Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 71711 August 18, 1988

PNOC-EXPLORATION CORPORATION, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION & OSCAR SALVADOR, respondents.

Timbol and Associates for private respondent.

PARAS, J.:

This is a petition to annul the Decision dated May 30, 1985 of respondent National Labor Relations Commission (NLRC, for
short) sustaining an earlier decision of Labor Arbiter Felipe T. Garduque who assumed jurisdiction over the complaint filed by
herein private respondent Oscar Salvador against herein petitioner Philippine National Oil Company—Exploration. Corporation
(PNOC-EC for short), for illegal dismissal. The affirmed decision of the Labor Arbiter decreed —

IN VIEW OF THE FOREGOING FACTS, respondent is hereby ordered to reinstate complainant with full backwages from the time of
his termination up to actual reinstatement without loss of seniority rights and to pay complainant the sum of SIXTY SEVEN PESOS
& 00/000 (P67.00) as differential cost of living allowance and TWO HUNDRED PESOS (P200.00) as payment of five days incentive
leave pay from May 1976 to 1977 and May 1979 within ten (10) days from receipt hereof. (Rollo, p. 4)

Petitioner filed the instant petition with Us seeking the resolution of the following issues —

1. Whether or not matters of employment affecting the PNOC-EC a government owned and controlled corporation are within
the jurisdiction of the Ministry of Labor and Employment (now Department of Labor and Employment).

2. Assuming the affirmative, whether or not the Ministry is justified in ordering the reinstatement of private respondent and
payment of his full backwages without loss of seniority rights.

Required to comment, the Solicitor General prayed that the petition be given due course since the petitioner is governed by
the Civil Service Law and that the termination of private respondent's employment upon project completion is in accord with
law.

The petition was thus given due course in the Resolution dated October 20, 1986.

Records show that on April 14, 1976, the PNOC-EC was organized. Its primary purpose was to "prospect, explore, exploit,
extract, produce, purchase or otherwise dispose of, all kinds of petroleum and petroleum products and other volatile
substances." (Articles of Incorporation, Annex E, p. 40 Record).

On May 28, 1976, petitioner employed Oscar Salvador, herein private respondent as a driver mechanic for its project in the
Cagayan Valley. The employment contract duly signed by private respondent clearly specified that his employment with
petitioner was coterminous with the project completion, without prejudice to the latter's right to shorten or extend the term of
employment depending on the requirements of the project.

On June 30, 1976, the shares of stock of PNOC-EC were conveyed and sold to the Philippine National Oil Company (PNOC)
a government owned and controlled corporation created under Pres. Decree No. 334. (Deed of Transfer Annex 'G' p. 61
Record.)

Consequently, the PNOC-EC became one of the corporate subsidiaries of PNOC, tasked to generate or increase the
availability of energy resources. It commenced operation by undertaking oil exploration and exploitation projects in various
parts of the country.

On January 15, 1977, upon completion of the project, private respondent's services were terminated.

On Oct. 1, 1978, private respondent was again hired as driver-mechanic, this time in petitioner's Gravity Project in Samar,
under the same terms and conditions as the first contract.
Hence, when the second project was completed in May 1979, petitioner's employment was likewise terminated and was never
renewed in the subsequent projects of the company.

Believing that he had become a regular employee and that his termination was illegal, private respondent filed a complaint
against petitioner for illegal dismissal, backwages and allowances before the Labor Arbiter.

The decision of the Labor Arbiter in favor of private respondent which was affirmed by respondent NLRC is the subject of this
petition which We find to be meritorious.

As correctly pointed out by the Solicitor General, the issue of jurisdiction has been resolved in a string of cases starting with
the National Housing Authority vs. Juco, (134 SCRA 172) followed by Metropolitan Waterworks and Sewerage System vs.
Hernandez (143 SCRA 602) and the comparatively recent case of Quimpo vs. Sandiganbayan (GR No. 72553 Dec. 2, 1986)
in which this Court squarely ruled that PNOC subsidiaries, whether or not originally created as government owned or
controlled corporations are governed by the Civil Service Law.

Petitioner PNOC-EC being admittedly a subsidiary affiliate of PNOC is therefore unmistakably within the scope of the Civil
Service Law and beyond the jurisdiction of the Ministry of Labor or any of its agencies. Having been rendered without
jurisdiction, the assailed decision of the Labor Arbiter which was affirmed by respondent NLRC is null and void.

Be this as it may, the evidence on record shows that private respondent was not illegally dismissed. He was employed only for
a specific project. His employment, therefore, legally ended upon completion of the project in May, 1979. In this regard, Article
281 of the New Labor Code provides —

Art. 281. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of
the oral agreements of the parties, an employment shall be deemed to be regulars where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the
employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is
for the duration of the season. ...

PREMISES CONSIDERED, the petition is GRANTED. The assailed decision dated May 20, 1985 of respondent NLRC is SET
ASIDE and the complaint filed by private respondent for illegal dismissal is DISMISSED for lack of merit.

SO ORDERED.

Melencio-Herrera, (Chairperson), Padilla and Sarmiento, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 97092 July 27, 1992

PEPSI-COLA SALES AND ADVERTISING UNION, petitioner,

vs.
HON. SECRETARY OF LABOR and ROBERTO ALISASIS, respondents.

 NARVASA, C.J.:

In its Decision in G.R. No. 80587 (Wenphil Corporation v. NLRC), promulgated on February 8, 1989, 1 this Court 2 laid down
the doctrine governing an illegal dismissal case where the employee satisfactorily establishes that his employment was
terminated without due process — i.e., without written notice to him of the charges against him and without according him
opportunity to defend himself personally or through a representative — but the employer nevertheless proves the existence of
just cause for the employee's dismissal. The controlling principle in such a case is that since the employee's dismissal was for
just cause, he is entitled neither to reinstatement or back wages nor separation pay or salaries for the unexpired portion of his
contract, being entitled only to the salaries earned up to the last day of employment; at the same time, however, as a general
proposition, the employer is obliged, on account of its failure to comply with the requirements of due process in terminating the
services of the employee, to pay damages to the latter fixed at P1,000.00, a sum deemed adequate for the purpose.

This doctrine, which has since been reaffirmed by this Court, 3 applies in the case at bar, in resolution of the issue of whether
or not the private respondent, Roberto Alisasis, may be considered to have been dismissed for just cause within the meaning
of the charter papers organizing and governing a mutual aid program of which he was a participant.

From 1964 until sometime about 1985, Alisasis was an employee of the Pepsi-Cola Bottling Co., Inc. and later, of the Pepsi-
Cola Products (Philippines) Inc., after the latter had bought out the former. 4 He was also a member of the labor organization
of all regular route and truck salesmen and truck helpers of the company — the Pepsi Cola Sales & Advertising Union (PSAU)
— from June 1, 1965 up to the termination of his employment in 1985. 5 As a member of the PSAU, he was also a participant
in the "Mutual Aid Plan" set up by said union sometime in 1980. During the entire period of his employment, there were
regularly deducted from his wages the amounts corresponding to union dues as well as contributions to the fund of the Mutual
Aid Plan. 6

On May 7, 1986, Alisasis filed with the NLRC Arbitration Branch, Capital Region, Manila, a complaint for illegal dismissal
against Pepsi-Cola, Inc. 7 This resulted in a judgment by the Labor Arbiter dated January 25, 1988 declaring him to have been
illegally dismissed and ordering the employer to reinstate him "to his former position without loss of seniority rights and with full
backwages for one (1) year from the time he was not allowed to report for
work . . ." 8 The judgment was subsequently affirmed with modification. by the Fourth Division of the NLRC dated December
29, 1989, 9 disposing of the appeal as follows: 10

In view therefore of the foregoing considerations, the decision appealed from is hereby modified in the sense that the order for
respondent to reinstate complainant is hereby set aside. The rest of the decision shall stand.

The deletion of the relief of reinstatement was justified by the NLRC in the following manner: 11

Certainly, with the actuations of complainant, respondent had ample reason or enough basis then to lose trust and confidence in
him. Complainant, being a salesman, should be considered to have occupied a position of responsibility so that, if respondent had
lost trust and confidence in him, the former could validly and legally terminate the services of the latter (Lamaan Trading, Inc. vs.
Leodegario, Jr., G.R. 73245, September 30, 1986).

However, although there was valid and lawful cause in the dismissal of complainant by respondent, the manner in which it was
effected was not in accordance with law. Complainant was not given written notice by respondent but was only verbally advised,
thru its Field Sales Manager, sometime in May 1985 that he should not report for work anymore, obviously, because there was a
charge against him. And this is what makes the dismissal of complainant arbitrary and illegal for failure to comply with the notice
requirement under Batas Pambansa Blg. 130 on termination of employees.

Ordinarily, when the dismissal of an employee is declared unjustified or illegal, he is entitled to reinstatement and backwages (Art.
279 of the Labor Code). However, in the instant case, considering that respondent had already lost trust and confidence in
complainant which is founded on a reasonable ground, as discussed earlier, there is no point in requiring respondent to reinstate
complainant to his former position. To do so would be tantamount to compelling the management to employ someone whom it can
no longer trust, which is oppressive.
It appears that both Alisasis and Pepsi-Cola, Inc. accepted the NLRC's verdict and complied therewith; that Pepsi-Cola gave
Alisasis back wages for one (1) year; and that, Alisasis issued the corresponding quitclaim and considered himself separated
from his employment.

Alisasis thereafter asked his labor organization, PSAU, to pay

him monetary benefits in accordance with Section 3, Article X of the "Amended By-Laws of the Mutual Aid Plan of the Pepsi-
Cola Sales & Advertising Union (U.O.E.F.), 12 in an amount equal to "One (P1.00) Peso per year of service multiplied by the
number of member(s) . . ." 13 PSAU demurred, invoking in its turn Section 1, Article XII of the same amended by-laws,
declaring as disqualified from any entitlement to the PLAN and . . (from any) Benefit or return of contributions . . under any
circumstances," inter alia, "(a)ny member dismissed for cause." 14

Alisasis thereupon filed a complaint against the union, PSAU, with the Med Arbitration Unit, National Capital Region,
Department of Labor and Employment, to compel the latter to pay him his claimed benefits. 15 The principal defenses alleged
by PSAU were that Alisasis was disqualified to claim any benefits under the Mutual Aid Plan, supra; and that the Med-Arbiter
had no original jurisdiction over the case since Alisasis' claim for financial assistance was not among the cases cognizable by
Med-Arbiters under the law "such as representation cases, internal union and inter-union disputes . . (or) a violation of the
union's constitution and by-laws and the rights and conditions of membership in a labor organization." 16 After due
proceedings, the Med-Arbiter promulgated an Order on April 16, 1990, ruling that he had jurisdiction and "ordering respondent
. . (PSAU) to pay complainant Roberto Alisasis . . his claim for financial assistance under the Mutual Aid Fund of the union."
PSAU appealed to the Secretary of Labor and Employment who, by Resolution dated July 25, 1990, denied the appeal but
reduced the Med-Arbiter's award from P18,669.00 to P17,886.00. 17 Nullification of the Med-Arbiter's Order of April 16, 1990
and the respondent Secretary's Resolution of July 25, 1990 is the prayer sought by the petitioner in the special civil action of
certiorari at bar.

Resolving first the issue of whether or not the case at bar is within the original jurisdiction of the Med-Arbiter of the Bureau of
Labor Relations, the Court holds that it is.

The jurisdiction of the Bureau of Labor Relations and its Divisions is set forth in the first paragraph of Article 226 of the Labor
Code, as amended, viz.:

Art. 226. Bureau of Labor Relations. — The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of
the Department of Labor shall have original and exclusive authority to act, at their own initiative or upon request of either or both
parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor
management relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration.

xxx xxx xxx

It is evident that the case at bar does not concern a dispute, grievance or problem "arising from or affecting labor-
management relations." So, if it is to be deemed as coming within the Med-Arbiter's jurisdiction, it will have to be as either an
"intra-union" or "inter-union" conflict.

No definition is given by law of these precise terms, "intra-union and inter-union conflicts." It is known, however, that "intra-"
and "inter-" are both combining forms, prefixes — the first, "intra-," meaning "within, inside of [intramural, intravenous];" and
the other, "inter-, denoting "1. between or among: the second element is singular in form [ interstate] 2. with or on each other
(or one another), together, mutual, reciprocal, mutually, or reciprocally [interact]." 18 An intra-union conflict would therefore refer
to a conflict within or inside a labor union conflict would therefore refer to a conflict within or inside a labor union, and an inter-
union controversy or dispute, one occurring or carried on between or among unions. In this sense, the controversy between
Alisasis and his union, PSAU — respecting the former's rights under the latter's "Mutual Aid Plan" — would be an intra-union
conflict under Article 226 of the Labor Code and hence, within the exclusive, original jurisdiction of the Med-Arbiter of the
Bureau of Labor Relations whose decision, it may additionally be mentioned, is appealable to the Secretary of Labor.

Certainly, said controversy is not one of those within the jurisdiction of the Labor Arbiters in accordance with Article 217 of the
Code, it not being an unfair labor practice case, or a termination dispute, or one involving wages, rates of pay, hours of work
and other terms and conditions of employment (which is "accompanied with a claim for reinstatement"), or one for damages
arising from the employer-employee relations, or one for a violation of Article 264 of the Code, or any other claim arising from
employer-employee relations, or from the interpretation or implementation of a collective bargaining agreement or of company
personnel policies.

The second issue relates to the character of Alisasis' dismissal from employment. The Court holds that Alisasis had indeed
been "dismissed for cause." His employer had established this factual proposition by competent evidence to the satisfaction of
both the Labor Arbiter and the National Labor Relations Commission. In the Latter's view, and in its own words, "Certainly,
with the actuations of complainant, . . (Alisasis' employer) had ample reason or enough basis to lose trust and confidence in
him . . . considering that (said employer) had already lost trust and confidence in complainant which is founded on a
reasonable ground, as discussed earlier, (and therefore) there is no point in requiring respondent to reinstate complainant to
his former position . . (as to) do so would be tantamount to compelling the management to employ someone whom it can no
longer trust, which is oppressive."

It was merely "the manner in which such a dismissal from employment was effected . . (that was deemed as) not in
accordance with law, (there having been) failure to comply with the notice requirement under Batas Pambansa Blg. 130 on
termination of employees." That imperfection is, however, a circumstance quite distinct from the existence of what the NLRC
has clearly and expressly conceded to be a "valid and lawful cause in the dismissal of complainant by respondent." And this is
precisely the reason why, as already pointed out, the NLRC declined to accord to Alisasis all the remedies or reliefs usually
attendant upon an illegal termination of employment — e.g., reinstatement, award of damages — although requiring payment
by the employer of the sum of P1,000.00 simply on account of its failure "to comply with the notice requirement under Batas
Pambansa Blg. 130 on termination of employees." The situation is on all fours with that in the Wenphil Corporation Case, 19
cited in this opinion's opening paragraph, in which the following pronouncements, among others, were made:

Thus in the present case, where the private respondent, who appears to be of violent temper, caused trouble during office hours and even
defied his superiors as they tried to pacify him, should not be rewarded with re-employment and back wages . It may encourage him to do
even worse and will render a mockery of the rules of discipline that employees are required to observe. Under the circumstances the
dismissal of the private respondent for just cause should be maintained . He has no right to return to his former employer.

However, the petitioner (employer) must nevertheless be held to account for failure to extend to private respondent his right to an
investigation before causing his dismissal. . . Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an
investigation as required by law before dismissing . . (respondent) from employment. Considering the circumstances of this case petitioner
(employer) must indemnify the private respondent (employee) the amount of P1,000 .00. The measure of this award depends on the facts of
each case and the gravity of the omission committed by the employer.

The petitioner union (PSAU) was therefore quite justified in considering Alisasis as a "member dismissed for cause," and
hence disqualified under its amended by-laws to claim any "Benefit or return of contributions . . under any circumstances, . . ."
The ruling to the contrary of the Med-Arbiter and the Secretary of Labor and Employment must thus be set aside as tainted
with grave abuse of discretion.

WHEREFORE, the petition is granted and the writ of certiorari prayed for issued, NULLIFYING and SETTING ASIDE the
challenged Order of the Med-Arbiter dated April 16, 1990 and the Resolution of the respondent Secretary of Labor and
Employment dated July 25, 1990, and DIRECTING THE DISMISSAL of Alisasis' complaint in NLRC Case No. NCR-Od-M-90-
01-037, without pronouncement as to costs.

SO ORDERED.

Padilla, Regalado and Nocon, JJ., concur.

Paras, J., Retired as of July 4, 1992.

