1. Phil.

V CA

G.R. No. 168612 December 10, 2014

PHILIPPINE ELECTRIC CORPORATION (PHILEC), Petitioner,

vs.
COURT OF APPEALS, NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB),
Department of Labor and Employment, RAMON T. JIMENEZ, in his capacity as
Voluntary Arbitrator, PHILEC WORKERS' UNION (PWU), ELEODORO V. LIPIO, and
EMERLITO C. IGNACIO, Respondents.

DECISION

LEONEN, J.:

An appeal to reverse or modify a Voluntary Arbitrator's award or decision must be filed

before the Court of Appeals within 10 calendar days from receipt of the award or decision.

This is a petition1 for review on certiorari of the Court of Appeals decision 2 dated May 25,
2004, dismissing the Philippine Electric Corporations petition for certiorari for lack of merit.
Philippine Electric Corporation (PHILEC) is a domestic corporation "engaged in the
manufacture and repairs of high voltage transformers." 3 Among its rank-and-file employees
were Eleodoro V. Lipio (Lipio) and Emerlito C. Ignacio, Sr. (Ignacio, Sr.), former members
of the PHILEC Workers Union (PWU).4 PWU is a legitimate labor organization and the
exclusive bargaining representative of PHILECs rank-and-file employees.5

From June 1, 1989 to May 31, 1997, PHILEC and its rank-and-file employees were governed
by collective bargaining agreements providing for the following step increases in an
employees basic salary in case of promotion:6

Rank-and-File (PWU)
Pay
Grade June 1, 1989 to June 1, 1992 to June 1, 1994 to
May 31, 1992 May 31, 1994 May 31, 1997
I II 50 60 65
II III 60 70 78
III IV 70 80 95
IV V 80 110 120
V- VI 100 140 150
VI VII 120 170 195
VII VIII 170 230 255
VIII IX 220 290 340
IX X 260 350 455
On August 18, 1997 and with the previous collective bargaining agreements already
expired, PHILEC selected Lipio for promotion from Machinist under Pay Grade VIII 7 to
Foreman I under Pay Grade B.8 PHILEC served Lipio a memorandum,9 instructing him to
undergo training for the position of Foreman I beginning on August 25, 1997. PHILEC
undertook to pay Lipio training allowance as provided in the memorandum:

This will confirm your selection and that you will undergo training for the position of
Foreman I (PG B) of the Tank Finishing Section, Distribution Transformer Manufacturing and
Repair effective August 25, 1997.

You will be trained as a Foreman I,and shall receive the following training allowance until
you have completed the training/observation period which shall not exceed four (4) months.

First Month - - - - - 350.00

Second month - - - - - 815.00

Third month - - - - - 815.00

Fourth month - - - - - 815.00

Please be guided accordingly.10

Ignacio, Sr., then DT-Assembler with Pay Grade VII,11 was likewise selected for training for
the position of Foreman I.12 On August 21, 1997, PHILEC served Ignacio, Sr. a
memorandum,13 instructing him to undergo training with the following schedule of
allowance:

This will confirm your selection and that you will undergo training for the position of
Foreman I (PG B) of the Assembly Section, Distribution Transformer Manufacturing and
Repair effective

August 25, 1997.

You will be trained as a Foreman I,and shall receive the following training allowance until
you have completed the training/observation period which shall not exceed four (4) months.

First Month - - - - - 255.00

Second month - - - - - 605.00

Third month - - - - - 1,070.00

Fourth month - - - - - 1,070.00

Please be guided accordingly.14

On September 17, 1997, PHILEC and PWU entered into a new collective bargaining
agreement, effective retroactively on June 1, 1997 and expiring on May 31, 1999. 15 Under
Article X, Section 4 of the June 1, 1997 collective bargaining agreement, a rank-and-file
employee promoted shall be entitled to the following step increases in his or her basic
salary:16

Section 4. STEP INCREASES. [Philippine Electric Corporation] shall adopt the following step
increases on the basic salary in case of promotion effective June 1, 1997. Such increases
shall be based on the scale below or upon the minimum of the new pay grade to which the
employee is promoted, whichever is higher:

Pay Grade Step Increase

I - II 80.00
II - III 105.00
III - IV 136.00
IV - V 175.00
V - VI 224.00
VI - VII 285.00
VII - VIII 361.00
VIII - IX 456.00
IX - X 575.00
To be promoted, a rank-and-file employee shall undergo training or observation and shall
receive training allowance as provided in Article IX, Section 1(f) of the June 1, 1997
collective bargaining agreement:17

Section 1. JOB POSTING AND BIDDING:

....

(f) Allowance for employees under Training or Observation shall be on a graduated

basis as follows:

For the first month of training, the allowance should be equivalent to one step
increase of the next higher grade. Every month thereafter the corresponding
increase shall be equivalent to the next higher grade until the allowance for the
grade applied for is attained.

As an example, if a Grade I employee qualifies for a Grade III position, he will

receive the training allowance for Grade I to Grade II for the first month. On the
second month, he will receive the training allowance for Grade I to Grade II plus the
allowance for Grade II to Grade III. He will then continue to receive this amount until
he finishes his training or observation period. 18

Claiming that the schedule of training allowance stated in the memoranda served on Lipio
and Ignacio,Sr. did not conform to Article X, Section 4 of the June 1, 1997 collective
bargaining agreement, PWU submitted the grievance to the grievance machinery. 19

PWU and PHILEC failed to amicably settle their grievance. Thus, on December 21, 1998, the
parties filed a submission agreement20 with the National Conciliation and Mediation Board,
submitting the following issues to voluntary arbitration:

I
WHETHER OR NOT PHILEC VIOLATED SECTION 4 (Step Increases) ARTICLE X (Wage and
Position Standardization) OF THE EXISTING COLLECTIVE BARGAINING AGREEMENT (CBA)
IN IMPLEMENTING THE STEP INCREASES RELATIVE TO THE PROMOTION OF INDIVIDUAL
COMPLAINANTS.

II

WHETHER OR NOT PHILECs MANNER OF IMPLEMENTING THE STEP INCREASES IN

CONNECTION WITH THE PROMOTION OF INDIVIDUAL COMPLAINANTS IN RELATION TO
THE PROVISIONS OF SECTION 4, ARTICLE X OF THE CBA CONSTITUTES UNFAIR LABOR
PRACTICE.21

In their submission agreement, PWU and PHILEC designated Hon. Ramon T. Jimenez as
Voluntary Arbitrator (Voluntary Arbitrator Jimenez).22

Voluntary Arbitrator Jimenez, in the order23 dated January 4, 1999, directed the parties to
file their respective position papers.

In its position paper,24 PWU maintained that PHILEC failed to follow the schedule of step
increases under Article X, Section 4 of the June 1, 1997 collective bargaining agreement.
Machinist I, Lipios position before he underwent training for Foreman I, fell under Pay
Grade VIII, while Foreman I fell under Pay Grade X. Following the schedule under Article X,
Section 4 of the June 1, 1997 collective bargaining agreement and the formula under Article
IX, Section 1(f), Lipio should be paid training allowance equal to the step increase for pay
grade bracket VIII-IX for the first month of training. For the succeeding months, Lipio
should be paid an allowance equal to the step increase for pay grade bracket VIII-IX plus
the step increase for pay grade bracket IX-X, thus:25

First Month - - - - - 456.00

Second month - - - - - 1,031.00

Third month - - - - - 1,031.00

Fourth month - - - - - 1,031.00.

With respect to Ignacio, Sr., he was holding the position of DTAs sembler under Pay Grade
VII when hewas selected to train for the position of Foreman I under Pay Grade X. Thus, for
his first month of training, Ignacio, Sr. should be paid training allowance equal to the step
increase under pay grade bracket VII-VIII. For the second month, he should be paid an
allowance equal to the step increase under pay grade bracket VIIVIII plus the step increase
under pay grade bracket VIII-IX. For the third and fourth months, Ignacio, Sr. should
receive an allowance equal to the amount he received for the second month plus the
amount equal to the step increase under pay grade bracket IX-X, thus:26

First Month - - - - - 361.00

Second month - - - - - 817.00

Third month - - - - - 1,392.00

 Fourth month - - - - - 1,392.00.

For PHILECs failure to apply the schedule of step increases under Article X of the June 1,
1997 collective bargaining agreement, PWU argued that PHILEC committed an unfair labor
practice under Article 24827 of the Labor Code.28

In its position paper,29 PHILEC emphasized that it promoted Lipio and Ignacio, Sr. while it
was still negotiating a new collective bargaining agreement with PWU. Since PHILEC and
PWU had not yet negotiated a new collective bargaining agreement when PHILEC selected
Lipio and Ignacio, Sr. for training, PHILEC applied the "Modified SGV" pay grade scale in
computing Lipios and Ignacio, Sr.s training allowance.30

This "Modified SGV" pay grade scale, which PHILEC and PWU allegedly agreed to implement
beginning on May 9, 1997, covered both rank-and-file and supervisory
employees.31 According to PHILEC, its past collective bargaining agreements withthe rank-
and-file and supervisory unions resulted in an overlap of union membership in Pay Grade IX
of the rank-and-file employees and Pay Grade A of the supervisory employees. 32 Worse,
past collective bargaining agreements resulted in rank-and-file employees under Pay Grades
IX and X enjoying higher step increases than supervisory employees under Pay Grades A
and B:33

Pay Grade
Pay Grade Scale
Scale under the
Step Increase under the Step Increase
Rank-and-File
Supervisory CBA
CBA
VIII-IX 340.00 A 290.00
IX-X 455.00 A-B 350.00

To preserve the hierarchical wage structure within PHILECs enterprise, PHILEC and PWU
allegedly agreed to implement the uniform pay grade scale under the "Modified SGV" pay
grade system, thus:34

Pay Grade
Step Increase
Rank-and-File Supervisory

I II 65.00

II-III 78.00

III-IV 95.00

IV-V 120.00

V-VI 150.00

VI-VII 195.00

VII-VIII 255.00

VIII-IX A 350.00
 IX-X A-B 465.00

X-XI B-C 570.00

XI-XII C-D 710.00

D-E 870.00

E-F 1,055.00

Pay grade bracket IIX covered rank-and-file employees, while pay grade bracket AF
covered supervisory employees.35

Under the "Modified SGV" pay grade scale, the position of Foreman I fell under Pay Grade B.
PHILEC then computed Lipios and Ignacio, Sr.s training allowance accordingly.36

PHILEC disputed PWUs claim of unfair labor practice. According to PHILEC, it did not violate
its collective bargaining agreement with PWU when it implemented the "Modified SGV"
scale. Even assuming that it violated the collective bargaining agreement, PHILEC argued
that its violation was not "gross" or a "flagrant and/or malicious refusal to comply with the
economic provisions of [the collective bargaining agreement]." 37 PHILEC, therefore, was not
guilty of unfair labor practice.38

Voluntary Arbitrator Jimenez held in the decision 39 dated August 13, 1999, that PHILEC
violated its collective bargaining agreement with PWU.40 According to Voluntary Arbitrator
Jimenez, the June 1, 1997 collective bargaining agreement governed when PHILEC selected
Lipio and Ignacio, Sr. for promotion on August 18 and 21, 1997. 41 The provisions of the
collective bargaining agreement being the law between the parties, PHILEC should have
computed Lipios and Ignacio, Sr.s training allowance based on Article X, Section 4 of the
June 1, 1997 collective bargaining agreement.42

As to PHILECs claim that applying Article X, Section 4 would result in salary distortion
within PHILECs enterprise, Voluntary Arbitrator Jimenez ruled that this was "a concern that
PHILEC could have anticipated and could have taken corrective action" 43 before signing the
collective bargaining agreement.

Voluntary Arbitrator Jimenez dismissed PWUs claim of unfair labor practice. 44 According to
him, PHILECs acts "cannot be considered a gross violation of the [collective bargaining
agreement] nor . . . [a] flagrant and/or malicious refusal to comply withthe economic
provisions of the [agreement]."45

Thus, Voluntary Arbitrator Jimenez ordered PHILEC to pay Lipio and Ignacio, Sr. training
allowance based on Article X, Section 4 and Article IX, Section 1 of the June 1, 1997
collective bargaining agreement.46

PHILEC received a copy of Voluntary Arbitrator Jimenezs decision on August 16, 1999.47 On
August 26, 1999, PHILEC filed a motion for partial reconsideration 48 of Voluntary Arbitrator
Jimenezs decision.

In the resolution49 dated July 7, 2000, Voluntary Arbitrator Jimenez denied PHILECs motion
for partial reconsideration for lack of merit. PHILEC received a copy of the July 7, 2000
resolution on August 11, 2000.50
On August 29, 2000, PHILEC filed a petition51 for certiorari before the Court of Appeals,
alleging that Voluntary Arbitrator Jimenez gravely abused his discretion in rendering his
decision.52 PHILEC maintained that it did not violate the June 1, 1997 collective bargaining
agreement.53 It applied the "Modified SGV" pay grade rates toavoid salary distortion within
its enterprise.54

In addition, PHILEC argued that Article X, Section 4 of the collective bargaining agreement
did not apply to Lipio and Ignacio, Sr. Considering that Lipio and Ignacio, Sr. were promoted
to a supervisory position, their training allowance should be computed based on the
provisions of PHILECs collective bargaining agreement with ASSET, the exclusive bargaining
representative of PHILECs supervisory employees. 55

The Court of Appeals affirmed Voluntary Arbitrator Jimenezs decision. 56 It agreed that
PHILEC was bound to apply Article X, Section 4 of its June 1, 1997 collective bargaining
agreement with PWU in computing Lipios and Ignacio, Sr.s training allowance. 57 In its
decision, the Court of Appeals denied due course and dismissed PHILECs petition for
certiorari for lack of merit.58

PHILEC filed a motion for reconsideration, which the Court of Appeals denied in the
resolution59 dated June 23, 2005.

On August 3, 2005, PHILEC filed its petition for review on certiorari before this
court,60 insisting that it did not violate its collective bargaining agreement with
PWU.61 PHILEC maintains that Lipio and Ignacio, Sr. were promoted to a position covered by
the pay grade scale for supervisory employees.62 Consequently, the provisions of PHILECs
collective bargaining agreement with its supervisory employees should apply, not its
collective bargaining agreement with PWU.63 To insist on applying the pay grade scale in
Article X, Section 4, PHILEC argues, would result in a salary distortion within PHILEC.64

In the resolution65 dated September 21, 2005,this court ordered PWU to comment on
PHILECs petition for review on certiorari.

