CASE 2012-0022: PEOPLE’S BROADCASTING SERVICE (BOMBO RADYO PHILS., INC. VS. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, AND JANDELEON JUEZAN (G.R. NO. 179652, MARCH 6, 2012, VELASCO, JR., J.) SUBJECT: IN THE EXERCISE OF THE DOLE’S VISITORIAL AND ENFORCEMENT POWER, THE LABOR SECRETARY OR THE LATTER’S AUTHORIZED REPRESENTATIVE SHALL HAVE THE POWER TO DETERMINE THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP, TO THE EXCLUSION OF THE NLRC.   (BRIEF TITLE: PEOPLE’S BROADCASTING VS. DOLE SECRETARY).

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DISPOSITIVE:

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power, the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC. 

SO ORDERED.

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Republic of thePhilippines

SUPREME COURT

Manila

EN BANC

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R E S O L U T I O N

VELASCO, JR., J.:

          In a Petition for Certiorari under Rule 65, petitioner People’s Broadcasting Service, Inc. (Bombo Radyo Phils., Inc.) questioned the Decision and Resolution of the Court of Appeals (CA) dated October 26, 2006 and June 26, 2007, respectively, in C.A. G.R. CEB-SP No. 00855.

 Private respondent Jandeleon Juezan filed a complaint against petitioner with the Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and noncoverage of SSS, PAG-IBIG and Philhealth.^[1][1]  After the conduct of summary investigations, and after the parties submitted their position papers, the DOLE Regional Director found that private respondent was an employee of petitioner, and was entitled to his money claims.^[2][2]  Petitioner sought reconsideration of the Director’s Order, but failed. The Acting DOLE Secretary dismissed petitioner’s appeal on the ground that petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or surety bond.  When the matter was brought before the CA, where petitioner claimed that it had been denied due process, it was held that petitioner was accorded due process as it had been given the opportunity to be heard, and that the DOLE Secretary had jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of the Labor Code on the power of the DOLE Secretary under Art. 128(b) of the Code had been repealed by Republic Act No. (RA) 7730.^[3][3]

          In the Decision of this Court, the CA Decision was reversed and set aside, and the complaint against petitioner was dismissed.  The dispositive portion of the Decision reads as follows:

WHEREFORE, the petition is GRANTED.  The Decision dated 26 October 2006 and the Resolution dated 26 June 2007 of the Court of Appeals in C.A. G.R. CEB-SP No. 00855 are REVERSED and SET ASIDE.  The Order of the then Acting Secretary of the Department of Labor and Employment dated 27 January 2005 denying petitioner’s appeal, and the Orders of the Director, DOLE Regional Office No. VII, dated 24 May 2004 and 27 February 2004, respectively, are ANNULLED.  The complaint against petitioner is DISMISSED.^[4][4]

The Court found that there was no employer-employee relationship between petitioner and private respondent.  It was held that while the DOLE may make a determination of the existence of an employer-employee relationship, this function could not be co-extensive with the visitorial and enforcement power provided in Art. 128(b) of the Labor Code, as amended by RA 7730.  The National Labor Relations Commission (NLRC) was held to be the primary agency in determining the existence of an employer-employee relationship.  This was the interpretation of the Court of the clause “in cases where the relationship of employer-employee still exists” in Art. 128(b).^[5][5]

From this Decision, the Public Attorney’s Office (PAO) filed a Motion for Clarification of Decision (with Leave of Court).  The PAO sought to clarify as to when the visitorial and enforcement power of the DOLE be not considered as co-extensive with the power to determine the existence of an employer-employee relationship.^[6][6]  In its Comment,^[7][7] the DOLE sought clarification as well, as to the extent of its visitorial and enforcement power under the Labor Code, as amended.

The Court treated the Motion for Clarification as a second motion for reconsideration, granting said motion and reinstating the petition.^[8][8]  It is apparent that there is a need to delineate the jurisdiction of the DOLE Secretary vis-à-vis that of the NLRC.

Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized hearing officers to hear and decide any matter involving the recovery of wages and other monetary claims and benefits was qualified by the proviso that the complaint not include a claim for reinstatement, or that the aggregate money claims not exceed PhP 5,000.  RA 7730, or an Act Further Strengthening the Visitorial and Enforcement Powers of the Secretary of Labor, did away with the PhP 5,000 limitation, allowing the DOLE Secretary to exercise its visitorial and enforcement power for claims beyond PhP 5,000.  The only qualification to this expanded power of the DOLE was only that there still be an existing employer-employee relationship.