 Footnotes
1 170 SCRA 69.
2 First Division, per Gancayco, J ., who has since retired.
3 SEE Seahorse Maritime Corp. v. NLRC, 173 SCRA 390 (1980); Kwikway Engineering Works v. NLRC, 195 SCRA 526 (1991).
4 Rollo, pp. 37-38.
5 Id., pp. 25, 32-33.
6 Id., pp. 25, 55.
7 Docketed as NLRC NCR Case No. 5-1794-86.
8 Rollo, p. 37.
9 Id., pp. 37-44.
10 Emphasis supplied.
11 Rollo, pp. 42-43 — Emphasis supplied.
12 Id., pp. 45-54.
13 Id., p. 51.
14 Id., p. 52.
15 The complaint was filed on January 17, 1990, and was docketed as Case No. NCR-Od-M-90-01-037.
16 Rollo, p. 6.
17 Id., p. 26, Annex D, petition.
18 Webster's New World Dictionary of the American Language, Second College Edition. Webster's Third New International Dictionary, 1968
ed., describes "inter-" as a "prefix . . . (signifying) 1: between, among, in the midst [ intermediate] [interspace] 2: mutual, reciprocal [intermarry]
[intermesh] [interrelation] [interwine] 3: between or among the parts of [ intercostal] [interdental] 4: carried on between [intercollegiate]
[intercommunication] [international] 5: occurring between: intervening [interglacial] [intertidal] 6: shared by or derived from two or more
[interdepartmental] [interfaith] 7: between the limits of: within [ intertropical] — "intra" as another prefex meaning 1a: within — esp. in adjectives
formed from adjectives [intraglacial] [intravaginal] [intracellular] [intra-European] [intracosmical] . . . ."
19 170 SCRA 69, 76; emphasis and parenthetical insertions supplied. The doctrine has since been applied to other cases: SEE footnote 3,
supra.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-25933 August 30, l982

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, plaintiff-appellant,

vs.
FREE TELEPHONE WORKERS UNION, EUSEBIO T. QUINIO, PAULINO DE JESUS, ASUNCION VILLANUEVA, JOSEFA
STA. ROSA, ANGELINA REYES, DOLORES MONTALES, JOSE DE LA TORRE, EMILIO CABRERA, FRANCISCO
AQUINO, RESTITUTO PARCON, GREGORIO RUFINO, GRACIANO PAGARIGAN, LEGARIO DELOS REYES, MACARIO
MACARAEG, RAMON BAVIERA, ALFREDO ALMERO, CIRIACO PEDANO, CONSTANCIO TALUSAN, MANUEL SANCHEZ,
ILDEFONSO ABASOLO, CONSTANTINO PASTRANA, BENITO DELFIN, JESUS LIBRES, MARSHAL DIZON, CESAR
REBUENO and PAULINO DE JESUS, defendants-appellees.

Siquion Reyna, Montecillo and Ongsiako Law Offices for plaintiff-appellant.

J.C. Espinas, R.O. Luz and Associates for defendants-appellees.

&

MAKASIAR, J.:1äwphï1.ñët

Appeal from the February 18, 1966 order of the Court of First Instance of Manila dismissing Civil Case No. 63688 on the
ground that the same had been prematurely filed.

This is one of several cases that reached this Court in connection with the 1964 labor dispute between the Philippine Long
Distance Telephone Company and the Free Telephone workers Union.

In a complaint filed on December 20, 1965, in the Court of First Instance of Manila, against the Free Telephone Workers
Union and 26 other persons named therein, plaintiff Philippine Long Distance Telephone Company alleged that on November
3, 1964, the President of the Philippines certified to the Court of Industrial Relations the labor dispute between the Philippine
Long Distance Telephone Company and Free Telephone Workers Union over the terms and conditions of employment of the
company's rank-and-file employees and the labor dispute was docketed as CIR Case No. 51-IPA, entitled " Free Telephone
Workers' Union versus Philippine Long Distance Telephone Company" and on November 9, 1964, the Court of Industrial
Relations rendered a partial decision, directing, inter alia: "... It shall be understood that during the pendencv of the case, the
Union shall not strike or walk out of their employment; and the Company shall not lock out its employees as public interest
demands, considering that the Court, in its opinion, cannot promptly settle or decide the dispute (emphasis supplied)"; that on
May 17,1965, in spite of the above-quoted directive of the Court of Industrial Relations and in complete disregard of the fact
that CIR Case No. 51-IPA was and still is pending before said Court, defendant Union through its officers, filed with the
Department of Labor a notice of strike against the Philippine Long Distance Telephone Company; that in view of the evident
intention of defendant union and its officers to disregard the aforestated no strike directive of the Court of Industrial Relations,
the Philippine Long Distance Telephone Company, on June 2, 1965, filed with the Court of Industrial Relations a petition for
the issuance of a writ of preliminary injunction, praying that the intended strike of defendant union be restrained, which petition
was docketed in the Court of Industrial Relations as CIR Case No. 51-IPA (2); that on July 6, 1965, the Court of I industrial
Relations issued an order restraining defendant anion from going on strike pending the resolution by the Court of a motion to
dismiss filed by defendant union in CIR Case No. 51-IPA (2); that in contemptuous disregard of this second restraining order
of July 6, 1965 of the Court of Industrial Relations, the individual defendants herein, as officers of defendant union, held a
meeting on July 6, 1965, after they had received a copy of the said July 6, 1965 order, and in that meeting decided to stage a
strike, as in fact they did, on July 7, 1965; that the strike declared on July 7, 1965 continued until August 11, 1965 even as the
Court of Industrial Relations on July 16, 1965, had issued in CIR Case No. 51-IPA (2) another order requiring the striking
employees to call off the strike and to lift their picket lines and further directing the striking employees "... to return to work
within three (3) days from receipt of a copy of this order of [petitioner]; otherwise if they or any of them fail to do so,
considering that as has been found by the President of the Philippines the business of respondent is coupled with national
interest, the management of Philippine Long Distance Telephone Company is hereby authorized to replace any and an oil
them in virtue of Section 19 of C.A. 103, as amended, provided, however, that employees who shall have been replaced may
be reinstated by the Court after due hearing and after establishing good and valid grounds for their failure to return to work as
directed ...; that in wanton violation of the above-quoted order of the Court of Industrial Relations, defendants resumed the
strike on August 13, 1965 and continued the same until August 24, 1965; that apart from declaring the strike on July 7, 1965
and resuming it on August 13, 1965, defendants compounded their defiance of the no-strike and return-to-work directives of
the Court of Industrial Relations by inducing and instigating others through misleading propaganda and intensive campaigns to
commit the same act of open defiance of the Court; and that as a result of an these wrongful and unlawful acts of defendants,
the Philippine Long Distance Telephone Company was adversely affected, causing it to suffer for the period from July 7 to
August 24, 1965, an actual damage of not less than P599,603.00; that the aforesaid damage being the result of the wrongful
and unlawful acts and conduct of the defendants, said defendants are liable to the Philippine Long Distance Telephone
Company for the indemnity of such damage; that since defendants acted in an oppressive and unlawful manner, exemplary
damage should be imposed upon them by way of example or correction for the public good and in favor of the Philippine Long
Distance Telephone Company, the amount of P30,000.00; and that for the institution of this act, Philippine Long Distance
Telephone Company obtained the services of counsel to whom the plaintiff is bound to pay the sum of P10,000.00 as
attorney's fees (pp. 6-17 ROA; p. 9, rec.).

Thereafter, in a motion dated January 5, 1966, defendants prayed for the dismissal of the complaint on the ground that (1) the
Court of First Instance has no jurisdiction over the subject matter of the complaint because the same is intertwined with a labor
dispute now pending before the Court of Industrial Relations; (2) that even assuming that the Court of First Instance has
jurisdiction, the complaint stated no cause of action because the law does not allow recovery of damages arising from a strike;
(3) that on the same jurisdictional assumption, the claim for damages arising from the strike has been extinguished because
the plaintiff has already admitted to work the rank-and-file employees who themselves voted for the strike; and (4) that the
complaint has been prematurely filed because the question of the strike's legality is still pending before the Court of Industrial
Relations and that even the jurisdiction of the Court of Industrial Relations in assuming compulsory powers over the labor
dispute in CIR Case No. 51-IPA (2) is still pending review before the Supreme Court in G.R. No. L-24827 (pp. 18-25, ROA, p.
9, rec.).

On January 12, 1966, the Philippine Long Distance Telephone Company filed its opposition to defendants' motion to dismiss,
maintaining that the lower court has jurisdiction over the subject matter of the complaint, that defendants are liable for the
damages prayed for in the complaint; that the temporary reinstatement of strikers did not constitute waiver thereof; and that
the filing of the said complaint was not premature (pp. 26-35, ROA, p. 9, rec.).

On January 15, 1966, the lower court, through Hon. Judge Francisco Geronimo, issued an order denying defendants' motion
to dismiss and holding that it has jurisdiction over the case (p. 36, ROA; p. 9, rec.).

Whereupon, under date of January 22, 1966, defendants filed a motion for reconsideration on the sole ground that even
assuming arguendo that the Court of First Instance has jurisdiction over the case, the cause of action has not yet accrued
because the question of strike legality upon which depends the right of the Philippine Long Distance Telephone Company to
claim damages has yet to be decided as the same is still pending determination by the Court of Industrial Relations (pp. 38-41,
ROA; p. 9, rec.).

On February 4, 1966, the Philippine Long Distance Telephone Company filed its opposition to defendants'. motion for
reconsideration, contending that the question of the strike's illegality has nothing to do whatsoever with the complaint for
damages (pp. 46-48, ROA; p. 9, rec.).

On February 5, 1966, the lower court entered an order requiring the parties, in view of the importance of the question raised,
to submit simultaneous memoranda. Accordingly, the Philippine Long Distance Telephone Company filed its memorandum on
February 17, 1966 (pp. 77-155, ROA; p. 9, rec.), while defendants filed theirs earlier on February 8, 1966 (pp. 49-76, ROA; p.
9, rec.)

On February 18, 1966, the lower court issued its resolution granting defendants' motion for reconsideration and dismissing,
without prejudice, plaintiff's complaint, on the ground that the action has been prematurely filed, thus: 1äwphï1.ñët

... In the order of this Court dated January 15, 1966, the motion to dismiss filed by the defendants was denied on the ground that the
court holds that it has jurisdiction over the cause. In the motion for reconsideration filed by the defendants, the ground alleged is
amplified by alleging further that even conceding that the court has jurisdiction over this case, the cause of action which would give
rise to damages has not yet accrued.

A reading of the complaint filed by the plaintiff in this case shows that it is claiming damages as a result of the alleged wrongful and
unlawful acts of the defendants in declaring a strike on July 7, 1965, which was continued up to August 24, 1965, in defiance of the
Orders of the Court of Industrial Relations, enjoining the defendants from declaring a strike. It appears, however, that the legality of
the Orders of the Court of Industrial Relations enjoining the defendants from declaring a strike is at present an issue squarely raised
before the Supreme Court and has not yet been decided. It would seem, therefore, that the basis of the action of the plaintiff rests
upon the proposition that the strikes declared by the defendants in violation of the Orders of the Court of Industrial Relations were
unlawful. On the other hand, plaintiff contends in their memorandum that the declaration of the legality or illegality of the strike by the
Court of Industrial Relations is not a condition precedent to the filing of an action for damages arising from a strike. Both parties
have submitted well-reasoned memoranda, replete with authorities sustaining both sides of the question.

After a careful consideration of the issues raised, the Court finds that in reality. the action filed by the plaintiff depends upon the
ultimate resolution of whether or not the strike declared by the defendants on July 7, 1965, up to August 24, 1965, in violation of the
Orders of the Court of Industrial Relations were unlawful. Should the Orders of the Court of Industrial Relations enjoining the
defendants from declaring a strike be found by the Supreme Court to have not been validly issued, and, therefore, the strikes
declared by the defendants were lawful, it may be asked: Upon what basis can the action of the plaintiff for damages as a result of
the lawful strike declared by the defendants be sustained? To uphold the action of the plaintiff in this instant case, this court
necessarily has to determine whether the strikes declared by the defendants were legal or not. Since this matter is now pending
 before the Supreme Court and the Court of Industrial Relations, this Court is of the opinion, and so holds, that until that issue is
definitely settled there seems to be no sufficient legal basis at least for the present for the action for damages allegedly sustained by
the plaintiff as a consequence of the strikes declared by the defendants.

... (pp. 101-103, rec.).

Hence, this appeal of plaintiff Philippine Long Distance Telephone Company, hereinafter referred to as appellant, from the
aforesaid order of dismissal of its complaint for damages against Free Telephone Workers Union and the other defendants
named therein, hereinafter referred to as appellees.

Notice of appeal and appeal bond were filed by appellant on March 15, 1966 while the Record on Appeal was filed on March
16, 1966 which was approved by the trial court in its order dated March, 1966.

On May 30, 1966, appellant filed with this Court its printed Record on Appeal (p. 9, rec.).

Appellant thereafter filed its brief (p. 15, rec.) on July 28, 1966; while appellees filed theirs (p. 16, rec.) on August 7, 1966. A
reply (p. 34, rec.) was filed by appellant on September 22, 1966.

Accordingly, the appeal was submitted for decision.

In its brief, appellant Philippine Long Distance Telephone Company insists that the lower court erred in dismissing its
complaint on the ground that the same had been prematurely filed and argued that the declaration of strike illegality by the
Court of Industrial Relations is not a condition precedent to the filing of an action with the Court of First Instance for damages
arising from a strike; that the lower court's dismissal of its complaint for damages is for a ground not specified in the New
Rules of Court; and that even assuming that the labor cases pending in the Court of Industrial Relations and the Supreme
Court raise a prejudicial question, the complaint in question should not have been dismissed, but the hearing only suspended.

On the other hand, appellees in their brief maintain the correctness of the dismissal order and advance the counter arguments
that (a) unlike American law, Philippine Labor Management Relations Statutes do not allow the recovery of damages even in
illegal strikes, since R.A. 875, the Industrial Peace Act, limits liability in the case of an illegal strike to dismissal of the
employees participating therein and deprives their union of all the rights and privileges given by the law; and even in American
law, damages are limited to jurisdictional strikes and secondary boycotts; (b) assuming arguendo that damages are
recoverable, Philippine Long Distance Telephone Company, the plaintiff- appellant, has admitted voluntarily back to work most
of the strikers and is therefore estopped from claiming damages from the defendant union because of such strike; (c) even
assuming that damages are recoverable, there exists no cause of action because the question of strike legality is still to be
determined; and that in the event that the orders of the Court of Industrial Relations are sustained, the plaintiff- appellant has
not lost the right to prosecute for damages, assuming that damages are recoverable.

Appellant in its reply brief in refutation of the above counter arguments of appellees contended that (a) contrary to defendants'
theory, Philippine law allows recovery of damages caused by the wrongful declaration and prosecution of a strike; and (b) that
contrary to defendants' contention, plaintiff did not voluntarily admit the strikers back to work; hence, it cannot estopped from
claiming damages from defendants on account of their illegal and tortuous conduct.

A perusal of the records of this case however constrain US to resolve this appeal on the issue of the jurisdiction of the lower
court, Court of First Instance, over the subject complaint for damages.

1. It must be recalled that the Court of First Instance of Manila, Branch XII initially refused to dismiss the complaint for
damages of appellant as it was its view that it has jurisdiction over the same. It was only when appellees filed their motion for
reconsideration on the ground that even assuming arguendo that the Court of First Instance has jurisdiction over the case, the
cause of action has not yet accrued because the question of strike legality upon which depends the right of Philippine Long
Distance Telephone Company to claim damages has yet to be decided as the same is still pending determination by the Court
of Industrial Relations, that the above-mentioned Court of First Instance dismissed the complaint for damages — on the
ground that it was prematurely filed.

2. WE rule that the regular courts, as herein Court of First Instance of Manila, Branch XII, have no jurisdiction over complaints
for damages of this nature.

Jurisprudence 'under R.A. 875, as amended, otherwise known as the Industrial Peace Act (which is now completely
superseded by the New Labor Code) is settled that jurisdiction over this kind of complaint for damages is exclusively lodged
with the defunct Court of Industrial Relations and that the assumption and exercise of jurisdiction by the regular courts, Courts
of First Instance, over the same, is a nullity. WE have declared that "... to rule that such demand for damages is to be passed
upon by the regular courts of justice, instead of leaving the matter to the Court of Industrial Relations, 'would be to sanction
split jurisdiction, which is prejudicial to the orderly administration of justice' "(Holganza vs. Apostol, 76 SCRA 191 [1977]).
Then Associate Justice, now incumbent Chief Justice, Enrique M. Fernando, in the aforesaid Holganza case collating the
jurisprudence on the matter, stated . . . 1äwphï1.ñët

The jurisdictional issue, as noted, must be decided in favor of petitioners. There is this appraisal of the nature of the action instituted
against them by private respondent, the Social Security System: "Clearly, the complaint for damages is deeply rooted from the labor
dispute certified by the President of the Philippines and from which resulted a collective bargaining agreement that was adopted as
the court award. This award, in turn, branched out to disputes that led to the strike. On the basis of this strike, the SSS petitioned the
CIR to declare the said strike illegal, to dismiss the striking employees, and to declare the officers in contempt of court. And the
claim for damages is the result of the strike. The SSS alleges that: "19. As a result of the Defendants" strike and picketing from
September 3, 1968 to September 18, 1969, staged as aforesaid, in violation of the CIR award of August 5, 1966, as well as the
orders of the CIR of August 29, 1966 and September 3 and September 5, 1968, plaintiff suffered actual and consequential damages
..." (par. 19, Complaint, Annex 'A'; emphasis supplied). Likewise, in paragraphs 20 and 21 of the complaint the SSS seeks
exemplary and moral damages in view of the defiance of the CIR orders and also because of the strike and picketing as thus
alleged. In fine the alleged damages, the strike and picketing, the alluded CIR orders, the petition to declare the said strike illegal, to
dismiss the striking employees, and to declare the officers in contempt of court - are so intertwined and inseparable from each other.
Except for the aspect of damages, all these incidents are embraced in CIR Case No. 46-IPA and which are still pending' ( Ibid,
Reasons and Authorities in Support of These Issues, 7-8). As far back as Associate Labor Union v. Gomez, L-25999, February 9,
1967, 19 SCRA 304, the exclusive jurisdiction of the Court of Industrial Relations in disputes of these character was upheld. "To
hold otherwise," as succinctly stated by the ponente, Justice Sanchez, 'is to sanction split jurisdiction - which is obnoxious to the
orderly administration of justice" ( Ibid, 309).ït¢@lFº Then in Progressive Labor Association v. Atlas Consolidated Mining and
Development Corporation, L-27585, May 29, 1970, 33 SCRA 349 decided three years later, Justice J.B.L. Reyes, speaking for the
Court, stressed that to rule that such demand for damages is to be passed upon by the regular courts of justice, instead of leaving
the matter to the Court of Industrial Relations, "would be to sanction split jurisdiction, which is prejudicial to the orderly administration
of justice" (Ibid, 355). Thereafter, this Court, in the cases of Leoquenio v. Canada Dry Bottling Co., L- 28621, February 22, 1971, 37
SCRA 535 and Associated Labor Union v. Cruz, L-28978, September 22, 1971, 41 SCRA 12, with the opinions coming from the
same distinguished jurist, adhered to such a doctrine, the latest case in point, as noted at the outset, is the Goodrich Employees
Association decision. The lack of jurisdiction of respondent Judge is thus manifest (pp. 192-194).

