Act No. the same shall be settled through negotiation. the instant case involves a situation where the special statute (R. the union to which petitioner belongs. in the first place. 8042) refers to a subject in general. the case shall be submitted for voluntary arbitration in accordance with Articles 261 and 262 of the Labor Code. Stated differently. It is settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed. provides as follows: The Company and the Union agree that in case of dispute or conflict in the interpretation or application of any of the provisions of this Agreement. the basic issue raised by Merridy Jane in her complaint filed with the NLRC is: which provision of the subject CBA applies insofar as death benefits due to the heirs of Nelson are concerned.1 of the CBA entered into by and between respondent GCI and AMOSUP. Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary arbitrators have jurisdiction over cases arising from the interpretation or implementation of collective bargaining agreements. the Court agrees with petitioner's contention that the CBA is the law or contract between the parties.the other hand.[7] It may not be amiss to point out that the abovequoted provisions of the CBA are in consonance with Rule VII.[5] In the present case. which the general statute (Labor Code) treats in particular.A. Article 13. really intended to bring to conciliation or voluntary arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. conciliation or voluntary arbitration. 10022.[6] (Emphasis supplied) From the foregoing. resolved and settled amicably by the parties hereof within ninety (90) days from the date of filing of the dispute or conflict and in case of failure to settle thereof any of the parties retain their freedom to take appropriate action. The Court agrees with the CA in holding that this issue clearly involves the interpretation or implementation of the said CBA. The Court notes that the said Omnibus Rules and Regulations were promulgated by the Department of Labor and Employment (DOLE) and the Department of Foreign Affairs (DFA) and that these departments were mandated to consult with the Senate Committee on Labor and Employment and the House of Representatives Committee on Overseas Workers Affairs. Thus.

under the third paragraph. as well as the DFA and the POEA is that with respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a collective bargaining agreement.In the same manner. the parties covered by a collective bargaining agreement shall submit the claim or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators.[8] Such rules and regulations partake of the nature of a statute and are just as binding as if they have been written in the statute itself. promulgated by the Philippine Overseas Employment Administration (POEA). the same shall be appointed from the accredited voluntary arbitrators of the National Conciliation and Mediation Board of the Department of Labor and Employment. have the force of law.[10] No less than the Philippine Constitution provides. Dispute Settlement Procedures. DFA and POEA is also in consonance with the policy of the state to promote voluntary arbitration as a mode of settling labor disputes. provides as follows: Section 29. contracting partners and Filipino seafarers.[9] In the instant case. The Philippine Overseas Employment Administration (POEA) shall exercise original and exclusive jurisdiction to hear and decide disciplinary action on cases. in consultation with their counterparts in the respective committees of the Senate and the House of Representatives. the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel of arbitrators. rules and regulations involving employers. It is elementary that rules and regulations issued by administrative bodies to interpret the law which they are entrusted to enforce. pursuant to Republic Act (RA) 8042. the Court finds no cogent reason to depart from this rule. If the parties are not covered by a collective bargaining agreement. and are entitled to great respect. If there is no provision as to the voluntary arbitrators to be appointed by the parties. Article XIII. principals. (Emphasis supplied) It is clear from the above that the interpretation of the DOLE. otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995 or to the original and exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. involving or arising out of violations of recruitment laws. thereof that [t]he State shall promote the principle of shared responsibility . the parties may at their option submit the claim or dispute to either the original and exclusive jurisdiction of the National Labor Relations Commission (NLRC). Section 3. − In cases of claims and disputes arising from this employment. It is only in the absence of a collective bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration. which are administrative in character. Section 29 of the prevailing Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels. The above interpretation of the DOLE.