In its comment,66 PWU argues that Voluntary Arbitrator Jimenez did not gravely abuse his
discretion in rendering his decision. He correctly applied the provisions of the PWU collective
bargaining agreement, the law between PHILEC and its rank-and-file employees, in
computing Lipios and Ignacio, Sr.s training allowance.67

On September 27, 2006, PHILEC filed its reply,68 reiterating its arguments in its petition for
review on certiorari.

The issue for our resolution is whether Voluntary Arbitrator Jimenez gravely abused his
discretion in directing PHILEC to pay Lipios and Ignacio, Sr.s training allowance based on
Article X, Section 4 of the June 1, 1997 rank-and-file collective bargaining agreement.

This petition should be denied.

The Voluntary Arbitrators decision

dated August 13, 1999 is already final and
executory
We note that PHILEC filed before the Court of Appeals a petition for certiorari under Rule 65
of the Rules ofCourt against Voluntary Arbitrator Jimenezs decision.69

This was not the proper remedy.

Instead, the proper remedy to reverse or modify a Voluntary Arbitrators or a panel of

Voluntary Arbitrators decision or award is to appeal the award or decision before the Court
of Appeals. Rule 43, Sections 1 and 3 of the Rules of Court provide:

Section 1. Scope.

This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals
and from awards, judgments, final orders or resolutions of orauthorized by any quasi-
judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the
Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange
Commission, Office of the President, Land Registration Authority, Social Security
Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology
Transfer, National Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Department of Agrarian Reform under Republic Act No.
6657, Government Service Insurance System, Employees Compensation Commission,
Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy
Commission, Board of Investments, Construction Industry Arbitration Commission, and
voluntary arbitrators authorized by law.

....

Sec. 3. Where to appeal.

An appeal under this Rule may be taken to the Court of Appeals within the period and in the
manner herein provided, whether the appeal involves questions of fact, of law, or mixed
questions of fact and law. (Emphasis supplied)

A Voluntary Arbitrator or a panel of Voluntary Arbitrators has the exclusive original

jurisdiction over grievances arising from the interpretation or implementation of collective
bargaining agreements. Should the parties agree, a Voluntary Arbitrator or a panel of
Voluntary Arbitrators shall also resolve the parties other labor disputes, including unfair
labor practices and bargaining deadlocks. Articles 261 and 262 of the Labor Code provide:

ART. 261. JURISDICTION OF VOLUNTARY ARBITRATORS OR PANEL OF VOLUNTARY

ARBITRATORS.

The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in the immediately
preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair labor practice and shall be
resolved as grievances under the Collective Bargaining Agreement. For purposes of this
article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional Directors of the Department of Labor
and Employment shall not entertain disputes, grievances, or matters under the exclusive
and original jurisdiction of the Voluntary Arbitrator orpanel of Voluntary Arbitrators and shall
immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.

ART. 262. JURISDICTION OVER OTHER LABOR DISPUTES.

The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the parties,
shall also hear and decide all other labor disputes including unfair labor practices and
bargaining deadlocks.

In Luzon Development Bank v. Association of Luzon Development Bank Employees, 70 this

court ruled that the proper remedy against the award or decision of the Voluntary
Arbitratoris an appeal before the Court of Appeals. This court first characterized the office
ofa Voluntary Arbitrator or a panel of Voluntary Arbitrators as a quasi-judicial agency, citing
Volkschel Labor Union, et al. v. NLRC71 and Oceanic Bic Division (FFW) v. Romero: 72

In Volkschel Labor Union, et al. v. NLRC, et al.,on the settled premise that the judgments of
courts and awards of quasi-judicial agencies must become final at some definite time, this
Court ruled that the awards of voluntary arbitrators determine the rights of parties; hence,
their decisions have the same legal effect as judgments of a court. In Oceanic Bic Division
(FFW), et al. v. Romero, et al., this Court ruled that "a voluntary arbitrator by the nature of
her functions acts in a quasi-judicial capacity." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a
quasijudicial agency but independent of, and apart from, the NLRC since his decisions are
not appealable to the latter.73 (Citations omitted)

This court then stated that the office of a Voluntary Arbitrator or a panel of Voluntary
Arbitrators, even assuming that the office is not strictly a quasi-judicial agency, may be
considered an instrumentality, thus:

Assuming arguendo that the voluntaryarbitrator or the panel of voluntary arbitrators may
not strictly be considered as a quasi-judicial agency, board or commission, still both he and
the panel are comprehended within the concept of a "quasi-judicial instrumentality." It may
even be stated that it was to meet the very situation presented by the quasi-judicial
functions of the voluntary arbitrators here, as well as the subsequent arbitrator/arbitral
tribunal operating under the Construction Industry Arbitration Commission, that the broader
term "instrumentalities" was purposely included in the above-quoted provision.

An "instrumentality" is anything used as a means or agency. Thus, the terms governmental

"agency" or "instrumentality" are synonymous in the sense that either of them is a means
by which a government acts, or by which a certain government act or function is performed.
The word "instrumentality," with respect to a state, contemplates an authority to which the
state delegates governmental power for the performance of a state function. An individual
person, like an administrator or executor, is a judicial instrumentality in the settling of an
estate, in the same manner that a sub-agent appointed by a bankruptcy court is an
instrumentality of the court, and a trustee in bankruptcy of a defunct corporation is an
instrumentality of the state.

The voluntary arbitrator no less performs a state function pursuant to a governmental

power delegated to him under the provisions therefor in the Labor Code and he falls,
therefore, within the contemplation of the term "instrumentality" in the aforequoted Sec. 9
of B.P. 129.74 (Citations omitted)

Since the office of a Voluntary Arbitrator or a panel of Voluntary Arbitrators is considered a

quasi-judicial agency, this court concluded that a decision or award rendered by a Voluntary
Arbitrator is appealable before the Court of Appeals. Under Section 9 of the Judiciary
Reorganization Act of 1980, the Court of Appeals has the exclusive original jurisdiction over
decisions or awards of quasi-judicial agencies and instrumentalities:

Section 9. Jurisdiction. The Court of Appeals shall exercise:

....

3. Exclusive appellate jurisdiction over all final judgements, resolutions, orders or awardsof
Regional Trial Courts and quasijudicial agencies, instrumentalities, boards or commission,
including the Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission, except those
falling within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
(Emphasis supplied)

Luzon Development Bankwas decided in 1995 but remains "good law."75 In the 2002 case of
Alcantara, Jr. v. Court of Appeals,76 this court rejected petitioner Santiago Alcantara, Jr.s
argument that the Rules of Court, specifically Rule 43, Section 2, superseded the Luzon
Development Bank ruling:

Petitioner argues, however, that Luzon Development Bank is no longer good law because of
Section 2, Rule 43 of the Rules of Court, a new provision introduced by the 1997 revision.
The provision reads:

SEC. 2. Cases not covered. -This Rule shall not apply to judgments or final orders issued
under the Labor Code of the Philippines.

The provisions may be new to the Rules of Court but it is far from being a new law. Section
2, Rule 42 of the 1997 Rules of Civil Procedure, as presently worded, is nothing more but a
reiteration of the exception to the exclusive appellate jurisdiction of the Court of Appeals, as
provided for in Section 9, Batas Pambansa Blg. 129,7 as amended by Republic Act No.
7902:8

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission, the Employees
Compensation Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor
Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.
The Court took into account this exception in Luzon Development Bank but, nevertheless,
held that the decisions of voluntary arbitrators issued pursuant to the Labor Codedo not
come within its ambit:

x x x. The fact that [the voluntary arbitrators] functions and powers are provided for in the
Labor Code does not place him within the exceptions to said Sec. 9 since he is a quasi-
judicial instrumentality as contemplated therein. It will be noted that, although the
Employees Compensation Commission is also provided for in the Labor Code, Circular No.
1-91, which is the forerunner of the present Revised Administrative Circular No. 1-95, laid
down the procedure for the appealability of its decisions to the Court of Appeals under the
foregoing rationalization, and this was later adopted by Republic Act No. 7902 in amending
Sec. 9 of B.P. 129.

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should
likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised
Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and
commissions enumerated therein.77 (Emphases in the original)

This court has since reiterated the Luzon Development Bankruling in its decisions. 78

Article 262-A of the Labor Code provides that the award or decision of the Voluntary
Arbitrator "shall befinal and executory after ten (10) calendar days from receipt of the copy
of the award or decision by the parties":

Art. 262-A. PROCEDURES. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall
have the power to hold hearings, receive evidences and take whatever action isnecessary to
resolve the issue or issues subject of the dispute, including efforts to effect a voluntary
settlement between parties.

All parties to the dispute shall beentitled to attend the arbitration proceedings. The
attendance of any third party or the exclusion of any witness from the proceedings shall be
determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing may be
adjourned for cause or upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or
panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar
days from the date of submission of the dispute to voluntary arbitration.

The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall
contain the facts and the law on which it is based. It shall be final and executory after ten
(10) calendar days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the
absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for any
reason, may issue a writ of execution requiring either the sheriff of the Commission or
regular courts or any public official whomthe parties may designate in the submission
agreement to execute the final decision, order or award. (Emphasis supplied)

Thus, in Coca-Cola Bottlers Philippines, Inc. Sales Force UnionPTGWO-BALAIS v. Coca Cola-
Bottlers Philippines, Inc.,79 this court declared that the decision of the Voluntary Arbitrator
had become final and executory because it was appealed beyond the 10-day reglementary
period under Article 262-A of the Labor Code.

It is true that Rule 43, Section 4 of the Rules of Court provides for a 15-day reglementary
period for filing an appeal:

Section 4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice
of the award, judgment, final order or resolution, or from the date of its last publication, if
publication is required by law for its effectivity, or of the denial of petitioner's motion for
new trial or reconsideration duly filed in accordance with the governing law of the court or
agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion
and the payment of the full amount of the docket fee before the expiration of the
reglementary period, the Court of Appeals may grant an additional period of fifteen (15)
days only within which to file the petition for review. No further extension shall be granted
except for the most compelling reason and in no case to exceed fifteen (15) days.
(Emphasis supplied)

The 15-day reglementary period has been upheld by this court in a long line of cases. 80 In
AMA Computer College-Santiago City, Inc. v. Nacino,81 Nippon Paint Employees Union-
OLALIA v. Court of Appeals,82 Manila Midtown Hotel v. Borromeo,83 and Sevilla Trading
Company v. Semana,84 this court denied petitioners petitions for review on certiorari since
petitioners failed to appeal the Voluntary Arbitrators decision within the 15-day
reglementary period under Rule43. In these cases, the Court of Appeals had no jurisdiction
to entertain the appeal assailing the Voluntary Arbitrators decision.

Despite Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary
Arbitrators decision mustbe appealed before the Court of Appeals within 10 calendar days
from receipt of the decision as provided in the Labor Code.

Appeal is a "statutory privilege,"85 which may be exercised "only in the manner and in
accordance withthe provisions of the law."86 "Perfection of an appeal within the
reglementary period is not only mandatory but also jurisdictional so that failure to doso
rendered the decision final and executory, and deprives the appellate court of jurisdiction to
alter the final judgment much less to entertain the appeal."87

We ruled that Article 262-A of the Labor Code allows the appeal of decisions rendered by
Voluntary Arbitrators.88Statute provides that the Voluntary Arbitrators decision "shall
befinal and executory after ten (10) calendar days from receipt of the copy of the award or
decision by the parties." Being provided in the statute,this 10-day period must be complied
with; otherwise, no appellate court willhave jurisdiction over the appeal. This absurd
situation occurs whenthe decision is appealed on the 11th to 15th day from receipt as
allowed under the Rules, but which decision, under the law, has already become final and
executory.

Furthermore, under Article VIII, Section 5(5) of the Constitution, this court "shall not
diminish, increase, or modify substantive rights" in promulgating rules of procedure in
courts.89 The 10-day period to appeal under the Labor Code being a substantive right, this
period cannot be

diminished, increased, or modified through the Rules of Court. 90

In Shioji v. Harvey,91 this court held that the "rules of court, promulgated by authority of
law, have the force and effect of law, if not in conflict with positive law." 92 Rules of Court are
"subordinate to the statute."93 In case of conflict between the law and the Rules of Court,
"the statute will prevail."94

The rule, therefore, is that a Voluntary Arbitrators award or decision shall be appealed
before the Court of Appeals within 10 days from receipt of the award or decision. Should the
aggrieved party choose to file a motion for reconsideration with the Voluntary
Arbitrator,95 the motion must be filed within the same 10-day period since a motion for
reconsideration is filed "within the period for taking an appeal."96

A petition for certiorari is a special civil action "adopted to correct errors of jurisdiction
committed by the lower court or quasi-judicial agency, or when there is grave abuse of
discretion on the part of such court or agency amounting to lack or excess of
jurisdiction."97 An extraordinary remedy,98 a petition for certiorari may be filed only if appeal
is not available.99 If appeal is available, an appeal must be taken even if the ground relied
upon is grave abuse of discretion.100

As an exception to the rule, this court has allowed petitions for certiorari to be filed in lieu of
an appeal "(a) when the public welfare and the advancement of public policy dictate; (b)
when the broader interests of justice so require; (c) when the writs issued are null; and (d)
when the questioned order amounts to an oppressive exercise of judicial authority." 101

In Unicraft Industries International Corporation, et al. v. The Hon. Court of

Appeals,102 petitioners filed a petition for certiorari against the Voluntary Arbitrators
decision. Finding that the Voluntary Arbitrator rendered an award without giving petitioners
an opportunity to present evidence, this court allowed petitioners petition for certiorari
despite being the wrong remedy. The Voluntary Arbitrators award, thiscourt said, was null
and void for violation of petitioners right to due process. This court decided the case on the
merits.