And in Maria Cristina Fertilizer Plant Employees Association v. Tandayag, L-29217, May 11, 1978, 83 SCRA 56, 63, which in
part also involved the question of whether the Court of First Instance can award damages arising from an alleged unfair labor
practice, the Court's Second Division, through Justice Ramon C. Aquino, relying on the aforesaid case of Holganza and the
cases therein cited, ruled in the negative and declared that the jurisdiction properly belonged to the Court of Industrial
Relations; and consequently, reached the "... unavoidable conclusion that all the proceedings in Civil Case No. 1262 (of the
Court of First Instance of Lanao del Norte) are void for lack of jurisdiction" and "(T)hat case should be dismissed" (pp. 63- 64).

3. It is clear from the records that the subject complaint for damages is intertwined with or deeply rooted from the 1964
certified labor dispute between appellant and appellees. As can be gleaned from the aforesaid complaint, appellant is claiming
against appellees damages it allegedly sustained as a consequence of the strikes declared by the appellees. It is therefore
obvious in the light of the established jurisprudence as aforestated that the lower court, Court of First Instance of Manila,
Branch XII, did not have jurisdiction over the aforesaid complaint for damages; hence, all the proceedings taken therein are
void for lack of jurisdiction.

4. The failure of the appellees to invoke anew the aforementioned solid ground of want of jurisdiction of the lower court in this
appeal should not prevent this Tribunal to Lake up that issue as the lack of jurisdiction of the lower court is apparent upon the
face of the record and it is fundamental that a court of justice could only validly act upon a cause of action or subject matter of
a case over which it has jurisdiction: and said jurisdiction is one conferred only by law; and cannot be acquired through, or
waived by, any act or omission of the parties (Lagman v. CA, 44 SCRA 234 [1972]); hence, may be considered by this Court
motu proprio (Gov't. v. American surety Co., 11 Phil. 203 [1908]).

Moreover, to decide either way, whether for appellants or for the appellees, without making a pronouncement on the
fundamental point of jurisdiction, would not be conducive to the orderly administration of Justice. For to sustain appellant's
plea that the complaint for damages was not prematurely filed would result in the 'remanding of the case for further
proceedings to the lower court which, as already indicated, has no jurisdiction over the same. On the other hand, if WE find for
appellees, WE would be upholding an order premised on an erroneous legal assumption that the lower court has jurisdiction
over the appellant's complaint for damages.

5. There is therefore no need to resolve the several issues raised by the contending parties in view of the above conclusions
reached.

WHEREFORE, THE APPEAL IS HEREBY DISMISSED, WITH COSTS AGAINST PLAINTIFF-APPELLANT.

SO ORDERED.

Fernando, C.J., Teehankee, Aquino, Concepcion, Jr., Guerrero, Abad Santos, De Castro, Melencio-Herrera, Plana, Escolin,
Vasquez, Relova and Gutierrez, Jr., JJ., concur.1äwphï1.ñët

Barredo, J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-32953 March 31, 1977

RIZALINO HOLGANZA, LEOCADIO RAMIREZ, ALEGRIA CELIS, LEVY A. RACELIS, GREGORIO CADIENTE, JR., PEDRO
DIONEDA, RAUL LARRACAS, EMILIO LEONOR, JR., ARISTIDES PARAS, CONRADO YACABA, CELSO DE GUZMAN,
RAFAEL DE LA PEÑA, ROMEO CACHOLA, and RICARDO LUMAWIG, petitioners,
vs.
HON. SERGIO A. F. APOSTOL, as Judge of the Court of First Instance of Rizal, Quezon City Branch No. XVI, and THE
SOCIAL SECURITY SYSTEM, respondents.

Gertrudo G. Aquino for petitioner.

Filemon Q. Almazan, Mauricio M. Rivera, Perlita J. Tria Tirona & Gelacio L. Bayani for respondent Social Security System.

FERNANDO, J.:têñ.£îhqwâ£

The necessity for this certiorari and prohibition proceeding filed by petitioners precisely on the ground of lack of jurisdiction
could have been obviated, the case against them in the court of first instance presided by respondent Judge Sergio A.F.
Apostol being for the recovery of damages allegedly arising from picketing carried on during a strike against private
respondent, the Social Security System. There was a motion to dismiss, but it was denied. That was not in accordance with
the authoritative doctrine which would leave such matters to the labor tribunal. That has been the settled law for some time. In
October of last year, in Goodrich Employees Association v. The Honorable Delfin B. Flores , 1 it was again reiterated. There is
thus merit to this suit for prohibition and certiorari.

Private respondent Social Security System filed with the lower court a complaint for damages with writ of preliminary
attachment against the defendants named therein, included among whom are the present petitioners. 2 Thereafter, petitioners
filed a motion to dismiss, premised primarily on the ground of lack of jurisdiction, with the added objection that the action was
premature. 3 The motion to dismiss included as annexes the complaint in Case No. V-41 as well as Case No. 46-IPA, then
both pending in the Court of Industrial Relations, the latter being certified to such tribunal by the President. 4 There was an
opposition to such motion. 5 It was sustained by respondent Judge in these words: "For lack of merit, the motion to dismiss
filed by the defendant-movants is hereby denied. The defendant-movants are directed to file the necessary answer within the
prescribed period provided for in the Rules of Court." 6 There was a motion for reconsideration, but it was denied. Hence this
petition.

The jurisdictional issue, as noted, must be decided in favor of petitioners. There is this appraisal of the nature of the action
instituted against them by private respondent, the Social Security System: "Clearly, the complaint for damages is deeply
rooted from the labor dispute certified by the President of the Philippines and from which resulted a collective bargaining
agreement that was adopted as the court award. This award, in turn, branched out to disputes that led to the strike. On the
basis of this strike, the SSS petitioned the CIR to declare the said strike illegal, to dismiss the striking employees, and to
declare the officers in contempt of court. And the claim for damages is the result of the strike. The SSS alleges that: "19. As a
result of the Defendants' strike and picketing from September 3, 1968 to September 18, 1969, staged as aforesaid, in violation
of the CIR award of August 5, 1966, as well as the orders of the CIR of August 29, 1966 and September 3 and September 5,
1968, plaintiff suffered actual and sequential damages ..." (par. 19, Complaint, Annex "A"; emphasis supplied). Likewise, in
paragraphs 20 and 21 of the complaint the SSS seeks exemplary and moral damages in view of the defiance of the CIR
orders and also because of the strike and picketing as thus alleged. In fine, the alleged damages, the strike and picketing, the
alluded CIR orders, the petition to declare the said strike illegal, to dismiss the striking employees, and to declare the officers
in contempt of court — are so intertwined and inseparable from each other. Except for the aspect of damages, all these
incidents are embraced in CIR Case No. 46-IPA and which are all still pending." 7 As far back as Associated Labor Union v.
Gomez, 8 the exclusive jurisdiction of the Court of Industrial Relations in disputes of this character was upheld. "To hold
otherwise," as succinctly stated by the ponente, Justice Sanchez, "is to sanction split jurisdiction — which is obnoxious to the
orderly administration of Justice." 9 Then in Progressive Labor Association v. Atlas Consolidated Mining and Development
Corporation, 10 decided three years later, Justice J.B.L. Reyes, speaking for the Court, stressed that to rule that such demand
for damages is to be passed by the regular court of justice, instead of leaving the matter to the Court of Industrial Relations,
"would be to sanction split jurisdiction, which is prejudicial to the orderly administration of justice." 11 Thereafter, this Court, in
the cases of Leoquenio v. Canada Dry Bottling Co. 12 and Associated Labor Union v. Cruz, 13 with the opinions coming from the
same distinguished jurist, adhered to such a doctrine the latest case in point, as noted at the outset, is the Goodrich
Employees Association decision. The lack of jurisdiction of respondent Judge is thus manifest.
WHEREFORE, the writ of certiorari is granted, respondent Judge being devoid of jurisdiction to entertain Civil Case No. Q-
12541, entitled, Social Security System v. Philippine Association of Free Labor Unions (PAFLU), pending in this sala. The writ
of prohibition prayed for is likewise granted, and the lower court restrained from taking any further action on the aforesaid case
except for the purpose of dismissing the same.

Barredo, Antonio, Aquino and Concepcion Jr., JJ., concur.

Footnotes

1 L-30211, October 5, 1976.

2 Petition , The Case, par I. The case is entitled, Social Security System v. Philippine Association of Free Labor Unions
(PAFLU), Civil Case No. Q-12541.

3. Ibid, par. II and Annex B.

4 Ibid, par. III.

5 Ibid, par. IV.

6 Ibid, pars. V and VII.

7 Ibid, Reasons and Authorities in Support of These Issues, 7-8.

8 L-25999, February 9, 1967, 19 SCRA 304.

9 Ibid, 309.

10 L-27585, May 29, 1970, 33 SCRA 349.

11 Ibid, 355.

12 L-28621, February 22, 1971, 37 SCRA 535.

13 L-28978, September 22, 1971, 41 SCRA 12.

 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 108731 December 10, 1997

DEL MAR DOMESTIC ENTERPRISES and MARIO CHAN, SR., petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION, NESTOR HISPANO, LEXIETH LEGASPI, AMADO AGUSTIN, CANDIDO
AGUILLEN, EDEN MORALDEC, JOSEPHINE TUMANLAO and VILMA AGUSTIN, respondents.

 PANGANIBAN, J.:

An appeal from a decision of the labor arbiter must be filed within ten days from receipt. This is mandatory and jurisdictional.
However, failure to allege the date of receipt of such decision in the appeal memorandum is not jurisdictional but only
procedural. Business losses as a just cause for termination of employment must be serious substantial and actual. Such
alleged losses must be established by sufficient and convincing evidence, the burden lying heavily on the employer who
knows fully well that such an action can greatly affect the lives and careers of his employees.

The Case

These are the legal principles used in resolving this special civil action for certiorari under Rule 65 of the Rules of Court,
assailing the October 13, 1992 and January 11, 1993 Resolutions of the National Labor Relations Commission (Respondent
Commission for brevity) in NLRC NCR 00-02-113-90 which modified the labor arbiter's decision and granted private
respondents separation pay equivalent to one-half month's salary for every year of service.

Private Respondents Nestor Hispano, Lexieth Legaspi, Amado Agustin, Candido Aguillon, Eden Moraldec, Josephine
Tumanlao, and Vilma Agustin filed a complaint for illegal dismissal, nonpayment of overtime pay, holiday pay, premium pay
and separation pay against Petitioners Del Mar Enterprises and Mario Chan, Sr. Labor Arbiter Manuel P. Asuncion conducted
conciliation proceedings, but no settlement was reached. After submission of position papers, the labor arbiter rendered a
decision dated July 5, 1990, the dispositive portion of which reads: 1

WHEREFORE, the respondent Mario Chan is hereby ordered, to pay the herein complainant [Nestor Hispano], separation pay, for
the services he rendered at the latter's chicharon repacking business at the equivalent of 1/2 month salary for every year of service,
but, in no case, to go lower than one month salary. The amount of P1,500.00 advanced to the complainant may be deducted from
the award.

The complaint of the other complainants are dismissed for lack of merit.

On appeal, the Second Division of Respondent Commission, 2 in the Resolution dated October 13, 1992, modified the ruling of
the labor arbiter by granting the plea of the other complainants. 3

IN VIEW OF THE FOREGOING, let the decision of the Labor Arbiter be, as it is hereby set aside and a new one promulgated
ordering respondents Del Mar Domestic Enterprises and/or Mario Chan Sr. to pay herein individual complainants their separation
pay equivalent to one-half month's salary for every year of service. The separation pay of Nestor Hispano should cover the period
1970 up to December 29, 1985. However, the amount of P1,500.00 which was advanced to him by respondents as financial
assistance should be deducted from his total award.

Respondent Commission denied reconsideration in the assailed minute Resolution dated January 11, 1993: 4

After due consideration of the Motion for Reconsideration filed by respondents-appellees on October 28, 1992 from the Resolution
of October 13, 1992, the Commission (Second Division) RESOLVED to deny the same for lack of merit.

Hence, this petition. 5 On March 31, 1993, the First Division of this Court enjoined the execution of the challenged Resolution
during the pendency of this petition and until further order from this Court. 6

The Facts

Quoted hereunder is the recital of the facts found by Respondent Commission: 7

The complainants [herein private respondents] alleged to have worked with respondent company [herein petitioner] on the following
dates:
 Date Hired Date Dismissed

a. Nestor Hispano 1970 1989

b. Lexieth Legaspi 1967 1987

c. Amado Agustin 1977 1987

d. Candido Aguillen 1973 1987

e. Eden Moraldec 1982 1987

f. Josephine Tumanlao 1981 1987

g. Vilma Agustin 1982 1987

Complainants were dismissed by the respondents during the strike in March, 1987 for alleged abandonment of work.

Complainants protested that they were only verbally informed that their services were no longer needed and that they were
considered dismissed from work; and that pursuant to Section 2, Rule XIV, Book V of the Rules implementing the Labor Code, they
were dismissed without due process. Accordingly, they claim[ed] they should be awarded moral and exemplary damages and
attorney's fees and ordered reinstated without loss of seniority rights and benefits and with full backwages.

In defense, the [petitioners herein] averred that in gross violation of [its] CBA with Bayanihan Food Workers Labor Union, where the
Union agreed not to strike against the company during the life or effectivity of the agreement, the Union staged a strike on March 3,
1987; and that the decision of Labor Arbiter Eduardo Magno, declaring the said strike illegal is pending [a]ppeal before the
Commission.

[Petitioners] further claim[ed] that during the height of the strike, a fire of undetermined origin razed to the ground about 70% of the
company's premises rendering the factory useless and inoperable; that complainants Lexieth Legaspi, Eden Moraldec, and Vilma
Agustin were never employed by the respondents and that they have no record of employment with them; that complainants Amado
Agustin, Candido Aguillen and Josephine Tumanlao are all union members and as per verification of the CBA, they were among the
signatories thereof; and that although they were not present in the picket area, they sympathized with the strikes as they refused to
report for work and gave financial and material contributions to the strikers.

As regards complainant Nestor Hispano, [petitioners] alleged that he was a company guard; that he was rendered jobless by reason
of the fire that gutted the company; that out of pity, he was taken in as [a] utility man at respondent Mario Chan's residence, where
the latter has a small repacking business of [c]hicharon; that sometimes he was assigned to do some repacking of chicharon,
sometimes as gardener and at other times assisted the regular houseboy. 8

[Petitioner] Mario Chan also averred that upon advi[c]e of the Licensing Authority of the Quezon City Government, repacking at his
residence was closed, as it was prohibited and in violation of the Subdivision Rules and Regulations; and that upon demand,
Hispano was paid financial assistance of P1,500.00 as evidenced by his written request.

[Petitioners] maintain[ed] that complainants' failure to report for work since the inception of the illegal strike is a clear manifestation
of abandonment of work, and that their filling of the instant complaint is barred by laches and prescription.

In disposing of the case, the Labor Arbiter resolved that all complainants lost their employment by reason of the fire and [were] not
entitled to severance pay, except for complainant Hispano who continued to work with [Petitioner] Chan as utility man and who is
entitled to separation benefits for his services therein, but ruled that the amount P1,500.00 given him as financial assistance should
deducted therefrom.

Issue

The sole issue for resolution presented by petitioners 9 in their Memorandum 10 dated December 21, 1997, is as follows:

Whether or not the public respondent gravely erred and committed grave abuse of discretion amounting to lack of jurisdiction in
reversing the Decision a quo and consequently awarding and ordering payment of separation pay to herein private respondents.

In the main, petitioners argue that public respondent committed grave abuse of discretion by (1) entertaining private
respondents' appeal despite their failure to specify the date they received the labor arbiter's decision and (2) granting
separation pay to private respondents despite their alleged abandonment of their employment and despite business losses
suffered by petitioners.

The Court's Ruling

The petition is not meritorious.

First Issue: Failure to Allege Material

Date Is Not Jurisdictional
In their appeal before Respondent Commission, private respondents failed to allege the date when they received the
challenged decision of the labor arbiter. 11 Thus, petitioners argue that: 12

1. The Appeal is fatally defective for it failed to allege the jurisdictional fact of when did ( sic) appellant received copy of the
questioned Decision. This requirement is mandatory under Section 5 of the NLRC Interim Rules on Appeal under R.A. 6715 . . . .

Thus, the [a]ppeal must be dismissed outright for it is not in conformity with the requisites necessary for the perfection of an
[a]ppeal. In this jurisdiction, the rule is, once the Appeal is not perfected, the Decision . . . a quo becomes final and executory.
(Emphasis in the original.)

Respondent Commission ruled that such failure did "not constitute a fatal defect to warrant the dismissal of the appeal:"

On the other hand, the respondents-appellees [herein petitioners] based their opposition to the appeal principally on the ground that
the failure to allege in the appeal of complainants the date when they received [a] copy of the questioned Decision is mandatory
under Section 5 of the NLRC Interim Rules on Appeal under R.A. 6715 and is a necessary requisite for the perfection of appeal.

xxx xxx xxx

After careful perusal of the record, we find the appeal to be well taken.

While complainant's appeal did not indicate the date when the decision a quo was received by appellants, the same does not
constitute a fatal defect to warrant the dismissal of the appeal. . . . We will therefore, give due course to complainants' appeal.