including conciliation. J.R. 76489 dated July 11. The Decision and Resolution of the Court of Appeals in CA-G. SP No.. as modes of settling labor or industrial disputes. THE REGIONAL .TINGA.. SECOND DIVISION PEOPLES BROADCASTING G.between workers and employers and the preferential use of voluntary modes in settling disputes. are AFFIRMED. On the basis of the foregoing. 2006. VELASCO. . WHEREFORE. JJ. including voluntary arbitration. No. SO ORDERED. Present: CARPIO MORALES. 179652 (BOMBO RADYO PHILS. respectively. 2005 and April 18.R. Petitioner.). the Court finds no error in the ruling of the CA that the voluntary arbitrator has jurisdiction over the instant case.. the petition is DENIED.** and BRION. mediation and conciliation. and shall enforce their mutual compliance therewith to foster industrial peace. Article 211 of the Labor Code provides the declared policy of the State [t]o promote and emphasize the primacy of free collective bargaining and negotiations.versus .* Acting Chairperson. LEONARDO-DE CASTRO. THE SECRETARY OF THE DEPARTMENT OF LABOR AND Promulgated: EMPLOYMENT. INC. Consistent with this constitutional provision. JR.

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.[1] The petition traces its origins to a complaint filed by Jandeleon Juezan (respondent) against Peoples Broadcasting Service. VII. 00855. 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. May 8. x----------------------------------------------------------------------------x DECISION TINGA. I.[3] the Labor Inspector wrote under the heading Findings/Recommendations non-diminution of benefits and Note: Respondent deny employer-employee relationship with the complainant. 2009 and JANDELEON JUEZAN. J. the Labor Inspector made the following notations: . respectively.: The present controversy concerns a matter of first impression. (Bombo Radyo Phils. Inc) (petitioner) for illegal deduction. 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. on the other. premium pay for holiday and rest day and illegal diminution of benefits. delayed payment of wages and non-coverage of SSS. Inc. G.DIRECTOR. PAG-IBIG and Philhealth before the Department of Labor and Employment (DOLE) Regional Office No. 13th month pay. on the one hand.see Notice of Inspection results.R. in C. Cebu City. non-payment of service incentive leave. Respondents.A. In the Inspection Report Form. In the Notice of Inspection Results[4] also bearing the date 23 September 2003. DOLE REGION VII.[2] On the basis of the complaint. and the jurisdiction of the National Labor Relations Commission.. CEB- SP No. the DOLE conducted a plant level inspection on 23 September 2003.

000.[5] Petitioner was required to rectify/restitute the violations within five (5) days from receipt.726. claiming that the Regional Director gave credence to the documents offered by respondent without examining the originals. 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.5 mos = P 6. summary investigations were conducted. They (mgt.) has [sic] not control of the talent if he ventures into another contract w/ other broadcasting industries.[8] On appeal to the DOLE Secretary. billing statement. but at the same time he missed or failed to consider petitioners evidence. The Court of Appeals held that petitioner was not deprived of due process as the essence thereof is only an opportunity to be heard.[9] Petitioner elevated the case to the Court of Appeals. As proof of this. management presented photocopies of cash vouchers. Rodolfo M. summary of billing of drama production etc.000 (August 1/03 to Sept 15/03) Note: Recommend for summary investigation or whatever action deem proper. It also added that the case was beyond the jurisdiction of the DOLE and should have been considered by the labor arbiter because respondents claim exceeded P5. employments of specific undertaking (a contract between the talent director & the complainant). It further ruled that the latter had the power to order and enforce compliance with labor standard laws irrespective of the amount of . complainant Juezans alleged violation of non-diminution of benefits is computed as follows: @ P 2. 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.Management representative informed that complainant is a drama talent hired on a per drama participation basis hence no employer-employeeship [sic] existed between them. which petitioner had when it filed a motion for reconsideration with the DOLE Secretary. Sabulao (Regional Director) ruled that respondent is an employee of petitioner. Petitioner sought reconsideration of the Order.[6] In his Order dated 27 February 2004.30.00. No rectification was effected by petitioner. Petitioners motion for reconsideration was denied.[7] DOLE Regional Director Atty. supervised and disciplined respondent.000/15 days + 1. thus. On the other hand. In its Order dated 27 January 2005. with the parties eventually ordered to submit their respective position papers. 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. petitioner denied once more the existence of employer- employee relationship. and that the former is entitled to his money claims amounting to P203.