In Leyte IV Electric Cooperative, Inc. v. LEYECO IV Employees Union-ALU,103 petitioner

likewise filed a petition for certiorari against the Voluntary Arbitrators decision, alleging that
the decision lacked basis in fact and in law. Ruling that the petition for certiorari was filed
within the reglementary period for filing an appeal, this court allowed petitioners petition
for certiorari in "the broader interests of justice."104

In Mora v. Avesco Marketing Corporation,105 this court held that petitioner Noel E. Mora
erred in filing a petition for certiorari against the Voluntary Arbitrators decision.
Nevertheless, this court decided the case on the merits "in the interest of substantial justice
to arrive at the proper conclusion that is conformable to the evidentiary facts." 106

None of the circumstances similar to Unicraft, Leyte IV Electric Cooperative, and Moraare
present in this case. PHILEC received Voluntary Arbitrator Jimenezs resolution denying its
motion for partial reconsideration on August 11, 2000. 107 PHILEC filed its petition for
certiorari before the Court ofAppeals on August 29, 2000, 108 which was 18 days after its
receipt of Voluntary Arbitrator Jimenezs resolution. The petition for certiorari was filed
beyond the 10-day reglementary period for filing an appeal. We cannot consider PHILECs
petition for certiorari as an appeal.

There being no appeal seasonably filed in this case, Voluntary Arbitrator Jimenezs decision
became final and executory after 10 calendar days from PHILECs receipt of the resolution
denying its motion for partial reconsideration.109 Voluntary Arbitrator Jimenezs decision is
already "beyond the purview of this Court to act upon."110

II

PHILEC must pay training allowance

based on the step increases provided in
the June 1, 1997 collective bargaining
agreement

The insurmountable procedural issue notwithstanding, the case will also fail on its merits.
Voluntary Arbitrator Jimenez correctly awarded both Lipio and Ignacio, Sr. training
allowances based on the amounts and formula provided in the June 1, 1997 collective
bargaining agreement.

A collective bargaining agreement is "a contract executed upon the request of either the
employer or the exclusive bargaining representative of the employees incorporating the
agreement reached after negotiations with respect to wages, hours of work and all other
terms and conditions of employment, including proposals for adjusting any grievances or
questions arising under such agreement."111 A collective bargaining agreement being a
contract, its provisions "constitute the law between the parties" 112 and must be complied
with in good faith.113

PHILEC, as employer, and PWU, as the exclusive bargaining representative of PHILECs

rank-and-file employees, entered into a collective bargaining agreement, which the parties
agreed to make effective from June 1, 1997 to May 31, 1999. Being the law between the
parties, the June 1, 1997 collective bargaining agreement must govern PHILEC and its rank-
and-file employees within the agreed period.

Lipio and Ignacio, Sr. were rank-and-file employees when PHILEC selected them for training
for the position of Foreman I beginning August 25, 1997. Lipio and Ignacio, Sr. were
selected for training during the effectivity of the June 1, 1997 rank-and-file collective
bargaining agreement. Therefore, Lipios and Ignacio, Sr.s training allowance must be
computed based on Article X, Section 4 and ArticleIX, Section 1(f) of the June 1, 1997
collective bargaining agreement.

Contrary to PHILECs claim, Lipio and Ignacio, Sr. were not transferred out of the bargaining
unit when they were selected for training. Lipio and Ignacio, Sr. remained rank-and-file
employees while they trained for the position of Foreman I. Under Article IX, Section 1(e) of
the June 1, 1997 collective bargaining agreement,114 a trainee who is "unable to
demonstrate his ability to perform the work . . . shall be reverted to his previous
assignment. . . ."115According to the same provision, the trainee "shall hold that job on a
trial or observation basis and . . . subject to prior approval of the authorized management
official, be appointed to the position in a regular capacity."116

Thus, training is a condition precedent for promotion. Selection for training does not mean
automatic transfer out of the bargaining unit of rankand-file employees.

Moreover, the June 1, 1997 collective bargaining agreement states that the training
allowance of a rank-and-file employee "whose application for a posted job is accepted shall
[be computed] in accordance with Section (f) of [Article IX]." 117 Since Lipio and Ignacio, Sr.
were rank-and-file employees when they applied for training for the position of Foreman I,
Lipios and Ignacio, Sr.s training allowance must be computed based on Article IX, Section
1(f) of the June 1, 1997 rank-and-file collective bargaining agreement.

PHILEC allegedly applied the "Modified SGV" pay grade scale to prevent any salary
distortion within PHILECs enterprise. This, however, does not justify PHILECs non-
compliance with the June 1, 1997 collective bargaining agreement. This pay grade scale is
not provided in the collective bargaining agreement. In Samahang Manggagawa sa Top
Form Manufacturing United Workers of the Philippines (SMTFM-UWP) v. NLRC,118 this court
ruled that "only provisions embodied in the [collective bargaining agreement] should be so
interpreted and complied with. Where a proposal raised by a contracting party does not find
print in the [collective bargaining agreement], it is not part thereof and the proponent has
no claim whatsoever to its implementation."119

Had PHILEC wanted the "Modified SGV" pay grade scale applied within its enterprise, "it
could have requested or demanded that [the Modified SGV scale] be incorporated in the
[collective bargaining agreement]."120 PHILEC had "the means under the law to compel
[PWU] to incorporate this specific economic proposal in the [collective bargaining
agreement]."121 It "could have invoked Article 252 of the Labor Code" 122 to incorporate the
"Modified SGV" pay grade scale in its collective bargaining agreement with PWU. But it did
not. Since this "Modified SGV" pay grade scale does not appear in PHILECs collective
bargaining agreement with PWU, PHILEC cannot insist on the "Modified SGV" pay grade
scales application. We reiterate Voluntary Arbitrator Jimenezs decision dated August 13,
1999 where he said that:

. . . since the signing of the current CBA took place on September 27, 1997, PHILEC, by
oversight, may have overlooked the possibility of a wage distortion occurring among ASSET-
occupied positions. It is surmised that this matter could have been negotiated and settled
with PWU before the actual signing of the CBA on September 27. Instead, PHILEC, again,
allowed the provisions of Art. X, Sec. 4 of the CBA to remain the way it is and is now
suffering the consequences of its laches.123 (Emphasis in the original)

We note that PHILEC did not dispute PWUs contention that it selected several rank-and-file
employees for training and paid them training allowance based on the schedule provided in
the collective bargaining agreement effective at the time of the trainees
selection.124 PHILEC cannot choose when and to whom to apply the provisions of its
collective bargaining agreement. The provisions of a collective bargaining agreement must
be applied uniformly and complied with in good faith.

Given the foregoing, Lipios and Ignacio, Sr.s training allowance should be computed based
on Article X, Section 4 in relation to Article IX, Section 1(f) of the June 1, 1997 rank-and-file
collective bargaining agreement. Lipio, who held the position of Machinist before selection
for training as Foreman I, should receive training allowance based on the following
schedule:

First Month - - - - - 456.00

Second month - - - - - 1,031.00

Third month - - - - - 1,031.00

Fourth month - - - - - 1,031.00

Ignacio, Sr., who held the position of DT-Assembler before selection for training as Foreman
I, should receive training allowance based on the following schedule:

First Month - - - - - 361.00

Second month - - - - - 817.00

Third month - - - - - 1,392.00

Fourth month - - - - - 1,392.00

Considering that Voluntary Arbitrator Jimenezs decision awarded sums of money, Lipio and
Ignacio, Sr. are entitled to legal interest on their training allowances. Voluntary Arbitrator
Jimenezs decision having become final and executory on August 22, 2000, PHILEC is liable
for legal interest equal to 12% per annum from finality of the decision until full payment as
this court ruled in Eastern Shipping Lines, Inc. v. Court of Appeals:125

When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest. . . shall be 12% per annum from such finality until its satisfaction, this
interim period being deemed to be by then as equivalent to a forbearance of credit. 126

The 6% legal interest under CircularNo. 799, Series of 2013, of the Bangko Sentral ng
Pilipinas Monetary Board shall not apply, Voluntary Arbitrator Jimenezs decision having
become final and executory prior to the effectivity of the circular on July 1,
2013.1avvphi1 In Nacar v. Gallery Frames,127 we held that:

. . . with regard to those judgments that have become final and executory prior to July 1,
2013, said judgments shall not be disturbed and shall continue to be implemented applying
the rate of interest fixed therein.128

WHEREFORE, the petition for review on certiorari is DENIED. The Court of Appeals' decision
dated May 25, 2004 is AFFIRMED.

Petitioner Philippine Electric Corporation is ORDERED to PAY respondent Eleodoro V. Lipio a

total of 3,549.00 for a four (4)-month training for the position of Foreman I with legal
interest of 12% per annum from August 22, 2000 until the amount's full satisfaction.

For respondent Emerlito C. Ignacio, Sr., Philippine Electric Corporation is ORDERED to PAY a
total of 3,962.00 for a four (4)-month training for the position of Foreman I with legal
interest of 12% per annum from August 22, 2000 until the amount's full satisfaction.

SO ORDERED.
 2. T&H v Union

G.R. No. 191714 February 26, 2014

T & H SHOPFITTERS CORPORATION/GIN QUEEN CORPORATION, STINNES HUANG,

BEN HUANG and ROGELIO MADRIAGA, Petitioners,
vs.
T & H SHOPFITTERS CORPORATION/GIN QUEEN WORKERS UNION, ELPIDIO
ZALDIVAR, DARI OS GONZALES, WILLIAM DOMINGO, BOBBY CASTILLO, JIMMY M.
PASCUA, GERMANO M. BAJO, RICO L. MANZANO, ALLAN L. CALLORINA, ROMEO
BLANCO, GILBERT M. GARCIA, CARLOS F. GERILLO, EDUARDO A. GRANDE,
EDILBRANDO MARTICIO, VIVENCIO SUSANO, ROLANDO GARCIA, JR., MICHAEL
FABABIER, ROWELL MADRIAGA, PRESNIL TOLENTINO, MARVIN VENTURA,
FRANCISCO RIVARES, PLACIDO TOLENTINO and ROLANDO ROMERO, Respondents.

DECISION

MENDOZA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court are: 1)
the November 12, 2009 Decision1 of the Court of Appeals (CA), in CA-G.R. SP No. 107188,
which affirmed the July 24, 2007 and November 13, 2008 Decision 2 of the National Labor
Relations Commission (NLRC); and 2) its March 24, 2010 Resolution 3denying
reconsideration of its decision.

The Facts

On September 7, 2004, the T&H Shopfitters Corporation/ Gin Queen Corporation workers
union (THS-GQ Union) and Elpidio Zaldivar,4 Darios Gonzales, William Domingo, Bobby
Castillo, Jimmy M. Pascua, Germano M. Bajo,5Rico L. Manzano, Allan L. Callorina,6 Romeo
Blanco, Gilbert M. Garcia, Carlos F. Gerillo, Eduardo A. Grande, Edilbrando Marticio, Vivencio
Susano, Rolando Garcia, Jr., Michael Fababier, Rowell Madriaga, Presnil Tolentino, Marvin
Ventura, Francisco Rivares, Placido Tolentino, and Rolando Romero (respondents), all of
whom are officers and/or members of THS-GQ union, filed their Complaint7 for Unfair Labor
Practice (ULP) by way of union busting, and Illegal Lockout, with moral and exemplary
damages and attorneys fees, against T&H Shopfitters Corporation (T&H Shopfitters) and
Gin Queen Corporation (Gin Queen) (collectively referred to as "petitioners"), before the
Labor Arbiter (LA).

Respondents treated T&H Shopfitters and Gin Queen as a single entity and their sole
employer. In their desire to improve their working conditions, respondents and other
employees of petitioners held their first formal meeting on November 23, 2003 to discuss
the formation of a union. The following day or on November 24, 2003, seventeen (17)
employees were barred from entering petitioners factory premises located in Castillejos,
Zambales, and ordered to transfer to T&H Shopfitters warehouse at Subic Bay Freeport
Zone (SBFZ) purportedly because of its expansion. Afterwards, the said seventeen (17)
employees were repeatedly ordered to go on forced leave due to the unavailability of work.

On December 18, 2003, the Department of Labor and Employment (DOLE), Regional Office
No. III issued a certificate of registration in favor of THS-GQ Union.
Respondents contended that the affected employees were not given regular work
assignments, while subcontractors were continuously hired to perform their functions. This
development prompted respondents to seek the assistance of the National Conciliation and
Mediation Board. Subsequently, an agreement between petitioners and THS-GQ Union was
reached. Petitioners agreed to give priority to regular employees in the distribution of work
assignments. Respondents averred, however, that petitioners never complied with its
commitment but instead hired contractual workers.

On March 24, 2004, THS-GQ Union filed a petition for certification election. On July 12,
2004, an order was issued to hold the certification election in both T&H Shopfitters and Gin
Queen. Eventually, the certification election was scheduled on October 11, 2004.

Meanwhile, through a memorandum, dated August 17, 2004, petitioner Ben Huang (Huang),
Director for Gin Queen, informed its employees of the expiration of the lease contract
between Gin Queen and its lessor in Castillejos, Zambales and announced the relocation of
its office and workers to Cabangan, Zambales. Some of the respondents, who visited the
site in Cabangan, discovered that it was a "talahiban" or grassland. Later, the said union
officers and members were made to work as grass cutters in Cabangan, under the
supervision of a certain Barangay Captain Greg Pangan. Due to these circumstances, the
employees assigned in Cabangan did not report for work. As a consequence, the THS-GQ
Union president was made to explain why he should not be terminated for insubordination.
The other employees who likewise failed to report in Cabangan were meted out with
suspension.

On October 10, 2004, petitioners sponsored a field trip to Iba, Zambales, for its employees.
The officers and members of the THS-GQ Union were purportedly excluded from the field
trip. On the evening of the field trip, a certain Angel Madriaga, a sales officer of petitioners,
campaigned against the union in the forthcoming certification election.

The following day or on October 11, 2004, the employees were escorted from the field trip
to the polling center in Zambales to cast their votes. On October 13, 2004, the remaining
employees situated at the SBFZ plant cast their votes as well. Due to the heavy pressure
exerted by petitioners, the votes for "no union" prevailed. On October 14, 2004, the THS-
GQ Union filed its protest with respect to the certification election proceedings.