We agree with the holding of Public Respondent NLRC. The only jurisdictional requisites for appeals under Article 223 of the
Labor Code are (1) the perfection of the appeal within the reglementary period of ten days from receipt of an award, decision
or order and (2) the posting of a cash or surety bond in appeals involving monetary awards. 13 Section 5 of the Revised Rules
of the National Labor Relations Commission 14 — which requires that an appeal specify (1) the grounds relied upon and the
arguments in support thereof, (2) a statement of the date when the appellant received the decision or order, and (3) proof of
service on the other party — is merely a rundown of the contents of the required appeal memorandum to be submitted by the
appellant. These are not jurisdictional requirements.

Besides, the omitted datum is verifiable. The records of Respondent Commission reveal that the Notice of
Decision/Award/Order dated July 5, 1990 of the labor arbiter was received by counsel for the private respondents on July 10,
1990. 15 Thus, private respondents' appeal was filed on July 20, 1990, 16 which was within the prescribed period. 17 Even
petitioners did not contravene the Solicitor General's insistence that the appeal was actually filed with the ten-day
reglementary period.

Furthermore, consideration of the appeal by the public respondent, notwithstanding the failure of the appellant to allege a
material date in the appeal memorandum, is an innocuous mistake which caused no prejudice to the parties. The same
constitutes, at most, a reversible error, which is not a proper subject of a special civil action for certiorari under Rule 65 of the
Rules of Court.
The disquisition in the recent case of Flores vs. National Labor Relations Commission is apropos:
18

It should be noted, in the first place, that the instant petition is a special civil action for certiorari under Rule 65 of the Revised Rules
of Court. An extraordinary remedy, its use is available only and restrictively in truly exceptional cases — those wherein the action of
an inferior court, board or officer performing judicial or quasi-judicial acts is challenged for being wholly void on grounds of
jurisdiction. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse
of discretion amounting to lack or excess of jurisdiction. . . . .

In any event, our labor adjudication system, as held in Lamsan Trading, Inc. v. Leogardo, Jr., 19 rests on the norm that "rules of
technicality must yield to the broader interest of substantial justice."

In Kapisanang Manggagawang Pinagyakap vs. National Labor Relations Commission, 20 the Court applied this norm when it
overturned the dismissal of petitioner-employee's motion for reconsideration for failure to furnish respondent-company with a
copy of the memorandum of appeal. The Court, through Mr. Chief Justice Claudio Teehankee, emphatically ruled that "where
a decision may be made to rest on informed judgment rather than rigid rules, all the equities of the case must be accorded
their due weight; . . . labor determinations . . . should be not only secundum rationem but also secundum caritatem." 21

We repeat: the appeal was undisputedly fried within the ten-day reglementary period. That Respondent Commission gave due
course to the appeal notwithstanding the failure of private respondents to allege the date of their receipt of the labor arbiter's
decision does not constitute grave abuse of discretion. The failure to file the appeal within the prescribed period is
jurisdictional. But the failure to state the date of receipt of the assailed decision is only a procedural lapse that is addressed to
the sound discretion of the NLRC. Considering that the timeliness of the appeal could be verified from the records, the NLRC
committed no grave abuse of discretion in overlooking this technical matter.
 Second Issue: Liability for Separation Pay

Petitioners argue that private respondents are not entitled to separation pay because they abandoned their work when they
refused to heed management's call for resumption of work and an end to the strike. Petitioners also contend that the labor
arbiter's factual finding on this matter prevails over that of Respondent Commission.

No Intent to Sever
Employment

The Court finds no factual or legal basis for the contention that private respondents abandoned their employment.
Abandonment as a valid cause for termination requires a deliberate, unjustified refusal of the employee to resume his
employment. Failure to report for work or absence without valid or justifiable reason does not constitute abandonment if not
coupled with a clear intention to sever the employer-employee relationship. 22 In this case, private respondents reported for
work after the factory was burned, but petitioners informed them to wait for the resumption of operation. Hence, we cannot
infer an intent on the part of private respondents to abandon their work. The observations of the solicitor general bolster the
Court's conclusion: 23

Noteworthy is that when fire razed down petitioners' factory in March 1987, private respondents, who sought to return to work, were
advised by petitioners to wait as business operations would be resumed. Private respondents' interest in going back to work
negates the claim of abandonment. Their absence from work which was neither deliberate nor unjustified, cannot constitute
abandonment of work as valid cause for termination of their services. (Dagupan Bus Company, Inc. v. NLRC, 191 SCRA 328 [1990];
Nueva Ecija I Electric Cooperative, Inc. v. Minister of Labor, 184 SCRA 25 [1990], Atlas Consolidated Mining and Development
Corporation v. NLRC, 190 SCRA 505 [1990])

Serious Business Losses

Not Proven

Petitioners strongly contend that "while the strike was in progress, the factory building of the petitioners was razed to the
ground . . . which rendered the same inoperable and which rendered Petitioner Company out of business." They insist that the
labor arbiter's conclusion that private respondents were not entitled to separation pay by reason of the cessation of business
operations caused by the fire should prevail over that of Respondent Commission. Petitioners specifically cite the labor
arbiter's decision, viz.:

The fire that [razed] the factory rendered the production inoperable. . . . The cessation of business operations in the respondent
firm, by reason of the fire severed the employment relationship of the complainants, but in the process, the respondent employer is
not under obligation to extend severance benefit.

After the fire, respondent, Mario Chan, opened another business, a small "chicharon" repacking outfit inside his residence. Here,
complainant, Nestor Hispano was taken in as a utility man. The operations had to stop, because, the authorities ordered its closure,
since, such business endeavor is prohibited under the Subdivision rules and regulations. Appraised of the situation, the
complainant, asked and was paid by respondent [C]han, P1,500.00 as separation pay.

In resume, all the complainants lost their employment by reason of the fire and not entitled to any severance pay . Complainant,
Nestor Hispano, who worked for respondent, Mario Chan, in another business which was ordered stopped by the authorities, is
entitled to separation benefit, from the time he was hired as utility man until the closure order. The amount of P1,500.00 which was
advanced is deductible from the benefit due. (Emphasis supplied.)

As earlier observed, Respondent Commission reversed this finding:

Let it be noted that after fire gutted [petitioners'] factory in March 1987, there was no notice whatsoever that [petitioners] would close
their business operation. As a matter of fact, when the complainant went to the factory premises, they were consistently informed
that [petitioners] would resume its business operations and they were advised to wait. It was only when complainants filed the
instant complaint for illegal dismissal when the [petitioners] raised the issue of closure of business operations.

In a similar case decided by the Supreme Court in the case of Cebu Stevedoring Co., Inc. vs. Regional Director, G.R. No. 54285,
December 8, 1988, 168 SCRA 315, the [C]ourt ruled as follows:

The employer's submission that it is suffering financial losses is untenable. It absorbed and employed for
almost six months, without any intimation of supposed financial distress, the majority of the employees of its
predecessor, it never advised the dismissed employees of a company retrenchment program. The first time
this supposed program was mentioned was when the employer tried to justify the dismissal of the employees
before the labor arbiter. In a futile attempt to extricate itself from liability, it presented a so-called statement of
operations which, however, remains uncorroborated and self-serving evidence.

We therefore hold that respondent's should pay herein individual complainants, separation pay equivalent to one-half months salary
for every year of service.

xxx xxx xxx

 As regards the ruling of the labor [a]rbiter that the separation pay due to complainant Nestor Hispano should cover only the period
1987 when he was hired as utility man by respondent Mario Chan until the closure order, we find the same to be unjust because
record shows that Hispano started working with respondents from 1970 up to December 29, 1989 when he was unceremoniously
dismissed by respondents. He should therefore be entitled to separation pay equivalent to one-half month's salary for every year of
service from 1970 up to December 29, 1989.

We cannot sustain petitioners' contention. The alleged serious business losses sustained by petitioner-company from the fire
were not substantiated by competent evidence. Financial statements audited by independent external auditors, as the Court
previously ruled, constitute the normal method of proof of the profit and loss performance of a company. 24 Admittedly, the
factory fire caused losses to petitioner-company. Petitioners, however, failed to show how such fire so affected the company's
financial health that it had to close shop. Not every loss incurred by a company justifies closure of business. To exempt an
employer from the payment of separation pay, he or she must establish by sufficient and convincing evidence that the losses
were serious, substantial and actual. 25 Clearly, petitioners failed to discharge this duty. Therefore, petitioners' liability for
separation pay under Article 283 of the Labor Code is beyond question. 26

WHEREFORE, the petition is hereby DISMISSED. The assailed Resolutions are AFFIRMED. The temporary restraining order
dated March 31, 1993 is hereby LIFTED. Costs against petitioners.

SO ORDERED.

Narvasa, C.J., Romero, Melo and Francisco, JJ., concur.

Footnotes

1 Rollo, p. 49.
2 Composed of Presiding Commissioner Edna Bonto-Perez, ponente; and Comm. Rogelio I. Rayala, concurring, Comm. Domingo
H. Zapanta was on leave.
3 Rollo, p. 31.
4 Ibid, p. 33.
5 The case was deemed submitted for resolution upon receipt by the Court on February 27, 1996 of private respondents'
manifestation and motion praying that their comment be considered their memorandum.
6 Rollo, p. 79.
7 Ibid., pp. 24-28.
8 Petitioner-corporation was originally engaged in the manufacture of banana chips. Rollo, p. 9.
9 Eufemio Law Offices.
10 Rollo, p. 178.
11 Ibid., pp. 50-57.
12 Ibid., pp. 58-59.
13 Appeal bond is required by the amendment in Sec. 12, R.A. 6715.
14 Now Section 3, Rule VI of the New Rules of Procedure of the National Labor Relations Commission, effective October 9, 1990.
15 NLRC Records, p. 34.
16 NLRC Records, p. 70.
17 The Labor Code provides:
Art. 223. Appeal. — Decisions, awards; or orders of the Labor Arbiter or compulsory arbitrators are final and executory unless
appealed to the Commission by any or both of the parties within ten (10) days from receipt of such awards, orders, or decisions. . . .
18 253 SCRA 494, 497, February 9, 1996, per Panganiban, J.
19 144 SCRA 571, 578, September 30, 1986, per Gutierrez, J.
20 152 SCRA 96, 101, July 16, 1987, per Teehankee, C.J.
21 152 SCRA 96, 101, July 16, 1987.
22 Balayan Colleges vs. National Labor Relations Commission, 255 SCRA 1, 10, March 14, 1996, per Kapunan, J.
23 Rollo, pp. 109-110.
24 Saballa, ibid, p. 709; and Catatista vs. NLRC, ibid., p. 52.
25 Guerrero, vs. National Labor, Relations Commission, 261 SCRA 301, 306-307, August 30, 1996, per Puno, J.
26 "Art. 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any
employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by
serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. . . . In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year."
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 122725 September 8, 1999

BIOGENERICS MARKETING AND RESEARCH CORPORATION and WOLFGANG ROEHR, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and SERAFIN G. PANGANIBAN, respondents.

BELLOSILLO, J.:

The requirement of a cash or surety bond for the perfection of an appeal from a Labor Arbiter's monetary award is
jurisdictional; non-compliance therewith is fatal and renders the award final and executory. Corollarilly, failure to file a motion
for reconsideration of a resolution of the National Labor Relations Commission (NLRC) as a requisite sine qua non in pursuing
any further relief or subsequent remedy likewise gives a stamp of finality to the resolution.

On 13 March 1991 petitioner Biogenerics Marketing and Research Corporation (BIOGENERICS), a domestic corporation,
through petitioner Wolfgang Roehr, Chairman of its Board of Directors, employed private respondent Serafin G. Panganiban
as its President and General Manager. On 18 December 1992, acting on an information that respondent Panganiban was
allegedly trying to form a corporation in competition with BIOGENERICS, petitioner Roehr dismissed Panganiban from
employment without prior notice. 1 On 27 January 1993 Panganiban filed a complaint for illegal dismissal, back wages,
separation pay, moral and exemplary damages, and attorney's fees.

BIOGENERICS in its answer contended that Panganiban was not dismissed but that he voluntarily resigned from employment
after being confronted with his alleged disloyal act of planning to set up a corporation in competition with the business of his
employer. 2

On 18 May 1994 the Labor Arbiter ruled that the dismissal of Panganiban was illegal having been effected without just cause
and without due process. Accordingly, BIOGENERICS and Roehr were held solidarily liable to Panganiban for P330,000.00
representing his separation pay, P1,870,000.00 as back wages, P500,000.00 as moral damages, P500,000.00 as exemplary
damages, and 10% of the total amount thereof as attorney's fees. 3

On 13 June 1994 BIOGENERICS filed before the NLRC a "Memorandum of Appeal" and "Motion to Reduce Appeal Bond"
reiterating Panganiban's voluntary resignation. BIOGENERICS stressed that the award of back wages was proper only when
the dismissal of an employee was unjust or unlawful and not when the severance of employer-employee relationship was
initiated by the employee. In strengthening their position to reduce the requisite appeal bond, petitioners argued that
considering that the authorized capital stock of the corporation was only P2,000,000.00, an amount which was very much less
than that awarded, posting the entire amount of the bond would necessarily put the corporation in a serious and precarious
financial condition. Consequently, a cash bond of P50,000.00 only was initially posted by petitioners.1âwphi1.nêt

On 17 August 1994 the NLRC, finding that petitioner corporation had no justification for a substantial reduction of the bond
other than its limited authorized capital stock, ordered petitioners to post an additional cash or surety bond in the amount of
P1,950,000.00 within a non-extendible period of ten (10) days from receipt, with a warning that their failure to comply therewith
would result in the dismissal of the appeal. 4

On 15 September 1994 BIOGENERICS moved for reconsideration praying for further reduction of the bond. It averred that the
P2,000,000.00 bond would still put a significant strain on its resources and derail its efforts to recover the business losses it
sustained in 1993 as reflected in its financial statement.

On 30 September 1994 the NLRC denied the motion for reconsideration and disregarded petitioners' claim of serious
business losses. It clarified that the bond required need not be in cash for the law and the implementing rules allowed the
posting of a bond in the form of surety secured from reputable bonding insurance company. However, as a gesture of
liberality, instead of dismissing the appeal, the NLRC granted petitioners another non-extendible period of five (5) days within
which to post additional bond, again, with a warning that failure to post the same would mean a non-perfection of its appeal.

On 22 November 1994 petitioners filed an "Irrevocable Bank Guarantee No. GTE MNL 940027" in the amount of
P1,950,000.00 as additional appeal bond which was entered into by and between BIOGENERICS and Hongkong and
Shanghai Banking Corporation Limited. The instrument contained a statement that the "Guarantee will remain in force up to
21 November 1995" 5 or only for a period of one (1) year from the signing of the agreement.

As a consequence, the NLRC rejected the "Bank Guarantee" as a substitute for the bond holding that what is contemplated
under Art. 223 of the Labor Code, as amended, is a cash or surety bond, and in case of a surety bond, the same must be
issued by a reputable bonding company duly accredited by the Commission or the Supreme Court as provided under Sec. 6 of
Rule 6 of the New Rules of Procedure of the NLRC. Thus, for the third time, the NLRC ordered petitioners to post a cash or
surety bond within a non-extendible period of five (5) days.

On 20 February 1995, in compliance with the order of the NLRC, petitioners through Ms. Carmen Rodriguez, BIOGENERICS'
Chairman of the Board and estranged wife of Roehr, filed a cash bond (RCBC Manager's Check No. 001097) in the amount of
P1,940,240.00 plus a deposit fee of P9,760.00 for a total amount of P1,950,000.00.

On 1 March 1995 Rodriguez moved to withdraw the cash bond alleging that she voluntarily posted the cash bond on the
mistaken belief that she had the obligation to post the bond in behalf of her husband and she learned upon advice that it was
the legal duty of BIOGENERICS as appellant to post the necessary appeal bond.

It allowing the withdrawal of the bond, the NLRC relied on the provision of Sec. 6 of Rule 6 of the New Rules of Procedure
which states that it is the employer who should post the cash or surety bond. It stated that in the present case, it was the wife
of Roehr who posted the cash bond, which was contrary to the rules. In the Resolution of 6 March 1995, petitioners were also
directed for the last time to post the requisite appeal bond within ten (10) days from notice with a final warning that the non-
posting of the bond would eventually cause the dismissal of the appeal. Petitioners did not file a motion for reconsideration.

On 5 June 1995 the NLRC issued the assailed resolution dismissing the appeal for petitioners' failure to post the required
bond. 6 The records showed that the Resolution of 6 March 1995 was received by counsel for petitioners on 7 March 1995. 7
However, petitioners opted not to comply with the Resolution. As a consequence, the NLRC considered the appealed decision
as affirmed and thus had become final and executory.

Petitioners moved for reconsideration contending that the "NLRC should not have allowed Rodriguez to withdraw the cash
bond because the money used in the posting of the cash bond belonged to Roehr and that the order of the NLRC directing
petitioners to post another appeal bond would not only be off-tangent but certainly oppressive and confiscatory." 8 Their motion
having been denied, petitioners sought the present recourse by imputing grave abuse of discretion to the NLRC.

We must first examine the consequence of petitioners' inaction after the receipt by their counsel on 7 March 1995 of the NLRC
Resolution of 6 March 1995. This Resolution allowed the withdrawal of the cash bond by Ms. Carmen Rodriguez and ordered
petitioners for the fourth time to post the requisite appeal bond. As found by the NLRC and reflected in the records, there was
no dispute that counsel for petitioners had indeed received the Resolution. The failure to file a motion for reconsideration on
the pretext that he did not receive the Resolution was fatal and thus rendered it final and executory.