individual claims because the limitation imposed by Article 29 of the Labor Code had been repealed by Republic Act No. or any plain. Respondent stands by the propriety of the Court of Appeals ruling that there exists an employer-employee relationship between him and petitioner. 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. as amended by Republic Act 7730. 7730. has jurisdiction over respondents claim. particularly the claim that no employer-employee relationship had ever existed between petitioner and respondent.[12] It adds that the Court of Appeals committed grave abuse of discretion when it dismissed petitioners appeal without delving on the issues raised therein. 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. which removes the jurisdiction of the Secretary of Labor and Employment or his duly authorized representatives. He invokes Republic Act No. and in cases where the relationship of employer-employee still exists. and not the DOLE Secretary.[14] II. 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. should have filed a Petition for Review. petitioner.[10] Petitioner sought reconsideration of the decision but its motion was denied. Finally. in view of Articles 217 and 128 of the Labor Code. It reads: Article 128 (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary.[11] Before this Court. petitioner argues that the National Labor Relations Commission (NLRC). Finally. from the effects of the restrictive provisions of Article 129 and 217 of the Labor Code. speedy and adequate remedy in the ordinary course of law available to it. The significance of this case may be reduced to one simple questiondoes the Secretary of Labor have the power to determine the existence of an employer-employee relationship? To resolve this pivotal issue. respondent argues that the instant petition for certiorari is a wrong mode of appeal considering that petitioner had earlier filed a Petition for Certiorari. 7730. The Secretary or his duly authorized representative shall issue writs of execution to the appropriate authority for the enforcement of their orders. (emphasis supplied) . petitioner avers that there is no appeal. one must look into the extent of the visitorial and enforcement power of the DOLE found in Article 128 (b) of the Labor Code. instead. Mandamus and Prohibition with the Court of Appeals. On the other hand. respondent posits that the Court of Appeals did not abuse its discretion.

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. 3. Abuan. and (b) where no such relationship has ever existed. the existence of an employer-employee . The first situation is categorically covered by Sec. In the second situation especially. a persons entitlement to labor standard benefits under the labor laws presupposes the existence of employer-employee relationship in the first place. Accordingly. The provision is quite explicit that the visitorial and enforcement power of the DOLE comes into play only in cases when the relationship of employer-employee still exists. whether accompanied by an allegation of illegal dismissal. namely: (a) where the employer-employee relationship has ceased. the DOLEs power does not apply in two instances. Rule 11 of the Rules on the Disposition of Labor Standards Cases[15] issued by the DOLE Secretary. 3. 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. 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. if on the face of the complaint. 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. It reads: Rule II MONEY CLAIMS ARISING FROM COMPLAINT/ROUTINE INSPECTION Sec.[17] In the first situation. Of course. the case. shall immediately be endorsed by the Regional Director to the appropriate branch of the National Labor Relations Commission (NLRC).[16] this Court recognized the first situation and accordingly ruled that a complainants allegation of his illegal dismissal had deprived the DOLE of jurisdiction as per Article 217 of the Labor Code. Complaints where no employer-employee relationship actually exists. it can be ascertained that employer-employee relationship no longer exists. Where employer-employee relationship no longer exists by reason of the fact that it has already been severed. The reason is obvious. 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. v. Necessarily. claims for payment of monetary benefits fall within the exclusive and original jurisdiction of the labor arbiters. In the recent case of Bay Haven.