Respondents averred that the following week after the certification elections were held,
petitioners retrenched THG-GQ Union officers and members assigned at the Zambales plant.
Respondents claimed that the work weeks of those employees in the SBFZ plant were
drastically reduced to only three (3) days in a month.

In its defense, Gin Queen, claiming that it is a corporation separate and distinct from T&H
Shopfitters, stressed that respondents were all employees. Gin Queen claimed that due to
the decrease in orders from its customers, they had to resort to cost cutting measures to
avoid anticipated financial losses. Thus, it assigned work on a rotational basis. It was of the
impression that the employees, who opposed its economic measures, were merely
motivated by spite in filing the complaint for ULP against it.

In addition, Gin Queen explained that its transfer from Castillejos, Zambales to Cabangan,
Zambales was a result of the expiration of its lease agreement with Myra D. Lumibao
(Myra), its lessor. Since the Cabangan site was bare and still required construction, Gin
Queen offered work, to employees who opted to stay, on rotation as well.
In its Decision,8 dated December 21, 2005, the LA dismissed respondents complaint and all
their money claims for lack of merit.

In dismissing the complaint, the LA explained:

x x x x.

In the case at bar, we carefully examined the grounds raised by the complainants [herein
respondents] as basis for claiming that the respondents [herein petitioners] committed
unfair labor practices by way of illegal lockout, one of which is the alleged transfer of 17
workers to Subic Bay Freeport Zone, however, we are dismay (sic) to know that not even
one of these 17 workers is a complainant in these cases. While the labor union may
represent its members in filing cases before this Office, at least these members must show
their intention to file a case by signing in the complaint to prove that they have grievances
against their employer which was lacking in these cases. Further, there was no showing that
the transfer of these 17 workers is considered an unfair labor practice of the respondents
considering that their transfer was effected long before the union was organized.

We also analyzed the allegations of the complainants that the transfer of the working cite
(sic) of the respondent Gin Queen Corporation was a part of the unfair labor practices
committed by the respondents, however, the complainants failed miserably to controvert
the documentary evidence adduced by the respondent Gin Queen Corporation that the lease
contract agreement of the place had already expired and it was the management
prerogative to transfer as a cost cutting measures. Again the transfer of the place of work
would not be considered as unfair labor practice.

Complainants alleged that the respondents committed unfair labor practices by means of
lockout wherein the respondents should have temporarily refused to provide work to the
complainants by a result of labor or industrial dispute. Complainants failed to show that the
rotation of work for them is considered an unfair labor practice and considered a Lockout.

Complainants rather submitted several notices showing that the company has no sufficient
orders coming from clients and does not have enough raw materials for production as basis
for these complainants not to render work and be rotated, and thus controvert their
allegations that there was lockout committed by the respondents. Further, the
documentary evidences adduced by the complainants clearly show that respondents never
terminated the complainants when they were given their notices of suspension negating the
claim that there was lockout committed by respondents.

x x x x.9

Aggrieved, respondents appealed to the NLRC. In its July 24, 2007 Decision, the NLRC
reversed the LA decision and ruled in favor of respondents. The dispositive portion of the
said decision reads:

WHEREFORE, the decision appealed from is hereby REVERSED.

Respondents T & H Shopfitters Corp., Gin Queen Corp. (or MDL, as it is now called),
Stennis Huang, as well as the presidents of the respondent corporations as of November
2003 and the date of the execution of this decision are hereby ordered to pay each of the
complainants moral and exemplary damages amounting to 50,000.00 and 35,000.00
respectively. In addition, they shall pay the complainants attorneys fees equivalent to ten
percent (10%) of the total judgment award.

SO ORDERED.

In granting the appeal, the NLRC reasoned:

Based on the above-mentioned affidavits,10 it may be concluded that the respondents

[herein petitioners] committed unfair labor practice acts consisting in interfering with the
exercise of the employees right to self-organization (specifically, sponsoring a field trip on
the day preceding the certification election, warning the employees of dire consequences
should the union prevail, and escorting them to the polling center) and discriminating in
regard to conditions of employment in order to discourage union membership (assigning
union officers and active union members as grass cutters on rotation basis).

xxxx

Furthermore, it is noteworthy that, based on their Articles of Incorporation, T & H

Corporation and Gin Queen Corporation are engaged in the same line of business. It should
also be noted that respondents did not controvert the allegations to the effect that Myra D.
Lumibao, the supposed lessor of respondent corporations, is the wife of respondent Stennis
Huang, and that Gin Queen Corporation has been renamed MDL, but still carries on the
same business in the same premises using the same machines and facilities. These
circumstances, together with the supposed assignment of respondent Stennis Huangs
interest in Gin Queen Corporation to a third party are badges of fraud that justify the
piercing of the veil of corporate fiction. x x x

Thus, based on the foregoing, respondents T & H Shopfitters Corporation, Gin Queen
Corporation (now known as MDL) and Stennis Huang, as well as the presidents of the
respondent corporations as of November 2003 and the date of execution of this decision
may be held liable for unfair labor practice and the corresponding award of moral and
exemplary damages.11

Petitioners filed a motion for reconsideration but the NLRC denied the same in its November
13, 2008 Decision.

Dissatisfied with the adverse ruling, petitioners instituted a petition for certiorari under Rule
65 of the Rules of Court before the CA arguing grave abuse of discretion on the part of the
NLRC in reversing the LA decision.

In its Decision, dated November 12, 2009, the CA sustained the NLRC ruling. The fallo of
which reads:

WHEREFORE, premises considered, the petition for certiorari is DENIED. The NLRC Decisions
dated July 24, 2007 and November 13, 2008 in NLRC NCR CA NO. 048258 (NLRC RAB III-
09-7882-04, NLRC RAB III-09-7980-04) are AFFIRMED.

SO ORDERED.

The CA held that errors of judgment are not within the province of a special civil action for
certiorari. It declared that factual findings of quasi-judicial agencies that had acquired
expertise in matters entrusted to their jurisdiction were accorded not only respect but
finality if they were supported by substantial evidence. The CA noted that the NLRC
considered the evidence and applied the law in this case, thus, no grave abuse of discretion
could be imputed on the part of the NLRC in reversing the LA ruling.

Petitioners moved for reconsideration but the same was denied by the CA in its March 24,
2010 Resolution.

Not in conformity with the ruling of the CA, petitioners seek relief with this Court raising the
following ISSUES

I. WHETHER OR NOT PETITIONERS T & H SHOPFITTERS CORPORATION AND GIN

QUEEN CORPORATION ARE ONE AND THE SAME CORPORATION.

II. WHETHER OR NOT PETITIONER GIN QUEEN CORPORATION IS LIABLE TO THE

RESPONDENTS FOR UNFAIR LABOR PRACTICE.

III. WHETHER OR NOT THE AWARD OF MORAL AND EXEMPLARY DAMAGES IN FAVOR
OF THE RESPONDENTS IS PROPER.

IV. WHETHER OR NOT THE AWARD OF TEN PERCENT (10%) ATTORNEYS FEES IN
FAVOR OF THE RESPONDENT IS PROPER.12

Simply put, the issue for the Courts resolution is whether ULP acts were committed by
petitioners against respondents in the case at bench.

In support of their position, petitioners stress that T&H Shopfitters and Gin Queen are
corporations separate and distinct from each other. Consequently, T&H Shopfitters and
Stinnes Huang, an officer of T&H Shopfitters, cannot be held liable for ULP for the reason
that there is no employer-employee relationship between the former and respondents.
Further, Gin Queen avers that its decision to implement an enforced rotation of work
assignments for respondents was a management prerogative permitted by law, justified by
the decrease in the orders it received from its customers. It explains that its failure to
present concrete proof of its decreasing orders was due to the impossibility of proving a
negative assertion. It also asserts that the transfer from Castillejos to Cabangan was made
in good faith and solely because of the expiration of its lease contract in Castillejos.

The Courts Ruling

As to the issue of ULP, petitioners argument is utterly without merit.

In the case at bench, petitioners are being accused of violations of paragraphs (a), (c), and
(e) of Article 257 (formerly Article 248) of the Labor Code, 13 to wit:

Article 257. Unfair labor practices of employers.It shall be unlawful for an employer to
commit any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;

xxxx
(c) To contract out services or functions being performed by union members when such will
interfere with, restrain, or coerce employees in the exercise of their right to self-
organization;

xxxx

(e) To discriminate in regard to wages, hours of work, and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization. x x
x

The concept of ULP is embodied in Article 256 (formerly Article 247) of the Labor
Code,14 which provides:

Article 256. Concept of unfair labor practice and procedure for prosecution thereof.Unfair
labor practices violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations.

xxxx

In essence, ULP relates to the commission of acts that transgress the workers right to
organize. As specified in Articles 248 [now Article 257] and 249 [now Article 258] of the
Labor Code, the prohibited acts must necessarily relate to the workers' right to self-
organization x x x.15

In the case of Insular Life Assurance Co., Ltd. Employees Association NATU v. Insular Life
Assurance Co. Ltd.,16this Court had occasion to lay down the test of whether an employer
has interfered with and coerced employees in the exercise of their right to self-organization,
that is, whether the employer has engaged in conduct which, it may reasonably be said,
tends to interfere with the free exercise of employees rights; and that it is not necessary
that there be direct evidence that any employee was in fact intimidated or coerced by
statements of threats of the employer if there is a reasonable inference that anti-union
conduct of the employer does have an adverse effect on self-organization and collective
bargaining.

The questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its
employees, to the exclusion of union members, before the scheduled certification election;
2) the active campaign by the sales officer of petitioners against the union prevailing as a
bargaining agent during the field trip; 3) escorting its employees after the field trip to the
polling center; 4) the continuous hiring of subcontractors performing respondents
functions; 5) assigning union members to the Cabangan site to work as grass cutters; and
6) the enforcement of work on a rotational basis for union members, all reek of interference
on the part of petitioners.

Indubitably, the various acts of petitioners, taken together, reasonably support an inference
that, indeed, such were all orchestrated to restrict respondents free exercise of their right
to self-organization. The Court is of the considered view that petitioners undisputed actions
prior and immediately before the scheduled certification election, while seemingly
innocuous, unduly meddled in the affairs of its employees in selecting their exclusive
bargaining representative. In Holy Child Catholic School v. Hon. Patricia Sto. Tomas, 17 the
Court ruled that a certification election was the sole concern of the workers, save when the
employer itself had to file the petition x x x, but even after such filing, its role in the
certification process ceased and became merely a bystander. Thus, petitioners had no
business persuading and/or assisting its employees in their legally protected independent
process of selecting their exclusive bargaining representative. The fact and peculiar timing
of the field trip sponsored by petitioners for its employees not affiliated with THS-GQ Union,
although a positive enticement, was undoubtedly extraneous influence designed to impede
respondents in their quest to be certified. This cannot be countenanced.

Not content with achieving a "no union" vote in the certification election, petitioners
launched a vindictive campaign against union members by assigning work on a rotational
basis while subcontractors performed the latters functions regularly. Worse, some of the
respondents were made to work as grass cutters in an effort to dissuade them from further
collective action.1wphi1 Again, this cannot be countenanced.

More importantly, petitioners' bare denial of some of the complained acts and unacceptable
explanations, a mere afte1ihought at best, cannot prevail over respondents' detailed
narration of the events that transpired. At this juncture, it bears to emphasize that in labor
cases, the quantum of proof necessary is substantial evidence, 18 or that amount of relevant
evidence as a reasonable mind might accept as adequate to suppoti a conclusion, even if
other minds, equally reasonable, might conceivably opine otherwise. 19

In fine, mindful of the nature of the charge of ULP, including its civil and/or criminal
consequences, the Court finds that the NLRC, as correctly sustained by the CA, had
sufficient factual and legal bases to support its finding of ULP.

Anent the issue on the award of attorney's fees, the applicable law concerning the grant
thereof in labor cases is Article 11120 of the Labor Code. Pursuant thereto, the award of
10% attorney's fees is limited to cases of unlawful withholding of wages. In this case,
however, the Court cannot find any claim or proof that petitioners unlawfully withheld the
wages of respondents. Consequently, the grant of 10% attorney's fees in favor of
respondents is not justified under the circumstances. Accordingly, the Court deems it proper
to delete the same.

WHEREFORE, the November 12, 2009 Decision of the Court of Appeals and its March 24,
2010 Resolution, in CA-G.R. SP No. 107188, are AFFIRMED, except with respect to the
award of attorney's fees which is hereby DELETED.

SO ORDERED.

3. Manila v Mining corp

G.R. Nos. 178222-23 September 29, 2010

MANILA MINING CORP. EMPLOYEES ASSOCIATION-FEDERATION OF FREE

WORKERS CHAPTER, SAMUEL G. ZUIGA, in his capacity as President, Petitioners,
vs.
MANILA MINING CORP. and/or ARTEMIO F. DISINI, President, RENE F.
CHANYUNGCO, (SVP-Treasurer), RODOLFO S. MIRANDA, (VP-Controller),
VIRGILIO MEDINA (VP), ATTY. CRISANTO MARTINEZ (HRD), NIGEL TAMLYN
(Resident Manager), BRYAN YAP (VP), FELIPE YAP (Chairman of the Board), and
the NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), Respondents.

DECISION

PEREZ, J.:

This petition for review on certiorari seeks a reversal of the 30 June 2006 Decision 1 of the
Court of Appeals in CA-G.R. SP No. 86073 and its Resolution2 in the same case dated 30
May 2007.

Respondent Manila Mining Corporation (MMC) is a publicly-listed corporation engaged in

large-scale mining for gold and copper ore. MMC is required by law to maintain a tailings
containment facility to store the waste material generated by its mining operations.
Consequently, MMC constructed several tailings dams to treat and store its waste materials.
One of these dams was Tailings Pond No. 7 (TP No. 7), which was constructed in 1993 and
was operated under a permit issued by the Department of Environment and Natural
Resources (DENR), through its Environmental Management Bureau (EMB) in Butuan City,
Agusan del Norte.3

On 10 January 2000, eleven (11) rank-and-file employees of MMC, who later became
complainants before the labor arbiter, attended the organizational meeting of MMC-Makati
Employees Association-Federation of Free Workers Chapter (Union). On 3 March 2000, the
Union filed with the Department of Labor and Employment (DOLE) all the requirements for
its registration. The Union acquired its legitimate registration status on 30 March 2000.
Subsequently, it submitted letters to MMC relating its intention to bargain collectively. On
11 July 2001, the Union submitted its Collective Bargaining Agreement (CBA) proposal to
MMC.