We have ruled that the implementing rules of respondent NLRC are unequivocal in requiring that a motion for reconsideration
of the order, resolution or decision of respondent Commission should be seasonably filed as a precondition for pursuing any
further or subsequent recourse, otherwise, the order, resolution or decision would become final and executory after ten (10)
calendar days from receipt thereof. 9 Obviously, the rationale therefor is that the law intends to afford the NLRC an opportunity
to rectify such errors or mistakes it may have committed before resort to courts of justice can be had. This merely adopts the
rule that the function of a motion for reconsideration is to point out to the court the error it may have committed and to give it a
chance to correct itself. Subsequent issuance by the NLRC of the questioned Resolution dated 5 June 1995 was, therefore, a
mere surplusage sought only to formalize the finality of the order. On the other hand, the motion for reconsideration thereon by
petitioners was futile and belated as there was already a final judgment.

But a far more compelling factor militates against petitioners which convinces us that the instant petition is devoid of merit. It is
obvious that since no appeal bond was posted by petitioners, no appeal was perfected from the decision of the Labor Arbiter,
for which reason the decision sought to be appealed to the NLRC had in the meantime become final and executory and
therefore immutable.

Appeals from decisions of the Labor Arbiter are governed by the following provisions of Rule VI of the New Rules of Procedure
of the NLRC —

Sec. 1. Period Appeal. — Decisions, awards, or orders of the Labor Arbiter and the POEA are final and excutory unless appealed to
the Commission by any or both parties within ten (10) calendar days from receipt of such decision, awards or orders of the Labor
Arbiter or the Administrator, and in case of a decision of the Regional Director or his duly authorized Hearing Officer, within five (5)
calendar days from receipt of such decisions, awards or orders. . . .

Sec. 3. Requisites for Perfection of Appeal. — The appeal shall be filed within the reglementary period as provided in Sec. 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
Sec. 5 of this Rule; shall be accompanied by memorandum of appeal. . . .
 Sec. 6. Bond. — In case the decision of a Labor Arbiter involves a monetary award, an appeal by the employer shall be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission or the
Supreme Court in the amount equivalent to the monetary award.

Thus it is clear that the appeal from any decision, award or order of the Labor Arbiter to the NLRC shall be made within ten
(10) calendar days from receipt of such decision, award or order, and must be under oath, with proof of payment of the
required appeal fee accompanied by a memorandum of appeal. In case the decision of the Labor Arbiter involves a monetary
award, the appeal is deemed perfected only upon the posting of a cash or surety bond also within ten (10) calendar days from
receipt of such decision in an amount equivalent to the monetary award. The mandatory filing of a bond for the perfection of
an appeal is evident from the aforequoted provision that the appeal may be perfected only upon the posting of cash or surety
bond. It is not an excuse that the over P2 million award is too much for a small business enterprise, like the petitioner
company, to shoulder. The law does not require its outright payment, but only the posting of a bond to ensure that the award
will be eventually paid should the appeal fail. What petitioners have to pay is a moderate and reasonable sum for the premium
for such bond. 10

BIOGENERICS filed its "Memorandum of Appeal" and "Motion to Reduce Appeal Bond" with the NLRC on 13 June 1994 or
exactly on the tenth day of the reglementary period. Having failed to adduce a valid justification for the reduction of the appeal
bond to overcome the mandatory nature of the requirement, the NLRC denied its motion but granted petitioners a new period
of ten (10) days within which to post the bond. But, again, petitioners failed to post the bond; instead, they moved for
reconsideration. On this score alone, the appeal of BIOGENERICS should have been dismissed outright for not having been
perfected on time. That the NLRC entertained the motion for reconsideration and even went to the extent of further granting
petitioners three (3) extensions, or a total of thirty (30) days including the first extension, within which to post the appeal bond,
indicated its over-leniency to disregard the Labor Code as well as its own Rules to favor petitioners. Worse, petitioners gravely
abused the liberality extended by the Labor Tribunal when they persistently failed and refused to post the bond despite the
extensions given them.

Finally, in an attempt to provide their petition a semblance of merit, petitioners maintain that the NLRC should have not
allowed Ms. Carmen Rodriguez to withdraw the appeal bond as the money used for the purpose allegedly belonged to
petitioner Roehr. This last-ditch effort to thwart the claim of private respondent Panganiban deserves scant consideration.
Petitioners failed to substantiate this claim.

WHEREFORE, the petition is dismissed. The assailed Resolution of the National Labor Relations Commission dated 5 June
1995, respectively, and 24 October 1995 are AFFIRMED.1âwphi1.nêt

SO ORDERED.

Mendoza, Quisumbing and Buena, JJ., concur.

Footnotes

1 Records, pp. 17-18.

2 Id., p. 36.

3 Decision penned by Labor Arbiter Donato G. Quinto, Jr.; Records, p. 362.

4 Rollo, p. 66.

5 Ibid.

6 Records, pp. 556-557; Rollo, pp. 9-10.

7 Bailiff's Return issued by Ernesto C. Provido, Bailiff II, NLRC; Records, p. 582.

8 Rollo, p. 6.

9 Zapata v. National Labor Relations Commission, G.R. No. 77827, 5 July 1989, 175 SCRA 56, 60.

10 See Unicane Worders Union-CLUP and its Members v. Unicane Food Products Mfg. Corp. and its Owner/Manager, Benido Ang, G.R. No.
107545. 9 September 1996, 261 SCRA 573, 584.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. Nos. 117442-43 January 11, 1995

FEM'S ELEGANCE LODGING HOUSE, FENITHA SAAVEDRA and IRIES ANTHONY SAAVEDRA, petitioners,
vs.
The Honorable LEON P. MURILLO, Labor Arbiter, Regional Arbitration Branch, Region X, National Labor Relations
Commission, Cagayan de Oro City, ALFONSO GALLETO, GEORGE VEDAD, ROLAND PANTONIAL, REYNALDO
DELAORAO, FELICISIMO BAQUILID, CECILIO SAJOL, ANNABEL CASTRO, BENJAMIN CABRERA, RHONDEL
PADERANGA, ZENAIDA GUTIB, AIDA IMBAT and MARIA GRACE ATUEL, respondents.

RESOLUTION

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of court with temporary restraining order to reverse and set
aside the Order dated September 21, 1994 of the Labor Arbiter in the NLRC RAB X Cases Nos. 10-04-00232 (-00233)-94.

Petitioner FEM's elegance Lodging House is a business enterprise engaged in providing lodging accommodations. It is owned
by petitioner Fenitha Saavedra and managed by petitioner Iries Anthony Saavedra. Private respondents are former employees
of petitioners whose services were terminated between March and April, 1994.

Sometime after their dismissal from the employment of petitioners, private respondents separately filed two cases against
petitioners before the National Labor Relations Commission (NLRC), Regional Arbitration Branch No. X, Cagayan de Oro City,
docketed as NLRC RAB X Cases Nos. 10-04-00232-(0023)-94. Private respondents sought for unpaid benefits such as
minimum wage, overtime pay, rest day pay, holiday pay, full thirteenth-month pay and separation pay (Rollo, pp. 40-42).

On May 31, 1994, a pre-arbitration conference of the cases took place before the Labor Arbiter. It was agreed therein: (1) that
both labor cases should be consolidated; and (2) that the parties would file their respective position papers within thirty days
from said date or until June 30, 1994, after which the cases would be deemed submitted for resolution (Rollo, p. 14).

On June 29, petitioners filed their position paper. On July 7, they inquired from the NLRC whether private respondents had
filed their position paper. The receiving clerk of the NLRC confirmed that as of said date private respondents had not yet filed
their position paper.

The following events then transpired: on July 8, petitioners filed a Motion to dismiss for failure of private respondents to file
their position paper within the agreed period ( Rollo, p. 38); on July 15, private respondents belatedly filed their position paper;
on July 18, petitioners filed a Motion to Expunge [private respondents'] Position Paper from the records of the case ( Rollo, p.
45); and on August 23, the Labor Arbiter issued a notice of clarificatory hearing, which was set for September 7 ( Rollo, p. 47).
Prior to the hearing, petitioners filed a Motion to Resolve [petitioners'] Motion to dismiss and Motion to Expunge [private
respondent'] Position Paper from the Records of the Case (Rollo, p. 48).

On September 21, the Labor Arbiter issued the order denying the motions filed by petitioners. He held that a fifteen-day delay
in filing the position paper was not unreasonable considering that the substantive rights of litigants should not be sacrificed by
technicality. He cited Article 4 of the Labor Code of the Philippines, which provides that all doubts in the interpretation thereof
shall be resolved in favor of labor. He said that even under Section 15, Rule 5 of the Revised Rules of Court, a delay in the
filing of a position paper is not a ground for a motion to dismiss under the principle of exclusio unius est excludio alterius
(Rollo, pp. 51-52).

Hence, the present petition where petitioners charged the Labor Arbiter with grave abuse of discretion for issuing the order in
contravention of Section 3, Rule V of The New Rules of Procedure of the NLRC, Said section provides:

Submission of Position Papers/Memorandum . — . . . Unless otherwise requested in writing by both parties, the Labor Arbiter shall
direct both parties to submit simultaneously their position papers/memorandum with the supporting documents and affidavits within
fifteen (15) calendar days from the date of the last conference, with proof of having furnished each other with copies thereof
(Emphasis supplied).
Petitioners claimed that they were denied due process and that the Labor Arbiter should have cited private respondents in
contempt for their failure to comply with their agreement in the pre-arbitration conference.

We dismiss the petition for failure of petitioners to exhaust their remedies, particularly in seeking redress from the NLRC prior
to the filing of the instant petition. Article 223 of the Labor code of the Philippines provides that decisions, awards or orders of
the Labor Arbiter are appealable to the NLRC. Thus, petitioners should have first appealed the questioned order of the Labor
Arbiter to the NLRC, and not to this court. their omission is fatal to their cause.

However, even if the petition was given due course, we see no merit in petitioners' arguments. The delay of private
respondents in the submission of their position paper is a procedural flaw, and the admission thereof is within the discretion of
the Labor Arbiter.

Well-settled is the rule that technical rules of procedure are not binding in labor cases, for procedural lapses may be
disregarded in the interest of substantial justice, particularly where labor matters are concerned (Ranara v. National Labor
Relations commission, 212 SCRA 631 [1992]).

The failure to submit a position paper on time is not on of the grounds for the dismissal of a complaint in labor cases (The New
Rules of procedure of the NLRC, Rule V, Section 15). It cannot therefore be invoked by petitioners to declare private
respondents as non-suited. This stance is in accord with Article 4 of the Labor Code of the Philippines, which resolves that all
doubts in the interpretation of the law and its implementing rules and regulations shall be construed in favor of labor. Needless
to state, our jurisprudence is rich with decisions adhering to the State's basic policy of extending protection to Labor where
conflicting interests between labor and management exist (Aquino v. National Labor Relations Commission, 206 SCRA 118
[1992]).

Petitioners cannot claim that they were denied due process inasmuch as they were able to file their position paper. The proper
party to invoke due process would have been private respondents, had their position paper been expunged from the records
for mere technicality. Since petitioners assert that their defense is meritorious, it is to their best interest that the cases be
resolved on the merits. In this manner, the righteousness of their cause can be vindicated.

IN VIEW OF THE FOREGOING, the Court Resolved to DISMISS the petition for lack of merit.

SO ORDERED.

Davide, Jr., Bellosillo and Kapunan, JJ., concur.

 
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 91935 March 4, 1996

RODOLFO QUIAMBAO, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION AND CENTRAL CEMENT MARKETING CORP., respondents.

 MENDOZA, J.:p

This is a petition for certiorari to annul the decision of the National Labor Relations Commission in NLRC RAB II CN-0052086,
reversing the decision of Labor Arbiter Gregorio Calasan, finding petitioner to have been illegally dismissed, and accordingly
dismissing petitioner's complaint for lack of merit.

The facts are as follows:

Rodolfo Quiambao was hired as officer-in-charge of private respondent Central Cement Corporation's Tuguegarao Branch on
December 1, 1982. Six months later, he was made permanent Branch Manager at a monthly salary of P2,500.00 with a
monthly emergency cost of living allowance of P350.00 and a representation allowance of P200.00. Among other things,
petitioner, together with William Kho, the Branch Cashier, was in charge of credit collections. He submitted monthly reports to
the Central Office on the operations of the branch and the outstanding balances of its customers. He was also required to
attend regular monthly meetings in the Central Office, together with the Vice President for Marketing and the Marketing
Manager.

In April 1984, a financial and performance audit made by the Central Office showed the Tuguegarao Branch of which he was
the Manager to be in "a state of disarray and chaos."

On May 25, 1984, petitioner was suspended for an indefinite period for poor performance in extending credit to customers,
violation of company rules and regulations and gross negligence. He was informed that a committee would be created to
investigate him and that afterward he would be informed of the management's decision. As a result of further investigation
petitioner was charged with estafa before the Provincial Fiscal of Tuguegarao, while a civil case for collection was brought
against him in the Regional Trial Court of Makati.

The criminal complaint was dismissed by Acting Provincial Fiscal Alejandro de Guzman. Although on appeal to the Ministry of
Justice the then Deputy Minister of Justice, now Associate Justice of this Court, Reynato S. Puno reversed the provincial fiscal
and ordered the filing of an information for estafa against petitioner, the case was eventually dismissed by the Regional Trial
Court of Tuguegarao because of the failure of the prosecution witnesses to appear. The civil suit filed by Central Cement was
likewise dismissed by Branch 60 of the Regional Trial Court of Makati for failure of Central Cement to prove its case against
petitioner Quiambao.

Meanwhile, on March 15, 1985 petitioner demanded reinstatement with backwages. But Central Cement ignored his demand
and instead served him with a notice of termination on the ground of loss of confidence.

Petitioner therefore filed a complaint for illegal dismissal. After hearing, the Labor Arbiter found petitioner to have been illegally
dismissed and ordered respondent Central Cement Marketing Corporation to pay the total amount of P203, 100.00, broken
down as follows:

1. P100,600.00 as three (3) year backwages without qualification and deduction based on P2,500.00 monthly basic pay plus
P350.00 monthly ECOLA;

2. P2,500.00 as separation pay equivalent to one month basic pay;

3. P100,000.00 as moral damages.

Central Cement was also ordered to pay the complainant's counsel ten (10%) percent of the judgment sum as
attorney's fees.
Central Cement appealed to the National Labor Relations Commission. Petitioner moved to dismiss appeal on the ground that
Cement Central had not posted a supersedeas bond as required by Art. 223 of Labor Code, but the NLRC did not act on his
motion. Instead, on October 23, 1989, the NLRC rendered a decision reversing the finding of the Labor Arbiter and dismissing
Quiambao's complaint. On January 17, 1990, Quiambao moved for a reconsideration. On the other hand, private respondent
filed a motion to dismiss the motion for reconsideration on the ground that it was filed out of time, with the consequence that
the judgment of the NLRC, which dismissed the complaint, had become final and executory.

Without waiting for the resolution of the motion, Quiambao filed this petition for certiorari. Petitioner alleges that the NLRC
committed a grave abuse of its discretion by:

1. Disregarding established facts based upon the evidence on record which are material to and decisive to the controversy;

2. Holding that respondent Central Cement Marketing Corporation accorded due process to petitioner before he was terminated
from service; and

3. Disregarding the right of the petitioner herein to security of tenure.

On November 23, 1990 he filed a supplemental petition, alleging that the NLRC acted without jurisdiction and contrary to law
in taking cognizance of the appeal of Central Cement from the decision of the Labor Arbiter despite the fact that Central
Cement had not posted a supersedeas bond.

The petition is well taken.

First. Petitioner is right that the filing of a supersedeas bond is indispensable to the perfection of an appeal in cases which, like
the present one, involve monetary awards and that because Central Cement failed to comply with this requirement, the
decision of the Labor Arbiter, finding Central Cement guilty of the illegal dismissal of petitioner, became final and executory.
Art. 223 expressly 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."

Private respondent contends that Art. 223 of the Labor Code is not self executing and that since the rules implementing it took
effect only on September 5, 1989, after private respondent had appealed to the NLRC on June 19, 1989, and that at the time
it brought its appeal, there was no requirement to give a supersedeas bond as condition for perfecting its appeal. This
contention is without merit. We have already held that Art. 223 is self executing and does
not need any rule to implement it. 1 The filing of supersedeas bond for the perfection of an appeal is mandatory and
jurisdictional. As held in Viron Transit v. NLRC: 2

The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal is clearly limned in the
provision that the appeal by the employer may be perfected only upon the posting of a cash or surety bond. The word "only" makes
it perfectly clear that the lawmakers intended the posting of a cash or surety bond by the employer to be the exclusive means by
which an employer's appeal may be perfected.

It is true that, in some cases, 3 this Court relaxed the requirement of posting supersedeas bond for the perfection of an appeal.
But the decisions in those cases were justified by the fact that there was substantial compliance with the rule, so that on
balance, technical considerations had to give way to considerations of equity and justice. 4 In the case at bar, no similar
justifications exist excusing Central Cement's failure to comply with the rule on mandatory posting of supersedeas bond.

Thus, in Rada v. NLRC 5 the bond was paid, although belatedly. On the other hand in the case of Blancaflor v. NLRC 6 the
failure to give a bond was in part due to the failure of the Labor Arbiter to state the exact amount of backwages and separation
pay due. There was therefore no basis for determining the amount of the bond to be filed by private respondents therein.
Central Cement's only excuse in this case for not complying with the rule is that no supersedeas band was required to be
posted when it appealed on June 19, 1989. As already stated, however, Art. 223 is self executing.

In Your Bus Line v. NLRC 7 the petitioner was excused for its failure to give the bond because it was misled by the notice of the
decision which, while stating the requirements for perfecting an appeal, did not mention that a bond must be filed. The lawyer
for petitioner relied on such notice, and this Court, considering this circumstance as an excusable mistake, allowed petitioner
to file the bond and appeal from the decision of the Labor Arbiter. No basis for excusing private respondent's failure to post a
bond, similar to the defective notice in that case, has been called to our attention.