because the elements of such a relationship are not verifiable from a mere ocular examination. Thus. If the Secretary of Labor proceeds to exercise his visitorial and enforcement powers absent the first requisite. Such prerogatival determination. incidental and collateral to the DOLEs primary function of enforcing labor standards provisions. which is the NRLC. More often than not. To wit: . such determination is merely preliminary.relationship is a matter which is not easily determinable from an ordinary inspection. The rationale underlying this limitation is to eliminate the prospect of competing conclusions of the Secretary of Labor and the NLRC. The determination of the existence of employer-employee relationship is still primarily lodged with the NLRC. which is best resolved by the quasi-judicial body. rather than an administrative official of the executive branch of the government. on a matter fraught with questions of fact and law. the question of employer- employee relationship becomes a battle of evidence. The intricacies and implications of an employer-employee relationship demand that the level of scrutiny should be far above the cursory and the mechanical. 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. This is the meaning of the clause in cases where the relationship of employer-employee still exists in Art. particularly documents found in the employers office are the primary source materials. as the dissent proposes. or alternatively. Indeed. While documents. cannot be coextensive with the visitorial and enforcement power itself. was there ever an employer-employee relationship to speak of. his office confers jurisdiction on itself which it cannot otherwise acquire. necessarily so. The approach suggested by the dissent is frowned upon by common law. the determination of which should be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC. what may prove decisive are factors related to the history of the employers business operations. 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. however. two important questions must be resolved: (1) Does the employer-employee relationship still exist. its current state as well as accepted contemporary practices in the industry. before the DOLE may exercise its powers under Article 128. 128 (b).

is within its jurisdiction. could have very well enjoined other employees to complain with the DOLE. 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. Under this approach. upon this preliminary question. the duty of the employer to adhere to those labor standards with respect to the non-employees is questionable. petitioner could ill-afford to disclaim an employment relationship with all of the people under its aegis. At least a prima facie showing of such absence of relationship. Among these differentiated rights are those accorded by the labor standards provisions of the Labor Code. Necessarily. if true. the actual existence of an employer-employee relationship affects the complexion of the putative findings that the Secretary of Labor may determine.[18] A more liberal interpretative mode. the dissent fails. yet. Respondent. . has also emerged in ascertaining the jurisdictional boundaries of administrative agencies whose jurisdiction is established by statute. making up together that subject matter which. whether some collateral matter be or be not within the limits. as in this case. This decision should not be considered as placing an undue burden on the Secretary of Labor in the exercise of visitorial and enforcement powers. 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. is needed to preclude the DOLE from the exercise of its power. pragmatic or functional analysis. since employees are entitled to a different set of rights under the Labor Code from the employer as opposed to non-employees. the Labor Code and any labor law. the Court examines the intended function of the tribunal and decides whether a particular provision falls within or outside that function.[I]t is a general rule. nor seen as an unprecedented diminution of the same. and. If there is no employer-employee relationship in the first place. especially if he were an employee. 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. at the same time. or rules and regulations issued pursuant thereto. 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. its decision must always be open to inquiry in the superior court. rather than making the provision itself the determining centerpiece of the analysis. and however its decision may be final on all particulars. and however necessary in many cases it may be for it to make a preliminary inquiry. which the Secretary of Labor is mandated to enforce. but rather a recognition of the statutory limitations thereon.[19] Yet even under this more expansive approach. wage order. and enforcing. A reading of Art.

It is not enough that the evidence be simply considered. it is the Courts considered view that the existence of employer. 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. this Court will not hesitate to set aside the labor tribunals 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. As a general rule. letter-contracts denominated as Employment for a Specific . petitioner. and was even made in disregard of the evidence on record. Certainly. or at least prima facie determined by the labor inspector. The standard is substantial evidence as in all other quasi-judicial agencies. III. Nevertheless.Without a doubt. summary billings evidencing payment to the alleged real employer of respondent. Likewise. and hence cannot be relied upon as proof of employer-employee relationship. Aside from lack of jurisdiction. even if the labor inspector had noted petitioners manifestation and documents in the Notice of Inspection Results. The onset of arbitrariness is the advent of denial of substantive due process. there is another cogent reason to to set aside the Regional Directors 27 February 2004 Order. namely: cash vouchers. based on the evidence offered. which found respondent as an employee of petitioner and directed the payment of respondents money claims. the same findings should be supported by substantial evidence from which the said tribunals can make its own independent evaluation of the facts. it is clear that he did not give much credence to said evidence. the Supreme Court is not a trier of facts. as he did not find the need to investigate the matter further. as discussed earlier. From that point on.[21] At the onset. checks and statements of account.[20] In the same manner. 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 prudent recourse on the part of the DOLE should have been to refer respondent to the NLRC for the proper dispensation of his claims. otherwise. this Court will not uphold the tribunals conclusion. during the inspection by looking at the records of petitioner which can be found in the work premises. a preliminary determination. Furthermore. is not supported by substantial evidence. It applies only to issues other than the fundamental issue of existence of employer-employee relationship. even the evidence relied on by the Regional Director in his order are mere self-serving declarations of respondent. A contrary rule would lead to controversies on the part of labor officials in resolving the issue of employer-employee relationship. it must not be rendered with grave abuse of discretion. since the inception of this case had been consistent in maintaining that respondent is not its employee. 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. A careful study of the case reveals that the said Order. Considering that the documents shown by petitioner.employee relationship could have been easily resolved.