Upon expiration of the tailings permit on 25 July 2001, DENR-EMB did not issue a
permanent permit due to the inability of MMC to secure an Environmental Compliance
Certificate (ECC). An essential component of an ECC is social acceptability or the consent of
the residents in the community to allow TP No. 7 to operate, which MMC failed to
obtain.4 Hence, it was compelled to temporarily shut down its mining operations, resulting
in the temporary lay-off of more than 400 employees in the mine site.

On 30 July 2001, MMC called for the suspension of negotiations on the CBA with the Union
until resumption of mining operations.5

Among the employees laid-off, complainants Samuel Zuiga, Myrna Maquio, Doroteo Torre,
Arsenio Mark Perez, Edmundo Galvez, Diana Ruth Rellores, Jonathan Araneta, Teresita
Lagman, Reynaldo Anzures, Gerardo Opena, and Edwin Tuazon, together with the Union
filed a complaint before the labor arbiter6 on even date praying for reinstatement,
recognition of the Union as the sole and exclusive representative of its rank-and-file
employees, and payment of moral and exemplary damages and attorneys fees. 7
In their Position Paper,8 complainants challenged the validity of their lay-off on the
averment that MMC was not suffering from business losses. They alleged that MMC did not
want to bargain collectively with the Union, so that instead of submitting their
counterproposal to the CBA, MMC decided to terminate all union officers and active
members. Petitioners questioned the timing of their lay-off, and alleged that first, there was
no showing that cost-cutting measures were taken by MMC; second, no criteria were
employed in choosing which employees to lay-off; and third, the individuals laid-off were
those who signed the attendance sheet of the union organizational meeting. Petitioners
likewise claimed that they were denied due process because they were not given a 30-day
notice informing them of the lay-off. Neither was the DOLE informed of this lay-off, as
mandated by law.9

Respondents justified the temporary lay-off as bona fide in character and a valid
management prerogative pending the issuance of the permit to continuously operate TP No.
7.

The labor arbiter ruled in favor of MMC and held that the temporary shutdown of the mining
operation, as well as the temporary lay-off of the employees, is valid.10

On appeal, the National Labor Relations Commission (NLRC) modified the judgment of the
labor arbiter and ordered the payment of separation pay equivalent to one month pay for
every year of service. It ratiocinated that the temporary lay-off, which exceeded more than
six (6) months, had the effect of severance of the employer-employee relationship. The
dispositive portion of the Decision read:

WHEREFORE, the assailed decision is, as it is hereby, Vacated and Set Aside and a new one
entered ordering respondent Manila Mining Corporation to pay the individual complainants
their separation pay computed as follows:

1. Samuel G. [Z]uiga From Feb. 1, 1995 to

July 27, 2001 = 7 yrs.

P14,300/mo.
P14,300 x 7 yrs. x P 50,050.00

2. Myrna Maquio From March 1992 to

July 27, 2001 = 9 yrs.

P14,000/mo.
P14,000 x 9 yrs. x P 63,000.00

3. Doroteo J. Torre From July 1983 to

July 27, 2001 = 18 yrs.

P10,000/mo.
P10,000 x 18 yrs. x P 90,000.00

4. Arsenio Mark M. Perez From June 1996 to

 July 27, 2001 = 5 yrs.
P9,500/mo.
P9,500 x 5 yrs. x P 23,750.00

5. Edmundo M. Galvez From June 1997 to

July 27, 2001 = 4 yrs.

P9,500/mo.
P9,500 x 4 yrs. x P 19,000.00

6. Jonathan Araneta From March 1992 to

July 27, 2001 = 9 yrs.

P15,500/mo.
P15,500 x 9 yrs. x P 69,750.00

7. Teresita D. Lagman From August 1980 to

July 27, 2001 = 20 yrs.

P10,900/mo.
P10,900 x 20 yrs. x P109,000.00

8. Gerardo Opena From October 1997 to

July 27, 2001 = 4 yrs.

P8,250/mo.
P8,250 x 4 yrs. x P 16,500.00

9. Edwin Tuazon From August 1994 to

July 27, 2001 = 8 yrs.

P7,000/mo.
P7,000 x 8 yrs. x P 28,000.00
GRAND TOTAL P469,050.00

In addition respondent company is hereby ordered to pay attorneys fees to complainants

equivalent to 10% of the award. 11

In an Order12 dated 31 May 2004, the NLRC affirmed its Resolution.

Dissatisfied, both parties separately filed their petitions for certiorari with the Court of
Appeals, docketed as CA-G.R. SP No. 86073 and CA G.R. SP No. 86163.

The two petitions were consolidated upon motion by MMC in a Resolution dated 3 February
2005.
In its Decision dated 30 June 2006, the Court of Appeals modified the NLRC ruling, thus:

WHEREFORE, the instant petition is partially GRANTED and the challenged Resolution dated
August 29, 2003 of public respondent National Labor Relations Commission in NLRC NCR CA
No. 033111-(CA No. 033111-02) is MODIFIED insofar as it holds MMC liable to pay the
Union attorneys fees equivalent to 10% of the award, which portion of the questioned
decision is now SET ASIDE.

The monetary award of separation pay is maintained, but is MODIFIED from one (1) month
pay for every year of service to ONE-HALF (1/2) MONTH PAY for every year of service, a
fraction of at least six (6) months being considered as one (1) whole year. 13

Both parties filed their respective motions for reconsideration but in a Resolution dated 30
May 2007, the Court of Appeals denied the motions for lack of merit.141avvphi1

Only the Union elevated the case to this Court via the instant petition for review
on certiorari. The Union attributes bad faith on the part of MMC in implementing the
temporary lay-off resulting in the complainants constructive dismissal. The Union alleges
that the failure to obtain a permit to operate TP No. 7 is largely due to failure on the part of
MMC to comply with the DENR-EMBs conditions.15

The Union claims that the temporary lay-off was effected without any proper notice to the
DOLE as mandated by Article 283 of the Labor Code. It further maintains that MMC did not
observe the jurisprudential criteria in the selection of the employees to be laid-off.16

The Union insists that MMC is guilty of unfair labor practice when it unilaterally suspended
the negotiation for a CBA. The Union avers that the lay-off and subsequent termination of
complainants were due to the formation of the union at MMC.17

MMC defends the temporary lay-off of the employees as valid and done in the exercise of
management prerogative. It concedes that upon expiration of the 6-month period, coupled
with losses suffered by MMC, the complainants were constructively dismissed. However,
MMC takes exception to the application of Article 286 of the Labor Code in that the 6-month
period cannot and will not apply to the instant case in order to consider the employees
terminated and to support the payment of separation pay. MMC explains that the 6-month
period does not refer to a situation where the employer does not have any control over the
nature, extent and period of the temporary suspension of operations. MMC adds that the
suspension of MMCs operations is left primarily to the discretion of the DENR-EMB, which
has the authority to issue MMCs permit to operate TP No. 7. 18

MMC further submits that where the closure is due to serious business losses, such as in
this case where the aggregate losses amounted to over P880,000,000.00, the law does not
impose any obligation upon the employer to pay separation benefits.19

With respect to the charge of unfair labor practice, MMC avers that it merely deferred
responding to the Unions letter-proposal until the resumption of its mining operations. It
went to claim further that the employment relationship between the parties was suspended
at the time the request to bargain was made.20

The issue of MMCs temporary suspension of business operations resulting in the temporary
lay-off of some of its employees was squarely addressed by the labor tribunals and the
Court of Appeals. They sustained in unison the validity of the temporary suspension, as well
as the temporary lay-off.

We agree. The lay-off is neither illegal nor can it be considered as unfair labor practice.

Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the
residents of the community where the tailings pond would operate, one of the conditions
imposed by DENR-EMB in granting its application for a permanent permit. It is precisely
MMCs faultless failure to secure a permit which caused the temporary shutdown of its
mining operations. As aptly put by the Court of Appeals:

The evidence on record indeed clearly shows that MMCs suspension of its mining operations
was bonafide and the reason for such suspension was supported by substantial evidence.
MMC cannot conduct mining operations without a tailings disposal system. For this purpose,
MMC operates TP No. 7 under a valid permit from the Department of Environment and
Natural Resources (DENR) through its Environmental Management Bureau (EMB). In fact, a
"Temporary Authority to Construct and Operate" was issued on January 25, 2001 in favor of
MMC valid for a period of six (6) months or until July 25, 2001. The NLRC did not dispute
MMCs claim that it had timely filed an application for renewal of its permit to operate TP No.
7 but that the renewal permit was not immediately released by the DENR-EMB, hence, MMC
was compelled to temporarily shutdown its milling and mining operations. Here, it is once
apparent that the suspension of MMCs mining operations was not due to its fault nor was it
necessitated by financial reasons. Such suspension was brought about by the non-issuance
of a permit for the continued operation of TP No. 7 without which MMC cannot resume its
milling and mining operations. x x x.21 [Emphasis supplied.]

Unfair labor practice cannot be imputed to MMC since, as ruled by the Court of Appeals, the
call of MMC for a suspension of the CBA negotiations cannot be equated to "refusal to
bargain."

Article 252 of the Labor Code defines the phrase "duty to bargain collectively," to wit:

ARTICLE 252. Meaning of duty to bargain collectively. - The duty to bargain

collectively means the performance of a mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment including proposals
for adjusting any grievances or questions arising under such agreements [and executing a
contract incorporating such agreements] if requested by either party but such duty does not
compel any party to agree to a proposal or to make any concession.

For a charge of unfair labor practice to prosper, it must be shown that the employer was
motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have
acted in a manner contrary to morals, good customs, or public policy causing social
humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the
employer and the employees to bargain collectively with each other, such compulsion does
not include the commitment to precipitately accept or agree to the proposals of the other.
All it contemplates is that both parties should approach the negotiation with an open mind
and make reasonable effort to reach a common ground of agreement. 22

The Union based its contention on the letter request by MMC for the suspension of the
collective bargaining negotiations until it resumes operations. 23 Verily, it cannot be said that
MMC deliberately avoided the negotiation. It merely sought a suspension and in fact, even
expressed its willingness to negotiate once the mining operations resume. There was valid
reliance on the suspension of mining operations for the suspension, in turn, of the CBA
negotiation. The Union failed to prove bad faith in MMCs actuations.

Even as we declare the validity of the lay-off, we cannot say that MMC has no obligation at
all to the laid-off employees. The validity of its act of suspending its operations does not
excuse it from paying separation pay.

MMC seeks refuge in Article 286 which provides:

ART. 286. When employment not deemed terminated. The bona fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months, or the
fulfillment by the employee of a military or civic duty shall not terminate employment. In all
such cases, the employer shall reinstate the employee to his former position without loss of
seniority rights if he indicates his desire to resume his work not later than one (1) month
from the resumption of operations of his employer or from his relief from the military or
civic duty.

Article 286 of the Labor Code allows the bona fide suspension of operations for a period not
exceeding six (6) months. During the suspension, an employee is not deemed terminated.
As a matter of fact, the employee is entitled to be reinstated once the employer resumes
operations within the 6-month period. However, Article 286 is silent with respect to the
rights of the employee if the suspension of operations lasts for more than 6 months. Thus is
bred the issue regarding the responsibility of MMC toward its employees.

MMC subscribes to the view that for purposes of determining employer responsibility, an
employment should likewise not be deemed terminated, should the suspension of operation
go beyond six (6) months as long as the continued suspension is due, as in this case, to a
cause beyond the control of the employer.

We disagree.

As correctly elucidated upon by the Court of Appeals:

We observe that MMC was forced by the circumstances, hence, it resorted to a temporary
suspension of its mining and milling operations. It is clear that MMC had no choice. It would
be well to reiterate at this juncture that the reason for such suspension cannot be attributed
to DENR-EMB. It is thus, evident, that the MMC declared temporary suspension of
operations to avert further losses.24

The decision to suspend operation ultimately lies with the employer, who in its desire to
avert possible financial losses, declares, as here, suspension of operations.

Article 283 of the Labor Code applies to MMC and it provides:

ARTICLE 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 termination due to the installation of labor-saving devices or redundancy, the
worker affected thereby shall be entitled to a separation pay equivalent to at least his one
(1) month pay or to at least one (1) month pay for every year of service, whichever is
higher. In case of retrenchment to prevent losses and in cases of closures 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.

Said provision is emphatic that an employee, who was dismissed due to cessation of
business operation, is entitled to the separation pay equivalent to one (1) month pay or at
least one-half (1/2) month pay for every year of service, whichever is higher. And it is
jurisprudential that separation pay should also be paid to employees even if the closure or
cessation of operations is not due to losses.25ten.lihpwal

The Court is not impressed with the claim that actual severe financial losses exempt MMC
from paying separation benefits to complainants. In the first place, MMC did not appeal the
decision of the Court of Appeals which affirmed the NLRCs award of separation pay to
complainants. MMCs failure had the effect of making the awards final so that MMC could no
longer seek any other affirmative relief. In the second place, the non-issuance of a permit
forced MMC to permanently cease its business operations, as confirmed by the Court of
Appeals. Under Article 283, the employer can lawfully close shop anytime as long as
cessation of or withdrawal from business operations is bona fide in character and not
impelled by a motive to defeat or circumvent the tenurial rights of employees, and as long
as he pays his employees their termination pay in the amount corresponding to their length
of service.26 The cessation of operations, in the case at bar is of such nature. It was proven
that MMC stopped its operations precisely due to failure to secure permit to operate a
tailings pond. Separation pay must nonetheless be given to the separated employees.

Finding no cogent reason to disturb its ruling, we affirm the Decision of the Court of
Appeals.

BASED ON THE FOREGOING, the petition is DENIED. The Decision of the Court of
Appeals is AFFIRMED. No costs.

SO ORDERED.