The consequence of private respondent's failure to comply with the mandatory requirement for the perfection of the appeal
was to render the decision of the Labor Arbiter final and executory, and to place it beyond the power of the NLRC to review
and, even more so, to reverse. The record shows that petitioner objected to the appellate jurisdiction of the NLRC but the
NLRC was heedless, as it ignored petitioner's motion for the dismissal of the appeal. The NLRC thus acted without jurisdiction
in reversing the decision of the Labor Arbiter in favor of petitioner.
Second. Petitioner filed a motion for reconsideration of the decision of the NLRC. Although his motion was not filed within ten
(10) calendar days as provided by Rule VII, $14 of the NLRC Rules of Procedure, for which reason private respondent filed a
motion to dismiss, petitioner's failure to file his motion within the reglementary period was of no consequence as the judgment
of the NLRC, which he sought to reconsider, is anyway a nullity. 8 The requirement for a motion for reconsideration, as a
condition for the filing of a petition for certiorari, does not apply where the decision sought to be annulled is a nullity. 9

Third. Notwithstanding the foregoing conclusions, we have taken pains to consider the merits of this case. We hold that the
decision of the NLRC, finding petitioner to have been dismissed, for cause has no basis in the evidence.

It is noteworthy that, like the Labor Arbiter, the NLRC found that private respondent Central Cement failed to substantiate its
allegations that petitioner was guilty of violating company rules and regulations, extending credit to customers beyond the
allowable limits and poor sales performance. The only reason why the NLRC upheld petitioner's dismissal was because of the
filing of criminal charges for estafa against petitioner. The NLRC considered this circumstance as justifying private
respondent's loss of trust and confidence in petitioner. To be sure, the then Deputy Minister of Justice found probable cause
against petitioner and directed the filing of an information against him in court. The fact, however, is that the case was
subsequently dismissed by the RTC of Tuguegarao for failure of the prosecution to prosecute.

On the other hand, the civil suit for collection was dismissed by the RTC of Makati for failure of private respondent to prove its
case. The filing of these cases, therefore, cannot support the private respondent's claim of loss of trust and confidence in
petitioner.

This case is to be distinguished from those cases in which it was held that the acquittal of the employee in the criminal case
was not a bar to his dismissal on the ground of loss of confidence. 10 The rulings in those cases were based on findings that
the evidence in the criminal case was not sufficient to satisfy the requirement of proof beyond reasonable doubt but otherwise
adequate to support a finding that there was substantial evidence that the employee was guilty. In contrast, in the case at bar,
there is entire want of evidence to justify the dismissal of the petitioner. The NLRC merely relied on the fact that the Ministry of
Justice found petitioner probably guilty of estafa. In fact, the NLRC found that the charges against him had not been
substantiated.

Moreover there was, in this case, no investigation by the private respondent. There was only a financial and performance audit
conducted.. The alleged "state of disarray and chaos" in the Tuguegarao Branch of the company had not been shown to have
been caused by petitioner. Petitioner was served with a notice of indefinite preventive suspension on the ground that he
violated company rules and regulations, extended credit to customers beyond the limit and neglected his duties. But petitioner
was not informed of these charges nor given the chance to be heard. On top of this, the NLRC found no evidence
substantiating the charges.

Nor is there evidence that he misappropriated funds of the company or extorted money from customers, as charged. As
already stated, private respondent simply relied on the outcome of the preliminary investigation and the subsequent filing of
the criminal case as basis for the dismissal of petitioner on this ground. That case was eventually dismissed by the RTC of
Tuguegarao for failure of prosecution witnesses to testify, as was the civil case brought in the RTC of Makati, which found that
it was not petitioner Quiambao but the company's cashier, Antonio Kho, who had misappropriated the money.

With the dismissal of both the criminal and civil cases and without any company investigation conducted to establish
petitioner's culpability, private respondent's claim of loss of confidence became untenable. It was grave abuse of discretion for
the NLRC to uphold petitioner's dismissal.

WHEREFORE, the petition is GRANTED, the decision of the NLRC is SET ASIDE and the decision of the Labor Arbiter is
REINSTATED.

SO ORDERED.

Regalado, Romero and Puno, JJ., concur.

Footnotes
1 Aquino v. NLRC, 226 SCRA 76 (1993).
2 207 SCRA 339 (1992).
3 Rada v. NLRC, 205 SCRA 69 (1992); Blancaflor v. Court of Appeals, 218 SCRA 366 (1993); Your Bus Lines, et al. v. NLRC, SCRA 169 (1990).
4 Cabalan Pastulan Negrito Labor Association v. NLRC, 241 SCRA 643 (1995).
5 Supra, note 3.
6 Supra, note 3.
7 Supra, note 3.
8 National Investment and Development Corp. v. CA, 180 SCRA 164 (1989); cf. Planas v. CIR, 112 Phil. 377 (1961).
9 Aquino v. NLRC, 226 SCRA 76 (1993); Saldaña v. CA, 190 SCRA 396 (1990).
10 Ocean Terminal Services v. NLRC, 197 SCRA 491 (1991); Mercury Drug Corp. v. NLRC, 177 SCRA 580 (1989); San Miguel Corporation v. NLRC, 128 SCRA 181
(1984); Dole Phils., Inc. v. NLRC, 123 SCRA 673 (1983).
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 149578            April 10, 2003

EVELYN TOLOSA, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, QWANA KAIUN (through its resident-agent, FUMIO NAKAGAWA), ASIA
BULK TRANSPORT PHILS. INC., PEDRO GARATE and MARIO ASIS, respondents.

PANGANIBAN, J.:

As a rule, labor arbiters and the National Labor Relations Commission have no power or authority to grant reliefs from claims
that do not arise from employer-employee relations. They have no jurisdiction over torts that have no reasonable causal
connection to any of the claims provided for in the Labor Code, other labor statutes, or collective bargaining agreements.

The Case

The Petition for Review before us assails the April 18, 2001 Decision 1 of the Court of Appeals (CA) in CA-GR SP No. 57660,
as well as the April 17, 2001 CA Resolution 2 denying petitioner's Motion for Reconsideration. The dispositive portion of the
challenged Decision reads as follows:

"WHEREFORE, premises considered, the instant petition for certiorari is hereby DENIED and accordingly
DISMISSED, without prejudice to the right of herein petitioner to file a suit before the proper court, if she so desires.
No pronouncement as to costs."3

The Facts

The appellate court narrated the facts of the case in this manner:

"Evelyn Tolosa (hereafter EVELYN), was the widow of Captain Virgilio Tolosa (hereafter CAPT. TOLOSA) who was
hired by Qwana-Kaiun, through its manning agent, Asia Bulk Transport Phils. Inc., (ASIA BULK for brevity), to be the
master of the Vessel named M/V Lady Dona. CAPT. TOLOSA had a monthly compensation of US$1700, plus
US$400.00 monthly overtime allowance. His contract officially began on November 1, 1992, as supported by his
contract of employment when he assumed command of the vessel in Yokohama, Japan. The vessel departed for
Long Beach California, passing by Hawaii in the middle of the voyage. At the time of embarkation, CAPT. TOLOSA
was allegedly shown to be in good health.

"During 'channeling activities' upon the vessel's departure from Yokohama sometime on November 6, 1992, CAPT.
TOLOSA was drenched with rainwater. The following day, November 7, 1992, he had a slight fever and in the
succeeding twelve (12) days, his health rapidly deteriorated resulting in his death on November 18, 1992.

"According to Pedro Garate, Chief Mate of the Vessel, in his statement submitted to the U.S. Coast Guard on
November 23, 1992 upon arrival in Long Beach, California CAPT. TOLOSA experienced high fever between
November 11-15, 1992 and suffered from loose bowel movement (LBM) beginning November 9, 1992. By November
11, 1992, his temperature was 39.5 although his LBM had 'slightly' stopped. The next day, his temperature rose to
39.8 and had lost his appetite. In the evening of that day, November 13, 1992, he slipped in the toilet and suffered
scratches at the back of his waist. First aid was applied and CAPT. TOLOSA was henceforth confined to his quarters
with an able seaman to watch him 24 hours a day until November 15, 1992, when his conditioned worsened.

"On the same day, November 15, 1992, the Chief Engineer initiated the move and contacted ASIA BULK which left
CAPT. TOLOSA's fate in the hands of Pedro Garate and Mario Asis, Second Mate of the same vessel who was in-
charge of the primary medical care of its officers and crew. Contact with the U.S. Coast Guard in Honolulu, Hawaii
(USCGHH) was likewise initiated to seek medical advice.

"On November 17, 1992, CAPT. TOLOSA was 'losing resistance' and his 'condition was getting serious.' At 2215
GMT, a telex was sent to ASIA BULK requesting for the immediate evacuation of CAPT. TOLOSA and thereafter an
airlift was set on November 19, 1992. However, on November 18, 1992, at 0753 GMT, CAPT. TOLOSA was officially
recorded as having breathed his last.
 "Because of the death of CAPT. TOLOSA, his wife, EVELYN, as petitioner, filed a Complaint/Position Paper before
the POEA (POEA Case No. 93-06-1080) against Qwana-Kaiun, thru its resident-agent, Mr. Fumio Nakagawa, ASIA
BULK, Pedro Garate and Mario Asis, as respondents.

"After initial hearings and submissions of pleadings, the case was however transferred to the Department of Labor
and Employment, National Labor Relations Commission (NLRC), when the amendatory legislation expanding its
jurisdiction, and removing overseas employment related claims from the ambit of POEA jurisdiction. The case was
then raffled to Labor Arbiter, Vladimir Sampang.

x x x           x x x           x x x

"After considering the pleadings and evidences, on July 8, 1997, the Labor Arbiter Vladimir P. L. Sampang, in
conformity with petitioner's plea to hold respondents solidarily liable, granted all the damages, (plus legal interest), as
prayed for by the petitioner. The dispositive portion of his Decision reads:

'WHEREFORE, premises considered, the respondents are hereby ordered to jointly and solidarily pay
complainants the following:

1. US$176,400.00 (US$2,100.00 x 12 months x 7 years) or P4,586,400.00 (at P26.00 per US$1.00) by way
of lost income;

2. interest at the legal rate of six percent (6%) per annum or P1,238,328.00 (from November 1992 to May
1997 or 4 ½ years);

3. moral damages of P200,000.00;

4. exemplary damages of P100,000.00; and

5. 10% of the total award, or P612,472.80, as attorney's fees.'

x x x           x x x           x x x

"On appeal, private respondents raised before the National Labor Relations Commission (NLRC) the following
grounds:

(a) the action before the Arbiter, as he himself concedes, is a complaint based on torts due to negligence. It
is the regular courts of law which have jurisdiction over the action;

(b) Labor Arbiters have jurisdiction over claims for damages arising from employer-employee relationship
(Art. 217, Section (a) (3));

(c) In this case, gross negligence is imputed to respondents Garate and Asis, who have no employer-
employee relationship with the late Capt. Virgilio Tolosa;

(d) The labor arbiter has no jurisdiction over the controversy;

x x x           x x x           x x x

"Despite other peripheral issues raised by the parties in their respective pleadings, the NLRC on September 10,
1998, vacated the appealed decision dated July 8, 1997 of the Labor Arbiter and dismissed petitioner's case for lack
of jurisdiction over the subject matter of the action pursuant to the provisions of the Labor Code, as amended." 4
(Citations omitted)

Ruling of the Court of Appeals

Sustaining the NLRC, the CA ruled that the labor commission had no jurisdiction over the subject matter of the action filed by
petitioner. Her cause did not arise from an employer-employee relation, but from a quasi delict or tort. Further, there is no
reasonable causal connection between her suit for damages and her claim under Article 217 (a)(4) of the Labor Code, which
allows an award of damages incident to an employer-employee relation.

Hence, this Petition.5

Issues
Petitioner raises the following issues for our consideration:

"I

"Whether or not the NLRC has jurisdiction over the case.

"II

"Whether or not Evelyn is entitled to the monetary awards granted by the labor arbiter."6

After reviewing petitioner's Memorandum, we find that we are specifically being asked to determine 1) whether the labor
arbiter and the NLRC had jurisdiction over petitioner's action, and 2) whether the monetary award granted by the labor arbiter
has already reached finality.

The Court's Ruling

The Petition has no merit.

First Issue:
Jurisdiction over the Action

Petitioner argues that her cause of action is not predicated on a quasi delict or tort, but on the failure of private respondents --
as employers of her husband (Captain Tolosa) -- to provide him with timely, adequate and competent medical services under
Article 161 of the Labor Code:

"ART 161. Assistance of employer. -- It shall be the duty of any employer to provide all the necessary assistance to
ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick employee in
case of emergency."

Likewise, she contends that Article 217 (a) (4)7 of the Labor Code vests labor arbiters and the NLRC with jurisdiction to award
all kinds of damages in cases arising from employer-employee relations.

Petitioner also alleges that the "reasonable causal connection" rule should be applied in her favor. Citing San Miguel
Corporation v. Etcuban,8 she insists that a reasonable causal connection between the claim asserted and the employer-
employee relation confers jurisdiction upon labor tribunals. She adds that she has satisfied the required conditions: 1) the
dispute arose from an employer-employee relation, considering that the claim was for damages based on the failure of private
respondents to comply with their obligation under Article 161 of the Labor Code; and 2) the dispute can be resolved by
reference to the Labor Code, because the material issue is whether private respondents complied with their legal obligation to
provide timely, adequate and competent medical services to guarantee Captain Tolosa's occupational safety.9

We disagree. We affirm the CA's ruling that the NLRC and the labor arbiter had no jurisdiction over petitioner's claim for
damages, because that ruling was based on a quasi delict or tort per Article 2176 of the Civil Code.10

Time and time again, we have held that the allegations in the complaint determine the nature of the action and, consequently,
the jurisdiction of the courts.11 After carefully examining the complaint/position paper of petitioner, we are convinced that the
allegations therein are in the nature of an action based on a quasi delict or tort. It is evident that she sued Pedro Garate and
Mario Asis for gross negligence.

Petitioner's complaint/position paper refers to and extensively discusses the negligent acts of shipmates Garate and Asis, who
had no employer-employee relation with Captain Tolosa. Specifically, the paper alleges the following tortious acts:

"x x x [R]espondent Asis was the medical officer of the Vessel, who failed to regularly monitor Capt. Tolosa's
condition, and who needed the USCG to prod him to take the latter's vital signs. In fact, he failed to keep a medical
record, like a patient's card or folder, of Capt. Tolosa's illness."12

"Respondents, however, failed Capt. Tolosa because Garate never initiated actions to save him. x x x In fact, Garate
rarely checked personally on Capt. Tolosa's condition, to wit:"13

"x x x Noticeably, the History (Annex "D") fails to mention any instance when Garate consulted the other officers,
much less Capt. Tolosa, regarding the possibility of deviation. To save Capt. Tolosa's life was surely a just cause for
the change in course, which the other officers would have concurred in had they been consulted by respondent
Garate – which he grossly neglected to do.
 "Garate's poor judgement, since he was the officer effectively in command of the vessel, prevented him from
undertaking these emergency measures, the neglect of which resulted in Capt. Tolosa's untimely demise."14

The labor arbiter himself classified petitioner's case as "a complaint for damages, blacklisting and watchlisting (pending
inquiry) for gross negligence resulting in the death of complainant's husband, Capt. Virgilio Tolosa."15

We stress that the case does not involve the adjudication of a labor dispute, but the recovery of damages based on a quasi
delict. The jurisdiction of labor tribunals is limited to disputes arising from employer-employee relations, as we ruled in Georg
Grotjahn GMBH & Co. v. Isnani:16

"Not every dispute between an employer and employee involves matters that only labor arbiters and the NLRC can
resolve in the exercise of their adjudicatory or quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC
under Article 217 of the Labor Code is limited to disputes arising from an employer-employee relationship which can
only be resolved by reference to the Labor Code, other labor statutes, or their collective bargaining agreement."17

The pivotal question is whether the Labor Code has any relevance to the relief sought by petitioner. From her paper, it is
evident that the primary reliefs she seeks are as follows: (a) loss of earning capacity denominated therein as "actual damages"
or "lost income" and (b) blacklisting. The loss she claims does not refer to the actual earnings of the deceased, but to his
earning capacity based on a life expectancy of 65 years. This amount is recoverable if the action is based on a quasi delict as
provided for in Article 2206 of the Civil Code,18 but not in the Labor Code.

While it is true that labor arbiters and the NLRC have jurisdiction to award not only reliefs provided by labor laws, but also
damages governed by the Civil Code, 19 these reliefs must still he based on an action that has a reasonable causal connection
with the Labor Code, other labor statutes, or collective bargaining agreements.20

The central issue is determined essentially from the relief sought in the complaint. In San Miguel Corporation v. NLRC,21 this
Court held:

"It is the character of the principal relief sought that appears essential in this connection. Where such principal relief
is to be granted under labor legislation or a collective bargaining agreement, the case should fall within the
jurisdiction of the Labor Arbiter and the NLRC, even though a claim for damages might be asserted as an incident to
such claim."22

The labor arbiter found private respondents to be grossly negligent. He ruled that Captain Tolosa, who died at age 58, could
expect to live up to 65 years and to have an earning capacity of US$176,400.

It must be noted that a worker's loss of earning capacity and blacklisting are not to be equated with wages, overtime
compensation or separation pay, and other labor benefits that are generally cognized in labor disputes. The loss of earning
capacity is a relief or claim resulting from a quasi delict or a similar cause within the realm of civil law.

"Claims for damages under paragraph 4 of Article 217 must have a reasonable causal connection with any of the claims
provided for in the article in order to be cognizable by the labor arbiter. Only if there is such a connection with the other claims
can the claim for damages be considered as arising from employer-employee relations."23 In the present case, petitioner's
claim for damages is not related to any other claim under Article 217, other labor statutes, or collective bargaining
agreements.