Undertaking, prima facie negate the existence of employer-employee relationship, the labor
inspector could have exerted a bit more effort and looked into petitioners payroll, for
example, or its roll of employees, or interviewed other employees in the premises. After all,
the labor inspector, as a labor regulation officer is given access to employers 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 respondents 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 PEOPLES
BROADCASTING SERVICES, INC. (DYMF- Bombo Radyo Cebu) since 1990 up to the
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
Given this 18th day of April 2000, Cebu City , Philippines.

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 petitioners claim of
lack of employer-employee relationshipa token paragraphand proceeded to a detailed
recitation of respondents 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 respondentfrom 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, respondents pieces of evidencethe identification card and the certification
issued by petitioners Greman Solante are not even determinative of an employer-employee
relationship. The certification, issued upon the request of respondent, specifically stated that
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. Furthermore, this is the property of Bombo Radyo
Philippines and must be surrendered upon separation from the company.


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.
[29] Respondents 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

In the instant case, save for respondents self-serving allegations and self-defeating
evidence, there is no substantial basis to warrant the Regional Directors finding that
respondent is an employee of petitioner. Interestingly, the Order of the Secretary of Labor
denying petitioners 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.

IV.[35] and the Deed of Assignment of Bank Deposits. 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. committed grievous error in ordering petitioner to answer for respondents claims. it is as if no cash or surety bond was posted when it filed its appeal. The Regional Director. therefore.[33] Had there been other proofs of employment.[37] Thus.Although substantial evidence is not a function of quantity but rather of quality. the bond requirement on . thus. it is crystal-clear that the DOLE Regional Director had no jurisdiction over respondents complaint. 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. these documents do not constitute the cash or surety bond contemplated by law. 128 (b) of the Labor Code. The Court does not agree. with the conclusion that no employer-employee relationship has ever existed between petitioner and respondent. the law does admit exceptions when warranted by the circumstances. In case said order involves a monetary award. the cash voucher.[36] According to the DOLE. The records show that petitioners appeal was denied because it had allegedly failed to post a cash or surety bond. Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. (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. in some cases. 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. the peculiar environmental circumstances of the instant case demand that something more should have been proffered. such as respondents inclusion in petitioners payroll. or a clear exercise of control. What it attached instead to its appeal was the Letter Agreement[34] executed by petitioner and its bank. the Court would have affirmed the finding of employer-employee relationship. Moreover. Thus. The provision on appeals from the DOLE Regional Offices to the DOLE Secretary is in the last paragraph of Art.