4. FVC v sama-samang

G.R. No. 176249 November 27, 2009

FVC LABOR UNION-PHILIPPINE TRANSPORT AND GENERAL WORKERS

ORGANIZATION (FVCLU-PTGWO),Petitioner,
vs.
SAMA-SAMANG NAGKAKAISANG MANGGAGAWA SA FVC-SOLIDARITY OF
INDEPENDENT AND GENERAL LABOR ORGANIZATIONS (SANAMA-FVC-
SIGLO), Respondent.
DECISION

BRION, J.:

We pass upon the petition for review on certiorari under Rule 45 of the Rules of Court 1 filed
by FVC Labor UnionPhilippine Transport and General Workers Organization (FVCLU-
PTGWO) to challenge the Court of Appeals (CA) decision of July 25, 2006 2 and its resolution
rendered on January 15, 20073 in C.A. G.R. SP No. 83292.4

THE ANTECEDENTS

The facts are undisputed and are summarized below.

On December 22, 1997, the petitioner FVCLU-PTGWO the recognized bargaining agent of
the rank-and-file employees of the FVC Philippines, Incorporated (company) signed a five-
year collective bargaining agreement (CBA) with the company. The five-year CBA period
was from February 1, 1998 to January 30, 2003.5 At the end of the 3rd year of the five-year
term and pursuant to the CBA, FVCLU-PTGWO and the company entered into the
renegotiation of the CBA and modified, among other provisions, the CBAs duration. Article
XXV, Section 2 of the renegotiated CBA provides that "this re-negotiation agreement shall
take effect beginning February 1, 2001 and until May 31, 2003" thus extending the original
five-year period of the CBA by four (4) months.

On January 21, 2003, nine (9) days before the January 30, 2003 expiration of the originally-
agreed five-year CBA term (and four [4] months and nine [9] days away from the expiration
of the amended CBA period), the respondent Sama-Samang Nagkakaisang Manggagawa sa
FVC-Solidarity of Independent and General Labor Organizations (SANAMA-SIGLO) filed
before the Department of Labor and Employment (DOLE) a petition for certification election
for the same rank-and-file unit covered by the FVCLU-PTGWO CBA. FVCLU-PTGWO moved
to dismiss the petition on the ground that the certification election petition was filed outside
the freedom period or outside of the sixty (60) days before the expiration of the CBA on
May 31, 2003.

Action on the Petition and Related Incidents

On June 17, 2003, Med-Arbiter Arturo V. Cosuco dismissed the petition on the ground that it
was filed outside the 60-day period counted from the May 31, 2003 expiry date of the
amended CBA.6 SANAMA-SIGLO appealed the Med-Arbiters Order to the DOLE Secretary,
contending that the filing of the petition on January 21, 2003 was within 60-days from the
January 30, 2003 expiration of the original CBA term.

DOLE Secretary Patricia A. Sto. Tomas sustained SANAMA-SIGLOs position, thereby setting
aside the decision of the Med-Arbiter.7 She ordered the conduct of a certification election in
the company. FVCLU-PTGWO moved for the reconsideration of the Secretarys decision.

On November 6, 2003, DOLE Acting Secretary Manuel G. Imson granted the motion; he set
aside the August 6, 2003 DOLE decision and dismissed the petition as the Med-Arbiters
Order of June 17, 2003 did.8 The Acting Secretary held that the amended CBA (which
extended the representation aspect of the original CBA by four [4] months) had been
ratified by members of the bargaining unit some of whom later organized themselves as
SANAMA-SIGLO, the certification election applicant. Since these SANAMA-SIGLO members
fully accepted and in fact received the benefits arising from the amendments, the Acting
Secretary rationalized that they also accepted the extended term of the CBA and cannot
now file a petition for certification election based on the original CBA expiration date.

SANAMA-SIGLO moved for the reconsideration of the Acting Secretarys Order, but
Secretary Sto. Tomas denied the motion in her Order of January 30, 2004.9

SANAMA-SIGLO sought relief from the CA through a petition for certiorari under Rule 65 of
the Rules of Court based on the grave abuse of discretion the Labor Secretary committed
when she reversed her earlier decision calling for a certification election. SANAMA-SIGLO
pointed out that the Secretarys new ruling is patently contrary to the express provision of
the law and established jurisprudence.

THE CA DECISION

The CA found SANAMA-SIGLOs petition meritorious on the basis of the applicable law 10 and
the rules,11 as interpreted in the congressional debates. It set aside the challenged DOLE
Secretary decisions and reinstated her earlier ruling calling for a certification election. The
appellate court declared:

It is clear from the foregoing that while the parties may renegotiate the other provisions
(economic and non-economic) of the CBA, this should not affect the five-year representation
aspect of the original CBA. If the duration of the renegotiated agreement does not coincide
with but rather exceeds the original five-year term, the same will not adversely affect the
right of another union to challenge the majority status of the incumbent bargaining agent
within sixty (60) days before the lapse of the original five (5) year term of the CBA. In the
event a new union wins in the certification election, such union is required to honor and
administer the renegotiated CBA throughout the excess period.

FVCLU-PTGWO moved to reconsider the CA decision but the CA denied the motion in its
resolution of January 15, 2007.12 With this denial, FVCLU-PTGWO now comes before us to
challenge the CA rulings.13 It argues that in light of the peculiar attendant circumstances of
the case, the CA erred in strictly applying Section 11 (11b), Rule XI, Book V of the Omnibus
Rules Implementing the Labor Code, as amended by Department Order No. 9, s. 1997. 14

Apparently, the "peculiar circumstances" the FVCLU-PTGWO referred to relate to the

economic and other provisions of the February 1, 1998 to January 30, 2003 CBA that it
renegotiated with the company. The renegotiated CBA changed the CBAs remaining term
from February 1, 2001 to May 31, 2003. To FVCLU-PTGWO, this extension of the CBA term
also changed the unions exclusive bargaining representation status and effectively moved
the reckoning point of the 60-day freedom period from January 30, 2003 to May 30, 2003.
FVCLU-PTGWO thus moved to dismiss the petition for certification election filed on January
21, 2003 (9 days before the expiry date on January 30, 2003 of the original CBA) by
SANAMA-SIGLO on the ground that the petition was filed outside the authorized 60-day
freedom period.

It also submits in its petition that the SANAMA-SIGLO is estopped from questioning the
extension of the CBA term under the amendments because its members are the very same
ones who approved the amendments, including the expiration date of the CBA, and who
benefited from these amendments.
Lastly, FVCLU-PTGWO posits that the representation petition had been rendered moot by a
new CBA it entered into with the company covering the period June 1, 2003 to May 31,
2008.151avvphi1

Required to comment by the Court16 and to show cause for its failure to comply,17 SANAMA-
SIGLO manifested on October 10, 2007 that: since the promulgation of the CA decision on
July 25, 2006 or three years after the petition for certification election was filed, the local
leaders of SANAMA-SIGLO had stopped reporting to the federation office or attending
meetings of the council of local leaders; the SANAMA-SIGLO counsel, who is also the SIGLO
national president, is no longer in the position to pursue the present case because the local
union and its leadership, who are principals of SIGLO, had given up and abandoned their
desire to contest the representative status of FVCLU-PTGWO; and a new CBA had already
been signed by FVCLU-PTGWO and the company.18 Under these circumstances, SANAMA-
SIGLO contends that pursuing the case has become futile, and accordingly simply adopted
the CA decision of July 25, 2006 as its position; its counsel likewise asked to be relieved
from filing a comment in the case. We granted the request for relief and dispensed with the
filing of a comment.19

THE COURTS RULING

While SANAMA-SIGLO has manifested its abandonment of its challenge to the exclusive
bargaining representation status of FVCLU-PTGWO, we deem it necessary in the exercise of
our discretion to resolve the question of law raised since this exclusive representation status
issue will inevitably recur in the future as workplace parties avail of opportunities to prolong
workplace harmony by extending the term of CBAs already in place.20

The legal question before us centers on the effect of the amended or extended term of the
CBA on the exclusive representation status of the collective bargaining agent and the right
of another union to ask for certification as exclusive bargaining agent. The question arises
because the law allows a challenge to the exclusive representation status of a collective
bargaining agent through the filing of a certification election petition only within 60 days
from the expiration of the five-year CBA.

Article 253-A of the Labor Code covers this situation and it provides:

Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the
parties may enter into, shall, insofar as the representation aspect is concerned, be for a
term of five (5) years. No petition questioning the majority status of the incumbent
bargaining agent shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty day period immediately before
the date of expiry of such five-year term of the Collective Bargaining Agreement. All other
provisions of the Collective Bargaining Agreement shall be renegotiated not later than three
(3) years after its execution.

Any agreement on such other provisions of the Collective Bargaining Agreement entered
into within six (6) months from the date of expiry of the term of such other provisions as
fixed in such Collective Bargaining Agreement, shall retroact to the day immediately
following such date. If any such agreement is entered into beyond six months, the parties
shall agree on the duration of retroactivity thereof. In case of a deadlock in the
renegotiation of the collective bargaining agreement, the parties may exercise their rights
under this Code.
This Labor Code provision is implemented through Book V, Rule VIII of the Rules
Implementing the Labor Code21which states:

Sec. 14. Denial of the petition; grounds. The Med-Arbiter may dismiss the petition on any
of the following grounds:

xxxx

(b) the petition was filed before or after the freedom period of a duly registered collective
bargaining agreement; provided that the sixty-day period based on the original collective
bargaining agreement shall not be affected by any amendment, extension or renewal of the
collective bargaining agreement (underscoring supplied).

xxxx

The root of the controversy can be traced to a misunderstanding of the interaction between
a unions exclusive bargaining representation status in a CBA and the term or effective
period of the CBA.

FVCLU-PTGWO has taken the view that its exclusive representation status should fully be in
step with the term of the CBA and that this status can be challenged only within 60 days
before the expiration of this term. Thus, when the term of the CBA was extended, its
exclusive bargaining status was similarly extended so that the freedom period for the filing
of a petition for certification election should be counted back from the expiration of the
amended CBA term.

We hold this FVCLU-PTGWO position to be correct, but only with respect to the original five-
year term of the CBA which, by law, is also the effective period of the unions exclusive
bargaining representation status. While the parties may agree to extend the CBAs original
five-year term together with all other CBA provisions, any such amendment or term in
excess of five years will not carry with it a change in the unions exclusive collective
bargaining status. By express provision of the above-quoted Article 253-A, the exclusive
bargaining status cannot go beyond five years and the representation status is a legal
matter not for the workplace parties to agree upon. In other words, despite an agreement
for a CBA with a life of more than five years, either as an original provision or by
amendment, the bargaining unions exclusive bargaining status is effective only for five
years and can be challenged within sixty (60) days prior to the expiration of the CBAs first
five years. As we said in San Miguel Corp. Employees UnionPTGWO, et al. v. Confesor, San
Miguel Corp., Magnolia Corp. and San Miguel Foods, Inc., 22 where we cited the
Memorandum of the Secretary of Labor and Employment dated February 24, 1994:

In the event however, that the parties, by mutual agreement, enter into a renegotiated
contract with a term of three (3) years or one which does not coincide with the said five-
year term and said agreement is ratified by majority of the members in the bargaining unit,
the subject contract is valid and legal and therefore, binds the contracting parties. The same
will however not adversely affect the right of another union to challenge the majority status
of the incumbent bargaining agent within sixty (60) days before the lapse of the original five
(5) year term of the CBA.

In the present case, the CBA was originally signed for a period of five years, i.e., from
February 1, 1998 to January 30, 2003, with a provision for the renegotiation of the CBAs
other provisions at the end of the 3rd year of the five-year CBA term. Thus, prior to January
30, 2001 the workplace parties sat down for renegotiation but instead of confining
themselves to the economic and non-economic CBA provisions, also extended the life of the
CBA for another four months, i.e., from the original expiry date on January 30, 2003 to May
30, 2003.

As discussed above, this negotiated extension of the CBA term has no legal effect on the
FVCLU-PTGWOs exclusive bargaining representation status which remained effective only
for five years ending on the original expiry date of January 30, 2003. Thus, sixty days prior
to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a petition for
certification election. Its petition, filed on January 21, 2003 or nine (9) days before the
expiration of the CBA and of FVCLU-PTGWOs exclusive bargaining status, was seasonably
filed.

We thus find no error in the appellate courts ruling reinstating the DOLE order for the
conduct of a certification election. If this ruling cannot now be given effect, the only reason
is SANAMA-SIGLOs own desistance; we cannot disregard its manifestation that the
members of SANAMA themselves are no longer interested in contesting the exclusive
collective bargaining agent status of FVCLU-PTGWO. This recognition is fully in accord with
the Labor Codes intent to foster industrial peace and harmony in the workplace.

WHEREFORE, premises considered, we AFFIRM the correctness of the challenged Decision

and Resolution of the Court of Appeals and accordingly DISMISS the petition, but
nevertheless DECLARE that no certification election, pursuant to the underlying petition for
certification election filed with the Department of Labor and Employment, can be enforced
as this petition has effectively been abandoned.

SO ORDERED.

5. Club v Benjamin bautista

G.R. No. 168406 January 14, 2015

CLUB FILIPINO, INC. and ATTY. ROBERTO F. DE LEON, Petitioners,

vs.
BENJAMIN BAUTISTA, RONIE SUALOG, JOEL CALIDA, JOHNNY ARINTO, CARLITO
PRESENTACION, and ROBERTO DE GUZMAN, Respondents.