Petitioner cannot anchor her claim for damages to Article 161 of the Labor Code, which does not grant or specify a claim or
relief. This provision is only a safety and health standard under Book IV of the same Code. The enforcement of this labor
standard rests with the labor secretary.24 Thus, claims for an employer's violation thereof are beyond the jurisdiction of the
labor arbiter. In other words, petitioner cannot enforce the labor standard provided for in Article 161 by suing for damages
before the labor arbiter.

It is not the NLRC but the regular courts that have jurisdiction over actions for damages, in which the employer-employee
relation is merely incidental, and in which the cause of action proceeds from a different source of obligation such as a tort. 25
Since petitioner's claim for damages is predicated on a quasi delict or tort that has no reasonable causal connection with any
of the claims provided for in Article 217, other labor statutes, or collective bargaining agreements, jurisdiction over the action
lies with the regular courts26 -- not with the NLRC or the labor arbiters.

Second Issue:
Finality of the Monetary Award

Petitioner contends that the labor arbiter's monetary award has already reached finality, since private respondents were not
able to file a timely appeal before the NLRC.
This argument cannot be passed upon in this appeal, because it was not raised in the tribunals a quo. Well-settled is the rule
that issues not raised below cannot be raised for the first time on appeal. Thus, points of law, theories, and arguments not
brought to the attention of the Court of Appeals need not -- and ordinarily will not -- be considered by this Court. 27 Petitioner's
allegation cannot be accepted by this Court on its face; to do so would be tantamount to a denial of respondents' right to due
process.28

Furthermore, whether respondents were able to appeal on time is a question of fact that cannot be entertained in a petition for
review under Rule 45 of the Rules of Court. In general, the jurisdiction of this Court in cases brought before it from the Court of
Appeals is limited to a review of errors of law allegedly committed by the court a quo.29

WHEREFORE, the Petition is hereby DENIED, and the assailed Decision and Resolution AFFIRMED. Costs against
petitioner.

SO ORDERED.

Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Footnotes

1
Penned by Justice Mercedes Gozo-Dadole, with the concurrence of Justices Fermin A. Martin Jr. (Division
chairman) and Portia Aliño-Hormachuelos (member); rollo, pp. 8-20.
2
Id., p. 22.
3
Id., p. 19.
4
CA Decision, pp. 1-3; id., pp. 8-13.
5
This case was deemed submitted for resolution on September 12, 2002, upon receipt by this Court of the
Memorandum for private respondents, signed by Atty. Dante H. Cortez. Filed earlier on August 9, 2002 was the
Memorandum for petitioner, signed by Attys. Rodelle B. Bolante and Gener C. Sansaet of Sycip Salazar Hernandez
& Gatmaitan.
6
Petitioner's Memorandum dated August 9, 2002, p. 5; rollo, p. 197; original in upper case.
7
Article 217 of the Labor Code as amended reads:
"ART. 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:
Unfair labor practice cases;
Termination disputes;
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;
Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations;
Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts; and
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 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."
8
319 SCRA 704, December 3, 1999.
9
See Petitioner's Memorandum, pp. 8-9; rollo, pp. 200-201.
10
Article 2176 of the Civil Code reads:
 "Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called quasi-delict and is governed by the provisions of this Chapter."
11
Manila Hotel Corp v. National Labor Relations Commission, 343 SCRA 1, October 13, 2000; Citibank, N.A. v.
Court of Appeals, 359 Phil. 719, November 27, 1998; San Miguel Corp. v. National Labor Relations Commission, GR
No. 108001, 325 Phil. 401, March 15, 1996.
12
Complaint/Position Paper dated August 23, 1993, p. 7; CA rollo, p. 47.
13
Id., pp. 7 & 47.
14
Id., pp. 9 & 50.
15
Decision dated July 8, 1997, p. 1; CA rollo, p. 13.
16
235 SCRA 216, August 10, 1994.
17
Id., p. 221, per Puno, J.
18
Article 2202 of the Civil Code reads:
"Art. 2202. In crimes and quasi-delicts, the defendants shall be liable for all damages which are the natural
and probable consequences of the act or omission complained of. It is not necessary that such damages
have been foreseen or could have reasonably been foreseen by the defendant.
19
Bañez v. Valdevilla, 331 SCRA 584, May 9, 2000.
20
Georg Grotjahn GMBH & Co. v. Isnani, supra; San Miguel Corporation v. Etcuban, supra.
21
161 SCRA 719, May 31, 1988.
22
Id., p. 730, per Feliciano, J.
23
Dai-Chi Electronics Manufacturing Corp. v. Villarama Jr., 238 SCRA 267, November 21, 1994, per Quiason, J.
24
Article 162 of the Labor Code as amended provides:
"ART. 162. SAFETY AND HEALTH STANDARDS
"The Secretary of Labor shall, by appropriate orders, set and enforce mandatory occupational safety and
health standards to eliminate or reduce occupational safety and health hazards in all workplaces and
institute new, and update existing, programs to ensure safe and healthful working conditions in all places of
employment."
25
Bañez v. Valdevilla, supra.
26
Georg Grotjahn GMBH & Co. v. Isnani, supra; San Miguel Corporation v. Etcuban, supra.
27
Hufana v. Genato, GR No. 141209, 365 SCRA 384, September 17, 2001; Mendoza v. Court of Appeals, GR No.
116216, 274 SCRA 527, June 20, 1997.
28
Mendoza v. Court of Appeals, supra.
29
Ibid.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 98108 September 3, 1993

ROMAN P. AQUINO, petitioner,

vs.
THE NATIONAL LABOR RELATIONS COMMISSION, FIRST DIVISION & ROBLETT INDUSTRIAL CONSTRUCTION, INC.,
respondents.

Roberto B. Romanillos for petitioner.

Arturo S. Dy for private respondent.

QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court to annul the March 26, 1991 Resolution of the
National Labor Relations Commission (NLRC), which set aside its February 18, 1991 Resolution that dismissed the appeal of
private respondent. The assailed resolution also directed petitioner to file his answer to the private respondent's memorandum
on appeal (Rollo, pp. 101-104).

It appears that petitioner filed before the Labor Arbiter a complaint for illegal dismissal against private respondent (NCR-2-396-
87). He alleged that he was removed from the payroll in January 1987 and was not paid his salary. Private respondent
answered that petitioner had abandoned his work after he was held accountable for advances amounting to P48,921.94.

On May 30, 1990, the Labor Arbiter rendered a decision, finding petitioner's dismissal as illegal. The dispositive portion of the
decision reads as follows:

WHEREFORE, judgment is hereby rendered in this case, declaring respondent Roblett Industrial Construction, Inc. guilty of illegal
dismissal and ordering it to reinstate complainant Roman P. Aquino to his former or equivalent position, with full backwages. It is
therefore ordered to pay complainant his backwages for three (3) years, without any deduction or qualification in the amount of
Eighty thousand Eight Hundred Twenty Pesos (P80,820.00) (Rollo, p. 17).

The counsel for private respondent received a copy of the above decision on June 13, 1990. The last day to appeal therefore
was on June 23, 1990, which fell on a Saturday. The counsel, however, filed the appeal on Monday, June 25, 1990, two days
beyond the reglementary period. On July 4, 1990, petitioner filed a motion to dismiss the appeal and for the issuance of a writ
of execution based on the following grounds:

(1) The period to appeal had already lapsed; and

(2) Private respondent did not post the surety or cash bond required by Section 223 of the Labor Code, as amended by R.A.
No. 6715.

Finding that the Labor Arbiter did not abuse his discretion in rendering his decision and that private respondent failed to file a
cash or surety bond to perfect its appeal, the NLRC, dismissed the appeal in a Resolution dated February 18, 1991. However,
upon motion of private respondent, the NLRC set aside the aforementioned resolution in its March 26, 1991 Resolution.

The March 26 Resolution of the NLRC justified the reversal of its February 18 Resolution on the following grounds:

(1) The memorandum of appeal could not be filed on June 23, 1990, because the NLRC has no office on Saturdays. Hence,
the filing of the memorandum of appeal on July 25, 1990 was timely; and

(2) When the appeal was filed on July 25, 1990, the Rules implementing R.A. No. 6715 on the requirement of an appeal bond
to perfect an appeal, had not been promulgated. While the Interim Rules promulgated by the old NLRC required the filing of
appeal bonds, the new NLRC created under R.A. No. 6715 was authorized to promulgate the implementing rules and
therefore it was not bound to follow said Interim Rules.

On April 22, 1990, petitioner, alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
NLRC, filed the instant petition for certiorari under Rule 65 of the Revised Rules of Court. The NLRC, aside from justifying its
reversal of the February 18 Resolution, questioned the propriety of the filing of the petition for certiorari.

The procedural issues to be resolved are:

Whether the special civil action for certiorari can be availed of: (1) to review an interlocutory order; (2) without first filing a
motion for reconsideration in the NLRC; and (3) when there exists a plain, speedy and adequate remedy, that of filing an
answer to the memorandum on appeal.

The substantive issues to be resolved are:

(1) Whether or not a memorandum on appeal due on a Saturday can be filed timely on the following Monday; and

(2) Whether or not the filing of a bond to perfect an appeal, under Art. 223 of the Labor Code as amended by R.A. No. 6715,
was required for appeals before the adoption of the NLRC Rules implementing said amendatory law.

On the procedural issues raised, we hold that where an interlocutory order was allegedly issued with grave abuse of discretion
amounting to lack or excess of jurisdiction, such order may be questioned before this Court on a petition for certiorari under
Rule 65 of the Revised Rules of Court. To delay the review of the order until the appeal from the decision of the main case,
would not afford the party adversely affected by the said order a speedy, plain and adequate remedy (Mendoza v. Court of
Appeals, 201 SCRA 343 [1991]).

Regarding the failure of petitioner to file a motion for reconsideration before the NLRC, such failure may be excused where the
order sought to be reviewed is a patent nullity (Saldana v. Court of Appeals, 190 SCRA 396 [1990]).

The governing law on the question of the timeliness of the appeal of private respondent is Article 223 of the Labor Code,
which states that an appeal from the decision of the Labor Arbiter must be made within ten calendar days from receipt of such
decisions. Said provision of the Labor Code, however, is silent with regard to cases when the ten-day reglementary period
within which to perfect an appeal falls on a Saturday, which is not a holiday.

On January 9, 1989, in SM Agri and General Machineries v. National Labor Relations Commission, 169 SCRA 20 [1989], the
Court held that where the tenth day to appeal to the NLRC falls on a Saturday, which is not a holiday, the appeal must be
perfected on that day and not on the next succeeding business day. The Court noted that Saturday is ordinarily a business
day.

On April 18, 1989, this Court reversed SM Agri and General Machineries in Pacaña v. National Labor Relations Commission,
172 SCRA 473 [1989], wherein it held that when the reglementary period of ten calendar days prescribed by Article 223 of the
Labor Code falls on a Saturday and the offices of the NLRC are closed, the appeal is seasonably filed on the following
Monday, being the first day the appeal can be filed after the lapse of the reglementary period. Pacaña was followed in
Veterans Philippine Scout Security Agency v. National Labor Relations Commission, 174 SCRA 347 [1989], which held that:
"[w]hen the deadline for the filing of an appeal falls on a Saturday, Sunday or holiday, and the government office concerned is
closed on such a day, the appeal may be filed on the next working day. In this case, the next working day was Monday, May
25, 1986. The parties had until May 25, 1986 to bring an appeal to the National Labor Relations Commission."

On August 5, 1991, in Imperial Victory Shipping Agency v. National Labor Relations Commission , 200 SCRA 178 (1991), the
Court mentioned that as held in SM Agri and General Machineries, Saturday, unless legally declared a holiday, is considered
a business day and therefore, if the last day to appeal falls on a Saturday, the act must be done on that day. Again, on
October 28, 1991, in Lucero v. National Labor Relations Commission, 203 SCRA 218 [1991], the Court cited SM Agri and
General Machineries as holding that Saturday is a business day.

On January 14, 1992, the NLRC, amended its Rules of Procedure to conform with the decision of this Court in Pacaña. As
amended, Section 1, Rule VI of the Rules of Procedure of the NLRC now specifies that if the tenth day to perfect an appeal
from the decision of the Labor Arbiter to the NLRC falls on a Saturday, the appeal shall be made on the next working day.

To remove any doubts that may possibly arise as a result of the obiter dictum in the cases decided after Pacaña, we hereby
reiterate the Pacaña ruling and uphold the amendment to Section 1 of Rule VII of the Rules of Procedure of the NLRC
enforced on January 14, 1992 on the principle that the law does not require the performance of an impossible act
(impossibilum nulla obligatio est).
We hold that the filing of the appeal by private respondent on June 25, 1990 was timely.

However, while the appeal to the NLRC was filed on time, it must be dismissed for failure of the appellant to file the cash or
surety bond required under Article 223 of the Labor Code.

The decision of the Labor Arbiter in this case included a monetary award, i.e., award for 3-year back wages amounting to
P80,820.00. Therefore, to perfect its appeal before the NLRC, private respondent should have posted a cash or surety bond
equivalent to the money judgment in accordance with Article 223 of the Labor Code. In justification of the non-posting of the
bond, both respondents argued that the NLRC issued the rules implementing R.A.
No. 6715 only on August 31, 1990, which took effect on October 9, 1990. They claimed that the requirement of R.A. No. 6715
on the filing of a bond was not yet in force when private respondent filed its appeal on June 25, 1990. The NLRC further
alleged that it was not bound to follow the Interim Rules promulgated by its predecessor because it was the one created under
R.A.
No. 6715 and authorized to promulgate the implementing rules.

We agree with the Solicitor General that the provisions of Article 223 of the Labor Code, as amended by R.A. No. 6715,
requiring the posting of cash or surety bond in appeals from decisions of Labor Arbiter granting monetary awards, are self-
executing and do not need any administrative rules to implement them.

The appeal made by private respondent, not having been perfected on time for failure to file the appeal bond, the decision of
the Labor Arbiter became final and executory (Filcon Manufacturing Corporation v. NLRC, 199 SCRA 814 [1991]).

WHEREFORE, the petition is GRANTED. The March 26, 1991 Resolution of the NLRC complained of is REVERSED and its
February 18, 1992 Resolution is REINSTATED, with costs, against private respondent.

SO ORDERED.

Cruz, Griño-Aquino, Davide Jr. and Bellosillo, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 81490 August 31, 1988

HAGONOY WATER DISTRICT represented by its General Manager CELESTINO S. VENGCO, petitioner,
vs.
THE HON. NATIONAL LABOR RELATIONS COMMISSION, EXECUTIVE LABOR ARBITER VLADIMIR P.L. SAMPANG,
DEPUTY SHERIFF JOSE A. CRUZ and DANTE VILLANUEVA, respondents.

Mario S. Jugco for petitioner.

Renato C. Guevara for private respondent Villanueva.

FELICIANO, J.:

The present petition for certiorari seeks to annul and set aside: a) the decision of the Labor Arbiter dated 17 March 1987 in
NLRC Case No. RAB-III-8-2354-85, entitled "Dante Villanueva versus LWA-Hagonoy Waterworks District/Miguel Santos;" and
b) the Resolution of the National Labor Relations Commission dated 20 August 1987 affirming the mentioned decision.

Private respondent Dante Villanueva was employed as service foreman by petitioner Hagonoy Water District ("Hagonoy") from
3 January 1977 until 16 May 1985, when he was indefinitely suspended and thereafter dismissed on 12 July 1985 for
abandonment of work and conflict of interest.

On 14 August 1985, private respondent filed a complaint for illegal dismissal, illegal suspension and underpayment of wages
and emergency cost of living allowance against petitioner Hagonoy with the then Ministry of Labor and Employment, Regional
Arbitration Branch III, San Fernando, Pampanga.

Petitioner immediately moved for outright dismissal of the complaint on the ground of lack of jurisdiction. Being a government
entity, petitioner claimed, its personnel are governed by the provisions of the Civil Service Law, not by the Labor Code, and
protests concerning the lawfulness of dismissals from the service fall within the jurisdiction of the Civil Service Commission,
not the Ministry of Labor and Employment. Petitioner cited Resolution No. 1540 of the Social Security Commission cancelling
petitioner's compulsory coverage from the system effective 16 May 1979 "considering the rulings that local water districts are
instrumentalities owned and controlled by the government and that their officers and employees are government employees."
In opposing the motion, private respondent Villanueva contended that local water districts, like petitioner Hagonoy, though
quasi-public corporations, are in the nature of private corporations since they perform proprietary functions for the
government.

The Labor Arbiter proceeded to hear and try the case and, on 17 March 1986, rendered a Decision in favor of the private
respondent and against petitioner Hagonoy. The dispositive part of the decision read:

WHEREFORE, premises considered, respondents are hereby ordered to reinstate petitioner immediately to his former position as
Service Foreman, without loss of seniority rights and privileges, with full backwages, including all benefits provided by law, from the
date he was terminated up to his actual date of reinstatement.

In addition, respondents are hereby ordered to pay the petitioner the amount of P4,927.50 representing the underpayments of
wages from July 1983 to May 16, 1985.

SO ORDERED.

On appeal, the National Labor Relations Commission affirmed the decision of the Labor Arbiter in a Resolution dated 20
August 1987.

The petitioner moved for reconsideration, insisting that public respondents had no jurisdiction over the case. Meanwhile, a Writ
of Execution was issued by the Labor Arbiter on 16 November 1987. The writ was enforced by garnishing petitioner
Hagonoy's deposits with the Planters Development Bank of Hagonoy.

Petitioner then filed a Motion to Quash the Writ of Execution with Application for Writ of Preliminary Injunction arguing that the
writ was prematurely issued as its motion for reconsideration had not yet been resolved. By Resolution dated 10 December
1987, public respondent Commission denied the application for a preliminary injunction. The motion to quash was similarly
denied by the Commission which directed petitioner to reinstate immediately private respondent and to pay him the amount of
P63,577.75 out of petitioner's garnished deposits.