The Deed of Assignment reads: DEED OF ASSIGNMENT OF BANK DEPOSIT WITH SPECIAL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That I. SOLANTE in my capacity as Station Manager of DYMF Cebu City. PEOPLES BROADCASTING SERVICES.. (ii) the surrounding facts and circumstances constitute meritorious ground to reduce the bond. 010-8-00038-4 of PEOPLES BROADCASTING SERVICES.appeals involving monetary awards had been relaxed. 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.726. for and in consideration of the sum of PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100 ONLY (P203. Cebu Branch. It is understood that the said bank has the full control of Platinum Savings Deposit (PSD) No. INC. now pending appeal. INC.30) Phil. at the very least exhibited their willingness and/or good faith by posting a partial bond during the reglementary period.726. That Respondent-Appellant do hereby undertake to guarantee available and sufficient funds covered by Platinum Savings Deposit (PSD) No. Sanciangko St. R0700-2003-09-CI-09. a corporation duly authorized and existing under and by virtue of the laws of the Philippines. .[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. in the amount of PESOS: TWO HUNDRED THREE THOUSAND SEVEN HUNDRED TWENTY SIX PESOS & 30/100 ONLY (P203. or (iv) the appellants. (iii) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving controversies on the merits. GREMAN B. such as when (i) there was substantial compliance with the Rules.30) payable to Plaintiff-Appellee/Department of Labor and Employment Regional Office VII at Queen City Development Bank. Currency. Cebu City. as CASH BOND GUARANTEE for the monetary award in favor to the Plaintiff in the Labor Case docketed as LSED Case No.

in the City of Cebu. SOLANTE Station Manager As priorly mentioned. it is clear from the Deed of Assignment that the entire amount is under the full control of the bank. like a cash or surety bond. the Deed of Assignment was accompanied by a Letter Agreement between Queen City Development Bank and petitioner concerning Platinum Savings Deposit (PSD) No. IN WITNESS WHEREOF. any interest to be earned from the said Deposit will be for the account holder. but rather the entire award in the appealed Order.726.[40] The Deed of Assignment in the instant case. serves the same purpose. as cash bond for the monetary award in favor of respondent in LSED Case NO. For all intents and purposes. on the basis of the proper writ of execution. Second. The Court finds that the Deed of Assignment constitutes substantial compliance with the bond requirement. Third. the Deed of Assignment constitutes not just a partial amount. 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. against any occurrence that would defeat or diminish recovery by the aggrieved employees under the judgment if subsequently affirmed. Casting aside the technical imprecision and inaptness of words that mark the three documents. PEOPLES BROADCASTING SERVICES. and not of petitioner. Philippines.30 deposited at the said bank.30 covered by petitioners PSD Account No.726.FURTHER. during the period of appeal. Cebu City. By: (Signed) GREMAN B. Currency. a liberal reading reveals the documents petitioner did assign. therefore. and constituted clear manifestation of petitioners willingness to pay the judgment amount. the amount of P203. First. with the depositary bank authorized to remit the amount to.726. I have hereunto affixed my signature this 18th day if June. The purpose of an appeal bond is to ensure. the Court finds that the execution of the Deed of Assignment. 2004. INC. the Letter Agreement and the Cash Voucher were made in good faith. RO700-2003-CI-09. 010-8-00038-4. to be withdrawn by the same office after it had issued a writ of execution.[39] and a Cash Voucher issued by petitioner showing the amount of P203. and upon withdrawal by respondent and or the Department of Labor and Employment Regional Office VII. . and is in fact payable to the DOLE Regional Office.30) Phil. the Deed of Assignment in tandem with the Letter Agreement and Cash Voucher is as good as cash. 010-8-00038-4 with the Queen City Development Bank at Sanciangko St.