RESOLUTION

LEONEN, J.:

This resolves Club Filipino, Inc.'s Supplemental Motion for Reconsideration of this court's
Resolution dated July 13, 2009.
Club Filipino Employees Association (CLUFEA) is a union representing the employees of Club
Filipino, Inc. CLUFEA and Club Filipino, Inc. entered into previous collective bargaining
agreements, the last of which expired on May 31, 2000.1

Before CLUFEA and Club Filipino, Inc.s last collective bargaining agreement expired and
within the 60-day freedom period,2 CLUFEA had made several demands on Club Filipino,
Inc. to negotiate a new agreement. Club Filipino, Inc., however, replied that its Board of
Directors could not muster a quorum to negotiate with CLUFEA. 3

CLUFEA then formally submitted its proposals to Club Filipino Inc.s negotiating panel
sometime in June 2000. Still, Club Filipino, Inc. failed to negotiate, citing as reason the
illness of the chairperson of its negotiating panel.4

To compel Club Filipino, Inc. to negotiate with it, CLUFEA filed before the National
Conciliation and Mediation Board (NCMB) a request for preventive mediation. The
negotiating panels of CLUFEA and Club Filipino, Inc. finally met on April 5, 2001. However,
the meeting ended with the parties respective panels declaring a deadlock in negotiation. 5

Thus, on April 6, 2001, CLUFEA filed with the NCMB a Notice of Strike on the ground of
bargaining deadlock. Club Filipino, Inc. submitted the first part of its counterproposal on
April 22, 2001.6

On May 4, 2001, CLUFEA conducted a strike vote under the Department of Labor and
Employments supervision with the majority of CLUFEAs total union membership voting to
strike.7

On May 11, 2001, Club Filipino, Inc. submitted to CLUFEA the second part of its
counterproposal, which CLUFEA countered with an improved offer. Club Filipino, Inc.,
however, refused CLUFEAs improved offer.8

On May 26, 2001, CLUFEA staged a strike on the ground of bargaining deadlock.9

On May 31, 2001, Club Filipino, Inc. filed before the National Capital Regional Arbitration
Branch of the National Labor Relations Commission (NLRC) a Petition to Declare [CLUFEAs]
Strike Illegal.10 According to Club Filipino, Inc., CLUFEA failed to file a Notice of Strike and
to conduct a strike vote, in violation of the legal requirements for staging a strike.11 Worse,
CLUFEAs members allegedly committed illegal acts while on strike, preventing their co-
workers from entering and leaving Club Filipino, Inc.s premises and even cutting off Club
Filipino, Inc.s electricity and water supply on the first day of the strike. 12 Club Filipino, Inc.
prayed that all of CLUFEAs officers who participated in the strike be declared to have lost
their employment pursuant to Article 264(a) of the Labor Code.13

CLUFEA answered Club Filipino, Inc.s Petition with the following officers verifying the
Answer: Benjamin Bautista, President (Bautista); Danilo Caluag, Vice President (Caluag);
Ronie Sualog, Secretary (Sualog); and Joel Calida, Treasurer (Calida).14

Labor Arbiter Manuel P. Asuncion decided Club Filipino, Inc.s Petition for declaration of
illegal strike.15 He found that CLUFEAs Notice of Strike did not contain CLUFEAs written
proposals and Club Filipino, Inc.s counterproposals, in violation of then Rule XXII, Section 4
of the Omnibus Rules Implementing the Labor Code.16 The rule provided:
In cases of bargaining deadlocks, the notice shall, as far as practicable, further state the
unresolved issues in the bargaining negotiations and be accompanied by the written
proposals of the union, the counter-proposals of the employer and the proof of a request for
conference to settle differences. In cases of unfair labor practices, the notice shall, as far as
practicable, state the acts complained of, and efforts taken to resolve the dispute amicably.

Any notice which does not conform with the requirements of this and the foregoing section
shall be deemed as not having been filed and the party concerned shall be so informed by
the regional branch of the Board.

Thus, in the Decision17 dated November 28, 2001, the Labor Arbiter declared CLUFEAs
strike "procedurally infirm"18for CLUFEAs failure to comply with the procedural requirements
for staging a strike. The Labor Arbiter declared the strike illegal and considered "all the
officers of the union . . . terminated from service."19 Because of the retrenchment program
Club Filipino, Inc. allegedly launched before the Labor Arbiter issued his Decision, the
dismissed union officers were ordered to receive separation pay "similar in terms with those
offered to the employees affected by the retrenchment program of the club."20

On December 20, 2001, CLUFEA appealed the Labor Arbiters Decision before the National
Labor Relations Commission (NLRC) with Bautista, Caluag, Sualog, and Calida verifying the
Memorandum of Appeal on CLUFEAs behalf.21

The NLRC ruled that CLUFEAs Appeal was filed by persons "[having] no legal standing to
question the [Labor Arbiters] decision."22 Bautista had allegedly resigned from Club Filipino,
Inc. on September 30, 2001, receiving separation benefits pursuant to Club Filipino, Inc.s
Employees Retirement Plan.23

For their part, Caluag, Sualog, and Calida allegedly misrepresented themselves as CLUFEAs
officers when they appealed to the NLRC. According to the NLRC, CLUFEA had already
elected a new set of officers on September 28, 2001. Caluag, Sualog, and Calida, therefore,
were no longer CLUFEAs officers when they filed the Appeal on December 20, 2001.24

Finding that CLUFEA no longer wished to appeal the Labor Arbiters Decision, the NLRC cited
a letter the new officers of CLUFEA allegedly gave Atty. Roberto F. De Leon, Club Filipino,
Inc.s President:

Nais po naming ipabatid na ang ginawad na pagpapasya ng NLRC na naging ilegal ang
pagdaos ng pag-aalsa noong Mayo 26, 2001 ay hindi lingid sa aming kaalaman at
kamiylubos na nalulungkot para doon sa mga kasaping opisyal na nasangkot at humantong
sa ganito ng dahil na rin sa kanilang kapabayaan, mga padalos-dalos at mapusok na
pagkilos na walang pagkunsulta sa mga miyembro. Ang pamunuan sampu ng aming mga
kasapi ay mariing tinututulan ang ano mang uri ng pagaapela upang maisalba ang
natitirang miyembro sa tiyak na kapahamakan kung magpapatuloy and [sic]ganitong uri ng
tagisan ng bawat isa.25

Lastly, the NLRC found that as of November 23, 2001, CLUFEA had terminated the services
of its legal counsel.26Yet, its former legal counsel filed and signed CLUFEAs Memorandum of
Appeal to the NLRC. The Memorandum of Appeal, therefore, was filed without authority of
CLUFEA.
Thus, in the Decision27 dated September 30, 2002, the NLRC denied the Appeal filed on
December 20, 2001 for lack of merit.

Club Filipino, Inc. filed a Motion for Partial Reconsideration, while Bautista, Caluag, Sualog,
and Calida filed a Motion for Reconsideration of the NLRCs Decision dated September 30,
2002. Johnny Arinto (Arinto), Roberto de Guzman (de Guzman), and Laureno Fegalquin
(Fegalquin), all directors and officers of CLUFEA,28 joined Bautista, Caluag, Sualog, and
Calida in filing the Motion for Reconsideration.29

The NLRC denied the Motions in the Resolution30 dated July 15, 2003.

On September 22, 2003, Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin filed a
Petition for Certiorari with the Court of Appeals.31 However, Caluag no longer joined his
colleagues. Instead, Carlito Presentacion (Presentacion), a CLUFEA member, joined in the
filing of the Petition for Certiorari.

The Court of Appeals first resolved whether Bautista, Sualog, Calida, Arinto, de Guzman,
and Fegalquin had legal personality to appeal before the NLRC. On this issue, the Court of
Appeals ruled that "a worker ordered dismissed under a tribunals decision has every right
to question his or her dismissal especially if he [or she] had not been properly impleaded in
the case and in the decision that decreed his or her dismissal." 32 Being officers of CLUFEA,
Bautista, et al. had the right to appeal the loss of their employment with the NLRC.

With respect to Arinto, de Guzman, and Fegalquin, the Court of Appeals further ruled that
they were not granted "the full hearing that the due process requirements of the Philippine
Constitution impose."33 Arinto, de Guzman, and Fegalquin participated only during the
Motion for Reconsideration stage with the NLRC. The Labor Arbiters Decision, therefore, did
not bind Arinto, de Guzman, and Fegalquin.

On the merits, the Court of Appeals held that the Labor Arbiter gravely abused his discretion
in declaring CLUFEAs strike illegal. The Court of Appeals ruled that the requirements under
Rule XXII, Section 4 of the Omnibus Rules Implementing the Labor Code "[do] not appear
to be absolute."34 Rule XXII, Section 4 only requires that the proposals and
counterproposals be attached to the Notice of Strike "as far as practicable." 35 Since CLUFEA
had already filed a Notice of Strike when Club Filipino, Inc. submitted its counterproposals,
it was not practicable for CLUFEA to attach Club Filipino, Inc.s counterproposals to the
Notice of Strike.

The Court of Appeals found that the Labor Arbiter "disregarded"36 the law on the status of
employees who participated in an illegal strike. Under the law, union officers may be
dismissed for participating in an illegal strike only if they knowingly participated in it.
According to the Court of Appeals, the Labor Arbiter erred in ordering all the officers of
CLUFEA dismissed from the service without even naming these officers and specifying the
acts these officers committed that rendered the strike illegal.

The Court of Appeals, however, found that Bautista and Fegalquin had already resigned
during the pendency of the case and had received separation benefits from Club Filipino,
Inc. Bautista and Fegalquin, therefore, "no longer [had] any legal interest [in filing the
petition for certiorari]."37
As for Presentacion, the Court of Appeals found that he was not an officer of CLUFEA and
was not dismissed by virtue of the Labor Arbiters Decision. He, therefore, had no
personality to join Bautista, Sualog, Calida, Arinto, de Guzman, and Fegalquin in filing the
Petition for Certiorari. As for Sualog, Calida, Arinto, and de Guzman, the Court of Appeals
ruled that the Labor Arbiters Decision was void.

Thus, in the Decision38 dated May 31, 2005, the Court of Appeals granted the Petition for
Certiorari with respect to Sualog, Calida, Arinto, and de Guzman. The Court of Appeals set
aside the Labor Arbiters Decision for being null and void and ordered the payment of full
backwages and benefits to them from the time of their dismissal up to the finality of the
Court of Appeals Decision. In lieu of reinstatement, the Court of Appeals ordered Club
Filipino, Inc. to pay Sualog, Calida, Arinto, and de Guzman separation pay computed at one
(1) month salary per year of service from the time of their hiring up to the finality of the
Decision less any amount Sualog, Calida, Arinto, and de Guzman may have received
pursuant to the Labor Arbiters Decision.

As for Bautista, Fegalquin, and Presentacion, the Court of Appeals dismissed the Petition for
Certiorari.39

On June 23, 2005, Club Filipino, Inc. filed a Petition for Review on Certiorari 40 with this
court. Bautista, Sualog, Calida, Arinto, Presentacion, and de Guzman filed their
Comment41 to which Club Filipino, Inc. replied.42

After the parties had filed their respective memoranda, 43 this court considered this case
submitted for decision.44

This court agreed with the Court of Appeals Decision. This court ruled that CLUFEA could
not have attached Club Filipino, Inc.s counterproposals in the Notice of Strike since Club
Filipino, Inc. submitted it only after CLUFEA had filed the Notice of Strike. It was, therefore,
"not practicable"45 for CLUFEA to attach Club Filipino, Inc.s counterproposal to the Notice of
Strike. CLUFEA did not violate Rule XXII, Section 4 of the Omnibus Rules Implementing the
Labor Code.

This court sustained the Court of Appeals finding that the Labor Arbiter gravely abused his
discretion in ordering the "wholesale dismissal"46 of CLUFEAs officers. According to this
court, the law requires "knowledge [of the illegality of the strike] as a condition sine qua
non before a union officer can be dismissed . . . for participating in an illegal
strike."47 However, "[n]owhere in the ruling of the labor arbiter can [there be found] any
discussion of how respondents, as union officers, knowingly participated in the alleged
illegal strike. Thus, even assuming . . . that the strike was illegal, [the] automatic dismissal
[of CLUFEAs officers] had no basis."48

Thus, in the Resolution49 dated July 13, 2009, this court denied Club Filipino, Inc.s Petition
for Review on Certiorari.

On August 17, 2009, Club Filipino, Inc. filed a Motion for Reconsideration,50 which this court
denied with finality in the Resolution 51 dated September 9, 2009. This court declared that it
shall not entertain any further pleadings or motions and ordered that Entry of Judgment in
this case be made in due course.52
On September 14, 2009, Solis Medina Limpingco and Fajardo entered its appearance for
Club Filipino, Inc.53 and simultaneously filed a Motion for Leave54 to file and admit the
attached Supplemental Motion for Reconsideration.55

On November 3, 2009, Club Filipino, Inc. filed its Motion for Leave to File and Admit further
Pleading/Motion,56alleging that this court failed to consider its Supplemental Motion for
Reconsideration in issuing its September 9, 2009 Resolution denying Club Filipino, Inc.s
first Motion for Reconsideration. Club Filipino, Inc. prayed that this court resolve the
Supplemental Motion for Reconsideration.

In the Resolution57 dated January 11, 2010, this court granted Club Filipino, Inc.s Motions
for Leave and noted the Supplemental Motion for Reconsideration.

However, because of this courts Resolution dated September 9, 2009, an Entry of

Judgment58 was issued on October 26, 2010, declaring that this case had become final and
executory as of October 26, 2009. This court likewise ordered the return of the case records
to the Court of Appeals for remand to the court of origin.59

Club Filipino, Inc. received the Entry of Judgment on November 10, 2010. 60 Nine (9) days
after, Club Filipino, Inc. filed a Manifestation and Motion,61 arguing that the court
prematurely issued the Entry of Judgment because it still had to resolve the Supplemental
Motion for Reconsideration.

This court noted the Manifestation and Motion in the Resolution 62 dated January 19, 2011.
On October 18, 2011, Club Filipino, Inc. filed a very urgent Motion to Resolve,63 alleging
that respondents filed a Motion for Execution of this courts Decision on the illegal strike
case despite the pendency of its Supplemental Motion for Reconsideration with this court.
Club Flipino, Inc. prayed that this court resolve the Supplemental Motion for Reconsideration
in order not to render the filing of its Supplemental Motion for Reconsideration moot.

In the Resolution64 dated November 23, 2011, this court noted the very urgent Motion to
Resolve.

On March 23, 2012, Club Filipino, Inc. filed the very urgent Motion for Leave to File and
Admit very urgent Motion for Clarification.65 It informed this court that the NLRC granted
respondents Motion for Execution, which would allegedly result in Club Filipino, Inc. paying
respondents separation pay twice. Because of the "extreme urgency" 66brought about by the
developments in this case, Club Filipino, Inc. prayed that this court resolve its Supplemental
Motion for Reconsideration.