Hence, the instant petition.

The only question here in whether or not local water districts are government owned or controlled corporations whose
employees are subject to the provisions of the Civil Service Law. The Labor Arbiter asserted jurisdiction over the alleged
illegal dismissal of private respondent Villanueva by relying on Section 25 of Presidential Decree No. 198, known as the
"Provincial Water Utilities Act of 1973" which went into effect on 25 May 1973, and which provides as follows:

Exemption from Civil Service. — The district and its employees, being engaged in a proprietary function, are hereby exempt from
the provisions of the Civil Service Law. Collective Bargaining shall be available only to personnel below supervisory levels:
Provided, however, That the total of all salaries, wages, emoluments, benefits or other compensation paid to all employees in any
month shall not exceed fifty percent (50%) of average net monthly revenue, said net revenue representing income from water sales
and sewerage service charges, lease pro-rata share of debt service and expenses for fuel or energy for pumping during the
preceding fiscal year.

The Labor Arbiter however failed to take into account the provisions of Presidential Decree No. 1479, which went into effect on
11 June 1978. P.D. No. 1479 wiped away Section 25 of P.D. 198 quoted above, and Section 26 of P.D. 198 was renumbered
as Section 25 in the following manner:

Section 26 of the same decree [P.D. 198] is hereby amended to read as Section 25 as follows:

Section 25. Authorization. — The district may exercise all the powers which are expressly granted by this Title or which are
necessarily implied from or incidental to the powers and purposes herein stated. For the purpose of carrying out the objectives of
this Act, a district is hereby granted the power of eminent domain, the exercise thereof shall, however, be subject to review by the
Administration.

Thus, Section 25 of P.D. 198 exempting the employees of water districts from the application of the Civil Service Law was
removed from the statute books.

This is not the first time that officials of the Department of Labor and Employment have taken the position that the Labor
Arbiter here adopted. In Baguio Water District vs. Cresenciano B. Trajano, etc. et al ., 1 the petitioner Water District sought
review of a decision of the Bureau of Labor Relations which affirmed that of a Med-Arbiter calling for a certification election
among the regular rank-and-file employees of the Baguio Water District (BWD). In granting the petition, the Court said:

The Baguio Water District was formed pursuant to Title II-Local Water District Law of P.D. No. 198, as amended, The BWD is by
Sec. 6 of that decree 'a quasi-public corporation performing public service and supplying public wants.

A part of the public respondent's decision rendered in September, 1983, reads in part:

We find the appeal [of the BWD] to be devoid of merit. The records show that the operation and administration of BWD is governed
and regulated by special laws, that is, Presidential Decrees Nos. 198 and 1479 which created local water districts throughout the
country. Section 25 of Presidential Decree (PD) 198 clearly provides that the district and its employees shall be exempt from the
provisions of the Civil Service Law and that its personnel below supervisory level shall have the right to collectively bargain.
Contrary to appellant's claim, said provision has not been amended much more abrogated expressly or impliedly by PD 1479 which
does not make mention of any matter on Civil Service Law or collective bargaining. (Rollo, p. 590.)

We grant the petition for the following reasons:

1. Section 25 of P.D. No. 198 was repealed by Sec. 3 of P.D. No. 1479; Sec. 26 of P.D. No. 198 was amended to read as Sec. 25
by Sec. 4 of P.D. No. 1479. The amendatory decree took effect on June 11, 1978.

xxx xxx xxx

3. The BWD is a corporation created pursuant to a special law — P.D. No. 198, as amended. As such its officers and employees are
part of the Civil Service. (Sec. 1, Art. XII-B, [1973] Constitution; P.D. No. 686.)

The broader question of whether employees of government owned or controlled corporations are governed by the Civil
Service Law and Civil Service Rules and Regulations was addressed by this Court in 1985 in National Housing Corporation
vs. Juco. 2 After a review of constitutional, statutory and case law on the matter, the Court, through Mr. Justice Gutierrez, held:

There should no longer be any question at this time that employees of government-owned or controlled corporations are governed
by the civil service law and civil service rules and regulations.

Section 1. Article XII-B of the [1973] Constitution specifically provides:

 The Civil Service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-
owned or controlled corporation. ...

The 1935 Constitution had a similar provision in its Section 1, Article XII which stated:

A Civil Service embracing all branches and subdivisions of the Government shall be provided by law.

The inclusion of "government-owned or controlled corporations" within the embrace of the civil service shows a deliberate effort of
the framers to plug an earlier loophole which allowed government-owned or controlled corporations to avoid the full consequences
of the all encompassing coverage of the, civil service system. The same explicit intent is shown by the addition of "agency" and
"instrumentality" to branches and subdivisions of the Government. All offices and firms of the government are covered.

The amendments introduced in 1973 are not Idle exercises or meaningless gestures. They carry the strong message that civil
service coverage is broad and all-embracing insofar as employment in the government in any of its governmental. or corporate arms
is concerned.

xxx xxx xxx

Section I of Article XII-B, [1973] Constitution uses the word "every" to modify the phrase "government-owned or controlled
corporation."

"Every" means each one of a group, without exception. It means all possible and all, taken one by one. Of course, our decision in
this case refers to a corporation created as a government-owned or controlled entity. It does not cover cases involving private firms
taken over by the government in foreclosure or similar proceedings. We reserve judgment on these latter cases when the
appropriate controversy is brought to this Court. 3

In Juco, the Court spelled out the law on the issue at bar as such law existed under the 1973 Constitution and the Provisional
Constitution of 1984, 4 until just before the effectivity of the 1987 Constitution. Public respondent Commission, in confirming
the Labor Arbiter's assumption of jurisdiction over this case, apparently relied upon Article IX (B), Section 2 (1) of the 1987
Constitution, which provides that:

[T]he Civil Service embraces ... government owned or controlled corporations with original charters. (Emphasis supplied)

The NLRC took the position that although petitioner Hagonoy is a government owned or controlled corporation, it had no
original charter having been created simply by resolution of a local legislative council. The NLRC concluded that therefore
petitioner Hagonoy fell outside the scope of the civil service.

At the time the dispute in the case at bar arose, and at the time the Labor Arbiter rendered his decision (i.e., 17 March 1986),
there is no question that the applicable law was that spelled out in National Housing Corporation vs. Juco (supra) and Baguio
Water District vs. Cresenciano B. Trajano (supra) and that under such applicable law, the Labor Arbiter had no jurisdiction to
render the decision that he in fact rendered. By the time the public respondent Commission rendered its decision of 20 August
1987 which is here assailed, the 1987 Constitution had already come into effect. 5 There is, nonetheless, no necessity for this
Court at the present time and in the present case to pass upon the question of the effect of the provisions of Article DC (B),
Section 2 (1) of the 1987 Constitution upon the pre-existing statutory and case law. For whatever that effect might be, — and
we will deal with that when an appropriate case comes before the Court — we believe and so hold that the 1987 Constitution
did not operate retrospectively so as to confer jurisdiction upon the Labor Arbiter to render a decision which, under the law
applicable at the time of the rendition of such decision, was clearly outside the scope of competence of the Labor Arbiter.
Thus, the respondent Commission had nothing before it which it could pass upon in the exercise of its appellate jurisdiction.
For it is self-evident that a decision rendered by the Labor Arbiter without jurisdiction over the case is a complete nullity,
vesting no rights and imposing no liabilities.

ACCORDINGLY, the Petition for certiorari is GRANTED. The decision of the Labor Arbiter dated 17 March 1986, and public
respondent Commission's Resolution dated 20 August 1987 and all other Resolutions and Orders issued by the Commission
in this case subsequent thereto, are hereby SET ASIDE. This decision is, however, without prejudice to the right of private
respondent Villanueva to refile, if he so wishes, this complaint in an appropriate forum. No pronouncement as to costs.

SO ORDERED.

Fernan C.J., Gutierrez, Jr., Bidin and Cortes, JJ., concur.

 Footnotes

1 127 SCRA 730 (1984).

2 134 SCRA 172 (1985). See also Alliance of Government Workers, et al. vs. Honorable Minister of Labor and Employment, et al., 125 SCRA 1 (1983).
3 134 SCRA at 176-177, 182.
4 Article I, Section 2.
5 The 1987 Constitution was ratified in a plebiscite and went into effect on 2 February 1987; De Leon et al. v. Esquerra, et. al., 153 SCRA 602 (1987).
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 118069 November 16, 1998

PRODUCERS BANK OF THE PHILIPPINES, (now First Philippine International Bank), petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and PRODUCERS BANK EMPLOYEES ASSOCIATION, respondents.

 ROMERO, J.:

Initially, this action was resolved in petitioner's favor with the dismissal of private respondent's complaint for unfair labor
practice and violation of the CBA against the former by Labor Arbiter Jovencio Mayon. 1 Upon appeal to the National Labor
Relations Commission (NLRC), the decision of the Labor Arbiter was reversed and instead a judgment was rendered in favor
of the private respondent. Dismayed, petitioner is now before us seeking the reversal of the NLRC's decision.

The facts are quite simple.

Prefatorily, at the time the instant controversy started, petitioner was placed by the then Central Bank of the Philippines (now
Bangko Sentral ng Pilipinas) under a conservator for the purpose of protecting its assets. 2 It appears that when the private
respondents sought the implementation of Section I, Article XI of the CBA regarding the retirement plan and Section 4, Article
X thereof, pertaining to uniform allowance, the acting conservator of the petitioner expressed her objection to such plan,
resulting in an impasse between the petitioner bank and the private respondent union. The deadlock continued for at least six
months when the private respondent, to resolve the issue, decided to file a case against the petitioner for unfair labor practice
and for flagrant violation of the CBA provisions.

As stated earlier, the Labor Arbiter dismissed private respondent's complaint, on this premise:

Considering that the Bank is under conservatorship program under which the bank is under the rule of a conservator, the latter is
under no compulsion to implement the resolutions issued by the LMRC. If he finds that the enforcement of the resolutions would not
redound for the best interest of the Bank in accordance with the conservatorship program, he may not be faulted by such inaction or
action.

Undaunted by the initial setback, private respondent union interposed an appeal before the NLRC. The NLRC, after reviewing
the arguments of both parties, reversed the findings of the Labor Arbiter, thus:

Not only is the worker protected by the Labor Code, he is likewise protected by other laws (Civil Code) and social legislations the
source of which is the no less than the Constitution itself. To adhere first to the interest of the company to the prejudice of the
workers can never be allowed or tolerated as the interest of the working masses is the paramount concern of the government.

Consequently, the NLRC ordered the petitioner to implement the provisions of the CBA which were disallowed by the
conservator. 3

The issue need not detain us at length. The NLRC's finding deserves our concurrence.

In a similar case involving the petitioner and the acts of its conservator, 4 we already ruled that:

In the third place, while admittedly, the Central Bank law gives vast and far-reaching powers to the conservator of a bank, it must be
pointed out that such powers must be related to the "(preservation of) the assets of the bank, (the reorganization of) the
management thereof and (the restoration of) its viability." Such powers, enormous and extensive as they are, cannot extend to the
post-facto repudiation of perfected transactions, otherwise they would infringe against the non-impairment clause of the Constitution.
If the legislature itself cannot revoke an existing valid contract, how can it delegate such non-existent powers to the conservator
under Section 28-A of said law?

Obviously, therefore, Section 28-A merely gives the conservator power to revoke contracts that are, under existing law, deemed to
be defective — i.e., void, voidable, unenforceable or rescissible. Hence, the conservator merely takes the place of a bank's board of
directors. What the said board cannot do — such as repudiating a contract validly entered into under the doctrine of implied
authority — the conservator cannot do either. Ineluctably, his power is not unilateral and he cannot simply repudiate valid obligations
of the Bank. His authority would be only to bring court actions to assail such contracts — as he has already done so in the instant
case. A contrary understanding of the law would simply not be permitted by the Constitution. Neither by common sense. To rule
otherwise would be to enable a failing bank to become solvent, at the expense of third parties, by simply getting the conservator to
unilaterally revoke all previous dealings which had one way or another come to be considered unfavorable to the Bank, yielding
nothing to perfected contractual rights nor vested interests of the third parties who had dealt with the Bank.
Prescinding from the rationalization that a conservator cannot rescind a valid and existing contract and that the CBA is the law
between the contracting parties, 5 it is obvious that the conservator had no authority whatsoever to disallow the implementation
of Article XI, Section 1 and Article X, Section 4 of the CBA, especially considering that the ideals of social justice and
protection of labor are guaranteed not only by the Labor Code, but more importantly by the fundamental law of the land.

It bears repeating that apart from the non-impairment clause, what is also well-settled, to the point of being trite, is the
principle that when the conflicting interests of labor and capital are weighed on the scales of social justice, the dominant
influence of the latter must be counter-balanced by the sympathy and compassion the law must accord the under-privileged
worker. 6

Next, petitioner insists that both the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint of the private
respondent, 7 asserting that the issue was cognizable by the voluntary arbitrator pursuant to Article 261 of the Labor Code.

Granting that both the Labor Arbiter and the NLRC indeed had no jurisdiction over the issue, petitioner cannot anymore plead
such procedural flaw under the principle of estoppel. 8 It appears that in the proceedings before the Labor Arbiter, it vigorously
argued its defense and prayed for alternative relief. In fact, in its position paper 9 and reply, 10 the issue concerning the Labor
Arbiter's lack of jurisdiction was not raised by the petitioner. Moreover, in its answer 11 to the memorandum of appeal filed by
the private respondents before the NLRC, petitioner was again silent regarding the issue of jurisdiction on the part of the
NLRC to decide the appeal. It was only when the decision of the NLRC was unfavorable that it raised the issue of jurisdiction.

Petitioner should bear the consequence of its act. It cannot be allowed to profit from its own omission to the damage and
prejudice of the private respondent. As we declared in Ilocos Sur Electric Cooperative, Inc. v. NLRC: 12

. . . . Petitioners did not question the jurisdiction of the Labor Arbiter either in a motion to dismiss or in their answer. In fact,
petitioners participated in the proceedings before the Labor Arbiter, as well as in the NLRC to which they appealed the Labor
Arbiter's decision. It has been consistently held by this Court that while jurisdiction may be assailed at any stage, a party's active
participation in the proceedings before a court without jurisdiction will estop such party from assailing such lack of it. It is an
undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting the
judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.

Finally, petitioner asserts since the employees have retired, as a consequence of which no employee-employer relationship
exists anymore between it and the employees, private respondent no longer had the personality to file the complaint for them.
13

Petitioner's contention in untenable. Retirement results from a voluntary agreement between the employer and the employee
whereby the latter after reaching a certain age agrees to sever his employment with the former. 14 The very essence of
retirement is the termination of the employer-employee relationship.

Hence, the retirement of an employee does not, in itself, affect his employment status especially when it involves all rights and
benefits due to him, since these must be protected as though there had been no interruption of service. It must be borne in
mind that the retirement scheme was part of the employment package and the benefits to be derived therefrom constituted, as
it were, a continuing consideration for services rendered, as well as an effective inducement for remaining with the
corporation. It is intended to help the employee enjoy the remaining years of his life, releasing him from the burden of worrying
for his financial support, and are a form of reward for his loyalty. 15

When the retired employees were requesting that their retirement benefits be granted, they were not pleading for generosity
but were merely demanding that their rights, as embodied in the CBA, be recognized. Thus, when an employee has retired but
his benefits under the law or the CBA have not yet been given, he still retains, for the purpose of prosecuting his claims, the
status of an employee entitled to the protection of the Labor Code, one of which is the protection of the labor union. In Esso
Philippines, Inc. v. Malayang Manggagawa sa Esso (MME), 16 we recognized that while the individual complainants are the
real party m interest in issues involving monetary claims and benefits, the union, however, is not denied its right to sue on
behalf of its members, thus:

We see no legal impediments to considering this particular matter of retirement benefits to be within the ambit of Our consistent
holding that when it comes to individual benefits accruing to members of a union from a favorable final judgment of any court, the
members themselves become the real parties in interest and it is for them, rather than for the union, to accept or reject individually
the fruits of the litigation. In the case at bar, the representations of the MME which may result in prejudice to the interests of any of
its individual members in the final judgment being sought to be executed should yield to the individual decisions of the said
members themselves, who are free to choose whichever position suits their conscience.

WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision of the National Labor Relations
Commission dated August 31, 1994 is AFFIRMED. Costs against petitioner.

SO ORDERED.

Narvasa, C.J., Kapunan, Purisima and Pardo, JJ., concur.

Footnotes

1 Annex "F." Rollo, pp. 102-115.

2 First Philippine International Bank v. Court of Appeals, 252 SCRA 259 (1996).

3 Rollo, NLRC Decision, pp. 142-143.

4 See note 2.

5 Marcopper Mining Corporation v. NLRC, 255 SCRA 322 (1996).

6 City Fair Corporation v. NLRC, 243 SCRA 572 (1995); Philippine Telegraph and Telephone Corporation v. NLRC, 183 SCRA 451
(1990).

7 Rollo, pp. 9-10.

8 Southern Cotabato Development and Construction, Inc. v. NLRC, 280 SCRA 854 (1997).

9 Rollo, pp. 29-35.

10 Rollo, pp. 93-100.

11 Rollo, pp. 126-131.

12 241 SCRA 36 (1995).

13 Rollo, pp. 17-19.

14 Soberano v. Secretary of Labor, 99 SCRA 549 (1980).

15 Laginlin v. WCC, 159 SCRA 91 (1988).

16 75 SCRA 77 (1977).
 CASES IN LABOR II
(Labor Relations)

Submitted by:

IVAN CORNELIUS V. CO
Law III-A

Submitted to:

ATTY. EDUARDO M. POLISTICO