as where the orders of the trial court were issued in excess of or without jurisdiction. 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. Thus. board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction. 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.[47] . There was no indication that the said deposit was made specifically for the pending appeal. Another question of technicality was posed against the instant petition in the hope that it would not be given due course. or with grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal. ignoring and disregarding uncontroverted facts and familiar legal principles without any valid cause whatsoever.[44] This Court has even recognized that a recourse to certiorari is proper not only where there is a clear deprivation of petitioners fundamental right to due process. the amount deposited was measly compared to the total monetary award in the judgment. Nevertheless.19. nor any plain speedy.g. and adequate remedy at law. and that the certification was issued upon the depositors request for whatever legal purposes it may serve. Neither was the appellee in the case prevented from making withdrawals from the savings account. the Court is not convinced. that the availability of an appeal does not foreclose recourse to the extraordinary remedies.[46] and 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. speedy and sufficient. it is settled. as a general proposition. or there is need to promptly relieve the aggrieved party from the injurious effects of the acts of an inferior court or tribunal. as in the instant case. Respondent asserts that petitioner pursued the wrong mode of appeal and thus the instant petition must be dismissed.The Deed of Assignment must be distinguished from the type of bank certification submitted by appellants in Cordova v. such as certiorari and prohibition.[45] In one case. the court has authorized execution of the judgment. Once more.[43] Respondent may have a point in asserting that in this case a Rule 65 petition is a wrong mode of appeal. and certiorari jurisdiction is not to be equated with appellate jurisdiction.008. as indeed the writ of certiorari is an extraordinary remedy. where appeal is not adequate or equally beneficial. Keysas Boutique. e. A petition for certiorari is the proper remedy when any tribunal. The bank certification in Cordova merely stated that the employer maintains a depository account with a balance of P23. the Court ruled that the bank certification had not in any way ensured that the award would be paid should the appeal fail. Finally. but so also where other special circumstances warrant immediate and more direct action.[42] V..[41] wherein this Court found that such bank certification did not come close to the cash or surety bond required by law.

It must be remembered that a wide breadth of discretion is granted a court of justice in certiorari proceedings. despite the availability of plain. Court of Appeals. the issue is which is at the very heart of this case. in view of the importance of the issues raised therein.[48] The Court has not too infrequently given due course to a petition for certiorari. As a corollary. the exercise once more of our exclusive prerogative to suspend our own rules or to exempt a particular case from its operation as in x x Republic of the Philippines v. as we held in Republic v. when the broader interest of justice so requires. 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. Court of Appeals. without any discussion on the merits of the case. thus: x x The Rules have been drafted with the primary objective of enhancing fair trials and expediting justice. their suspension is justified.[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 NLRCs jurisdiction and the DOLEs prerogative but also the procedure when the case involves the fundamental challenge on the DOLEs prerogative based on lack of employer-employee relationship.[52] The peculiar circumstances of this case warrant.. the Court allowed a Rule 65 petition. (83 SCRA 453. et al.[50] The rules were also relaxed by the Court after considering the public interest involved in the case. It appears. 107 SCRA 504. DOLE denied petitioners appeal based solely on petitioners alleged failure to file a cash or surety bond.[53] The Regional Director fully relied on the self-serving allegations of respondent and misinterpreted the documents presented as evidence by respondent. In ruling and acting as it did. And the evidence clearly . speedy or adequate remedy. where valid and compelling considerations would warrant such a recourse.[51] when public welfare and the advancement of public policy dictates. this Court has previously ruled that the extraordinary writ of certiorari will lie if it is satisfactorily established that the tribunal had acted capriciously and whimsically in total disregard of evidence material to or even decisive of the controversy. 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. the DOLEs prerogative hinges on the existence of employer-employee relationship. 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. 524. To make matters worse. 478-480 [1978]). After all. even when the proper remedy would have been an appeal. when the writs issued are null and void. Had the appellate court truly reviewed the records of the case. if their applications and operation tend to subvert and defeat instead of promote and enhance it. or when the questioned order amounts to an oppressive exercise of judicial authority.[49] Moreover. As exhaustively discussed here. the Court finds that the Court of Appeals may be properly subjected to its certiorari jurisdiction. however.

00855 are REVERSED and SET ASIDE. The Decision dated 26 October 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in C. dated 24 May 2004 and 27 February 2004. SO ORDERED.R. The peremptory dismissal of the instant petition on a technicality would deprive the Court of the opportunity to resolve the novel controversy. respectively. The complaint against petitioner is DISMISSED. are ANNULLED. VII.A. the petition is GRANTED. DOLE Regional Office No. CEB-SP No.indicates private respondent has never been petitioners employee. WHEREFORE. the issue. G. and the Orders of the Director. . But the DOLE did not address. while the Court of Appeals glossed over. The Order of the then Acting Secretary of the Department of Labor and Employment dated 27 January 2005 denying petitioners appeal.