On April 2, 2012, Club Filipino, Inc. filed a second very urgent Motion for
Clarification,67 pleading the court to clarify its January 11, 2010 Resolution noting the
Supplemental Motion for Reconsideration. It reiterated its claim that implementing the Writ
of Execution in the illegal strike case "will only result in doubly compensating respondents to
the utmost prejudice and manifest injustice of [Club Filipino, Inc.]." 68

Club Filipino, Inc. subsequently filed the very urgent Manifestation and Omnibus
Motion,69 very urgent Omnibus Motion,70 and second very urgent Omnibus Motion,71 all
arguing that the implementation of the Writ of Execution would result in double
compensation to respondents. All of these Motions were noted by this court.
In the Supplemental Motion for Reconsideration and the subsequent Motions to Resolve,
Club Filipino, Inc. maintains that this court erred in affirming the Court of Appeals award of
backwages and separation pay in the illegal strike case on top of the separation pay
respondents received by virtue of Club Filipino, Inc.s retrenchment program.

Club Filipino, Inc. alleged that pending its Petition for declaration of illegal strike with the
NLRC, it implemented a retrenchment program to minimize its "mounting losses." 72 Among
the 76 retrenched employees were respondents.

Respondents, together with other retrenched employees, filed a Complaint for illegal
dismissal with the NLRC, questioning the validity of the retrenchment program. In the
Decision73 dated October 2, 2002, Labor Arbiter Natividad M. Roma dismissed the Complaint
and found the retrenchment program valid. She ordered that the retrenched employees,
which included respondents, be paid their separation pay.

Labor Arbiter Natividad M. Romas Decision was affirmed by the NLRC in the Decision dated
February23, 2004. The NLRCs Decision became final and executory on March 27, 2004.
Considering that the NLRC had finally resolved that respondents were not illegally dismissed
and had already ordered that respondents be paid separation pay under the retrenchment
program, Club Filipino, Inc. argues that the NLRCs Resolution of the issue constituted res
judicata as to bar the Court of Appeals from declaring that respondents were illegally
dismissed and from awarding respondents separation pay in the illegal strike case.

The issues for our Resolution are:

(1) Whether Club Filipino, Inc.s filing of the Supplemental Motion for Reconsideration
prevented our Resolution dated July 13, 2009 from becoming final and executory;
and

(2) Whether the NLRCs Decision on the illegal dismissal case was res judicata on the
illegal strike case.

The Supplemental Motion for Reconsideration must be denied with finality.

The filing of the Supplemental Motion for

Reconsideration did not prevent this
courts Resolution dated July 13, 2009
from becoming final and executory.

Petitioner Club Filipino, Inc.s Supplemental Motion for Reconsideration of the Resolution
dated July 13, 2009 is in the nature of a second Motion for Reconsideration.

As a general rule, the filing of second Motions for Reconsideration of a judgment or final
resolution is prohibited. Rule 52, Section 2 of the Rules of Court provides:

Section 2. Second motion for reconsideration. No second motion for reconsideration of a

judgment or final resolution by the same party shall be entertained.
This prohibition is reiterated in Rule 15, Section 3 of the Internal Rules of the Supreme
Court: Section 3. Second motion for reconsideration. The Court shall not entertain a
second motion for reconsideration, and any exception to this rule can only be granted in the
higher interest of justice by the Court en banc upon a vote of at least two-thirds of its actual
membership. There is reconsideration "in the higher interest of justice" when the assailed
decision is not only legally erroneous, but is likewise patently unjust and potentially capable
of causing unwarranted and irremediable injury or damage to the parties. A second motion
for reconsideration can only be entertained before the ruling sought to be reconsidered
becomes final by operation of law or by the Courts declaration.

In the Division, a vote of three Members shall be required to elevate a second motion for
reconsideration to the Court En Banc.

For this court to entertain second Motions for Reconsideration, the second Motions must
present "extraordinarily persuasive reasons and only upon express leave first
obtained."74 Once leave to file is granted, the second Motion for Reconsideration is no longer
prohibited.75

This court explained the rationale for the rule in Ortigas and Company Limited Partnership
v. Judge Velasco,76 thus:

A second motion for reconsideration is forbidden except for extraordinarily persuasive

reasons, and only upon express leave first obtained. The propriety or acceptability of such a
second motion for reconsideration is not contingent upon the averment of "new" grounds to
assail the judgment, i.e., grounds other than those theretofore presented and rejected.
Otherwise, attainment of finality of a judgment might be staved off indefinitely, depending
on the party's ingeniousness or cleverness in conceiving and formulating "additional flaws"
or "newly discovered errors" therein, or thinking up some injury or prejudice to the rights of
the movant for reconsideration. "Piece-meal" impugnation of a judgment by successive
motions for reconsideration is anathema, being precluded by the salutary axiom that a party
seeking the setting aside of a judgment, act or proceeding must set out in his motion all the
grounds therefor, and those not so included are deemed waived and cease to be available
for subsequent motions.

For all litigation must come to an end at some point, in accordance with established rules of
procedure and jurisprudence. As a matter of practice and policy, courts must dispose of
every case as promptly as possible; and in fulfillment of their role in the administration of
justice, they should brook no delay in the termination of cases by stratagems or
maneuverings of parties or their lawyers.77

In the present case, this court granted leave to petitioner Club Filipino, Inc. to file the
Supplemental Motion for Reconsideration in the Resolution dated January 11, 2010. The
Supplemental Motion for Reconsideration, therefore, is no longer prohibited.

The grant of leave to file the Supplemental Motion for Reconsideration, however, did not
prevent this courts July 13, 2009 Resolution from becoming final and executory. A decision
or resolution of this court is deemed final and executory after the lapse of 15 days from the
parties receipt of a copy of the decision or resolution. 78 The grant of leave to file the second
Motion for Reconsideration does not toll this 15-day period. It only means that the Entry of
Judgment first issued may be lifted should the second Motion for Reconsideration be
granted.79
In Aliviado v. Procter and Gamble Philippines, Inc.80 this court explained that:

[i]t is immaterial that the Entry of Judgment was made without the Court having first
resolved P&Gs second motion for reconsideration. This is because the issuance of the entry
of judgment is reckoned from the time the parties received a copy of the resolution denying
the first motion for reconsideration. The filing by P&G of several pleadings after receipt of
the resolution denying its first motion for reconsideration does not in any way bar the
finality or entry of judgment. Besides, to reckon the finality of a judgment from receipt of
the denial of the second motion for reconsideration would be absurd. First, the Rules of
Court and the Internal Rules of the Supreme Court prohibit the filing of a second motion for
reconsideration. Second, some crafty litigants may resort to filing prohibited pleadings just
to delay entry of judgment.81 (Underscoring in the original, emphasis supplied)

This case became final and executory on October 26, 2009, after the lapse of the 15th day
from petitioner Club Filipino, Inc.s receipt of the Resolution denying its first Motion for
Reconsideration. Entry of Judgment, therefore, was in order.

Since this court did not issue any temporary restraining order to enjoin the execution of the
Court of Appeals Decision, the NLRC correctly proceeded in implementing the Court of
Appeals Decision in the illegal strike case.

II

The NLRCs Decision on the illegal

dismissal case was not res judicata on the
illegal strike case.

Res judicata "literally means a matter adjudged; a thing judicially acted upon or decided;
[or] a thing or matter settled by judgment."82 Res judicata" lays the rule that an existing
final judgment or decree rendered on the merits, and without fraud or collusion, by a court
of competent jurisdiction, upon any matter within its jurisdiction,is conclusive of the rights
of the parties or their privies, in all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and matters in issue in the first suit." 83

Res judicata has two (2) aspects. The first is bar by prior judgment that precludes the
prosecution of a second action upon the same claim, demand or cause of action. 84 The
second aspect is conclusiveness of judgment, which states that "issues actually and directly
resolved in a former suit cannot again be raised in any future case between the same
parties involving a different cause of action."85

The elements of res judicata are:

(1) the judgment sought to bar the new action must be final;

(2) the decision must have been rendered by a court having jurisdiction over the
subject matter and the parties;

(3) the disposition of the case must be a judgment on the merits; and

(4) there must be as between the first and second action identity of parties, subject
matter, and causes of action.86
The first three (3) elements of res judicata are present in this case.

The NLRCs judgment on the illegal dismissal case is already final with respondents not
having appealed the Decision within the reglementary period.

The Labor Arbiter, who has the exclusive original jurisdiction to hear, try, and decide illegal
dismissal cases,87decided the case. The Labor Arbiters Decision was heard on appeal by the
NLRC, which has exclusive appellate jurisdiction over all cases decided by Labor Arbiters. 88

The Labor Arbiters judgment was on the merits.89 Based on the facts presented by the
parties, the Labor Arbiter ruled that petitioner Club Filipino, Inc.s retrenchment program
was valid.

The fourth element of res judicata, however, is absent. Although the cases have
substantially identical parties and subject matter of the dismissal of respondents, the cause
of action for declaration of illegal strike and the cause of action for illegal dismissal are
different.

A cause of action is "the act or omission by which a party violates the rights of
another."90 Its elements are:

1) a right in favor of the plaintiff by whatever means and under whatever law it
arises or is created;

2) an obligation on the part of the named defendant to respect or not to violate such
right; and 3) act or omission on the part of such defendant in violation of the right of
the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff
for which the latter may maintain an action for recovery of damages or other
appropriate relief.91

In an action for declaration of illegal strike, the cause of action is premised on a union or a
labor organizations conduct of a strike without compliance with the statutory
requirements.92

On the other hand, in an action for illegal dismissal, the cause of action is premised on an
employers alleged dismissal of an employee without a just or authorized cause as provided
under Articles 282, 283, and 284 of the Labor Code. 93

There is no res judicata in the present case. Petitioner Club Filipino, Inc. filed the illegal
strike because members of CLUFEA allegedly disrupted petitioner Club Filipino, Inc.s
business when they staged a strike without complying with the requirements of the law. For
their part, respondents filed the illegal dismissal case to question the validity of petitioner
Club Filipino, Inc.s retrenchment program.

Although there is no res judicata, the actions have the same subject matter.1wphi1 The
subject matter of an action is "the matter or thing from which the dispute has
arisen."94 Both the illegal strike and illegal dismissal cases involve the dismissal of
respondents. In respondents action for illegal dismissal, respondents were found to have
been dismissed by virtue of a valid retrenchment program. The NLRC then ordered that they
be paid separation pay based on the parties collective bargaining agreement.
In petitioner Club Filipino, Inc.s action for declaration of illegal strike, the Labor Arbiters
finding that respondents conducted an illegal strike resulted in their dismissal. Respondents
were ordered to receive separation pay "similar in terms with those offered to the
employees affected by the retrenchment program of the club."95 The Court of Appeals,
however, found that the Labor Arbiter gravely abused his discretion in declaring the strike
illegal. It then reversed the Labor Arbiters Decision and awarded some of the respondents
full backwages, benefits, and separation pay.

Because of the cases similar subject matter, it was possible that an employee who had
already availed of the benefits under the retrenchment program would be declared entitled
to separation benefits under the illegal strike case. This is true especially if the retrenched
employee did not execute a valid quitclaim upon receiving the benefits under the
retrenchment program.

Thus, to prevent double compensation, the Court of Appeals ordered that those who already
retired and received their benefits may no longer claim full backwages, benefits, and
separation pay under the decision in the illegal strike case. This is with respect to
respondents Benjamin Bautista and Laureno Fegalquin who already executed their
quitclaims. The Court of Appeals said:

We agree in theory with the petitioners position that workers releases and quitclaims are
frowned upon and cannot simply be accepted at face value. Jurisprudence however provides
us guidance on when to accept and when to reject workers releases and quitclaims. In the
present case where the recipients are responsible union officers who have regularly acted in
behalf of their members in the discharge of their union duties and where there is no direct
evidence of coercion or vitiation of consent, we believe we can safely conclude that the
petitioners Bautista and Fegalquin fully knew that they entered into when they accepted
their retirement benefits and when they executed their quitclaims. The Club (as well as the
NLRC) is therefore correct in their position that these petitioners no longer have any interest
that can serve as basis for their participation in the present petition. 96 (Citations omitted)

With respect to respondent Carlito Presentacion who was not a union officer and, therefore,
could not have been dismissed under the illegal strike case, the Court of Appeals held that
he cannot receive benefits under Court of Appeals Decision:

The same is true with respect to petitioner Carlito Presentacion who does not appear to be
covered by the assailed Labor Arbiter and NLRC decisions because he was not a union
officer and was not dismissed under the assailed decisions, and who had sought redress
through a separately-filed case.97

For respondents who were not found to have executed a quitclaim with respect to the
benefits under the retrenchment program, the Court of Appeals ruled that any benefits
received" as a result of the decisions [of the Labor Arbiter]"98 must be deducted from the
separation pay received under the illegal strike case. This is with respect to Ronie Sualog,
Joel Calida, Roberto de Guzman, and Johnny Arinto:

We grant the petition and declare the assailed decision null and void with respect to
petitioners Ronie Sualog, Joel Calida, Roberto de Guzman and Johnny Arinto as the decision
to dismiss them had been attended by grave abuse of discretion on the part of the Labor
Arbiter and the NLRC as discussed above. In the exercise of our discretion, however, we
stop short of ordering the reinstatement of these petitioners [sic] in light of their obviously
strained relationship with the Club resulting from the strike and in light as well of the
restructuring of the Clubs workforce since then. We confine our order therefore to the
payment of the petitioners full backwages and benefits from the time of their dismissal up
the finality of this Decision, and to the payment of petitioners' separation pay computed at
one (1) month salary per year of service from the time they were hired up to the finality of
this Decision. Any amount they might have received from the Club as a result of the
decisions below can be deducted from the payments we hereby find to be due them. 99

Since the Court of Appeals ordered that any benefit received from the illegal dismissal case
be deducted from any benefit receivable under the Court of Appeals' Decision, there was no
"double compensation" as petitioner Club Filipino, Inc. claims.

All told, the Decision in the illegal dismissal case was not res judicata on the illegal strike
case. The NLRC correctly executed the Court of Appeals' Decision in the illegal strike case.
WHEREFORE, the Supplemental Motion for Reconsideration is DENIED. No further pleadings
shall be entertained in this case. The Entry of Judgment issued in this case is AFFIRMED.

SO ORDERED.