It is conceded that if there is no employer-employee relationship, whether it has been terminated or it has not existed from the start, the DOLE has no jurisdiction.  Under Art. 128(b) of the Labor Code, as amended by RA 7730, the first sentence reads, “Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection.”  It is clear and beyond debate that an employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE.  The question now arises, may the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to what extent?

The first portion of the question must be answered in the affirmative.

The prior decision of this Court in the present case accepts such answer, but places a limitation upon the power of the DOLE, that is, the determination of the existence of an employer-employee relationship cannot be co-extensive with the visitorial and enforcement power of the DOLE.  But even in conceding the power of the DOLE to determine the existence of an employer-employee relationship, the Court held that the determination of the existence of an employer-employee relationship is still primarily within the power of the NLRC, that any finding by the DOLE is merely preliminary.

This conclusion must be revisited.

No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee relationship.  No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC.  The law did not say that the DOLE would first seek the NLRC’s determination of the existence of an employer-employee relationship, or that should the existence of the employer-employee relationship be disputed, the DOLE would refer the matter to the NLRC.  The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730.

The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to follow, the same guide the courts themselves use.  The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s power to control the employee’s conduct.^[9][9]  The use of this test is not solely limited to the NLRC. The DOLE Secretary, or his or her representatives, can utilize the same test, even in the course of inspection, making use of the same evidence that would have been presented before the NLRC.

The determination of the existence of an employer-employee relationship by the DOLE must be respected.  The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC.  The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction.  But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship.

If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC.  The DOLE would have no jurisdiction only if the employer-employee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first place.

The Court, in limiting the power of the DOLE, gave the rationale that such limitation would eliminate the prospect of competing conclusions between the DOLE and the NLRC.  The prospect of competing conclusions could just as well have been eliminated by according respect to the DOLE findings, to the exclusion of the NLRC, and this We believe is the more prudent course of action to take.

This is not to say that the determination by the DOLE is beyond question or review.  Suffice it to say, there are judicial remedies such as a petition for certiorari under Rule 65 that may be availed of, should a party wish to dispute the findings of the DOLE.

It must also be remembered that the power of the DOLE to determine the existence of an employer-employee relationship need not necessarily result in an affirmative finding.  The DOLE may well make the determination that no employer-employee relationship exists, thus divesting itself of jurisdiction over the case.  It must not be precluded from being able to reach its own conclusions, not by the parties, and certainly not by this Court.

Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the NLRC.

There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with the labor arbiter, under Art. 217.  The view states that despite the wording of Art. 128(b), this would only apply in the course of regular inspections undertaken by the DOLE, as differentiated from cases under Arts. 129 and 217, which originate from complaints.  There are several cases, however, where the Court has ruled that Art. 128(b) has been amended to expand the powers of the DOLE Secretary and his duly authorized representatives by RA 7730.   In these cases, the Court resolved that the DOLE had the jurisdiction, despite the amount of the money claims involved.  Furthermore, in these cases, the inspection held by the DOLE regional director was prompted specifically by a complaint.  Therefore, the initiation of a case through a complaint does not divest the DOLE Secretary or his duly authorized representative of jurisdiction under Art. 128(b).

To recapitulate, if a complaint is brought before the DOLE to give effect to the labor standards provisions of the Labor Code or other labor legislation, and there is a finding by the DOLE that there is an existing employer-employee relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC.  If the DOLE finds that there is no employer-employee relationship, the jurisdiction is properly with the NLRC.  If a complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code, which provides that the Labor Arbiter has original and exclusive jurisdiction over those cases involving wages, rates of pay, hours of work, and other terms and conditions of employment, if accompanied by a claim for reinstatement.  If a complaint is filed with the NLRC, and there is still an existing employer-employee relationship, the jurisdiction is properly with the DOLE.  The findings of the DOLE, however, may still be questioned through a petition for certiorari under Rule 65 of the Rules of Court.

In the present case, the finding of the DOLE Regional Director that there was an employer-employee relationship has been subjected to review by this Court, with the finding being that there was no employer-employee relationship between petitioner and private respondent, based on the evidence presented.  Private respondent presented self-serving allegations as well as self-defeating evidence.^[10][10]  The findings of the Regional Director were not based on substantial evidence, and private respondent failed to prove the existence of an employer-employee relationship.  The DOLE had no jurisdiction over the case, as there was no employer-employee relationship present.  Thus, the dismissal of the complaint against petitioner is proper.

WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with the MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power, the Labor Secretary or the latter’s authorized representative shall have the power to determine the existence of an employer-employee relationship, to the exclusion of the NLRC. 

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

            ANTONIO T. CARPIO                           TERESITA J. LEONARDO-DE CASTRO                                Associate Justice                                             Associate Justice

                 ARTURO D. BRION                                        DIOSDADO M. PERALTA

                      Associate Justice                                                 Associate Justice

                                                                             (On official leave)

LUCAS P. BERSAMIN                                   MARIANO C. DEL CASTILLO

        Associate Justice                                             Associate Justice

  ROBERTO A. ABAD                             MARTIN S. VILLARAMA, JR.

        Associate Justice                                              Associate Justice

          JOSE PORTUGAL PEREZ                          JOSE CATRAL MENDOZA

                     Associate Justice                                                Associate Justice

MARIA LOURDES P. A. SERENO                 BIENVENIDO L. REYES

          Associate Justice                                        Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

C E R T I F I C A T I O N

                Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                                   RENATO C. CORONA

                                                                                                                          Chief Justice

CASE 2012-0021: ERNESTO G. YMBONG VS. ABS-CBN BROADCASTING CORPORATION, VENERANDA SY AND DANTE LUZON (G.R. NO. 184885, MARCH 7, 2012, VILLARAMA, JR., J.:) SUBJECT: COMPANY POLICY THAT  AN EMPLOYEE WHO RAN FOR PUBLIC OFFICE MUST RESIGN OR IS DEEMED RESIGNED UPHELD. (BRIEF TITLE: YMBONG VS. ABS-CBN)

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DISPOSITIVE:

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.

With costs against petitioner.

SO ORDERED.

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FIRST DIVISION

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DECISION

VILLARAMA, JR., J.:

          Before us is a Rule 45 Petition seeking to set aside the August 22, 2007 Decision[1][1] and September 18, 2008 Resolution[2][2] of the Court of Appeals (CA) in CA-G.R. SP No. 86206 declaring petitioner to have resigned from work and not illegally dismissed.

          The antecedent facts follow:

          Petitioner Ernesto G. Ymbong started working for ABS-CBN Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in Cebuas a television talent, co-anchoring Hoy Gising and TV Patrol Cebu. His stint in ABS-CBN later extended to radio when ABS-CBN Cebu launched its AM station DYAB in 1995 where he worked as drama and voice talent, spinner, scriptwriter and public affairs program anchor.

          Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu. Starting 1995, he worked as talent, director and scriptwriter for various radio programs aired over DYAB.

          OnJanuary 1, 1996, the ABS-CBN Head Office inManilaissued Policy No. HR-ER-016 or the “Policy on Employees Seeking Public Office.” The pertinent portions read:

1.       Any employee who intends to run for any public office position, must file his/her letter of resignation, at least thirty (30) days prior to the official filing of the certificate of candidacy either for national or local election.

            x x x x

3.         Further, any employee who intends to join a political group/party or even with no political affiliation but who intends to openly and aggressively campaign for a candidate or group of candidates (e.g. publicly speaking/endorsing candidate, recruiting campaign workers, etc.) must file a request for leave of absence subject to management’s approval. For this particular reason, the employee should file the leave request at least thirty (30) days prior to the start of the planned leave period.

            x x x x[3][3] [Emphasis and underscoring supplied.]

          Because of the impending May 1998 elections and based on his immediate recollection of the policy at that time, Dante Luzon, Assistant Station Manager of DYAB issued the following memorandum:

TO                   :           ALL CONCERNED

FROM             :           DANTE LUZON

DATE              :          MARCH 25, 1998

SUBJECT        :           AS STATED

Please be informed that per company policy, any employee/talent who wants to run for any position in the coming election will have to file a leave of absence the moment he/she files his/her certificate of candidacy.

The services rendered by the concerned employee/talent to this company will then be temporarily suspended for the entire campaign/election period.

For strict compliance.[4][4] [Emphasis and underscoring supplied.]

          Luzon, however, admitted that upon double-checking of the exact text of the policy and subsequent confirmation with the ABS-CBN Head Office, he saw that the policy actually required suspension for those who intend to campaign for a political party or candidate and resignation for those who will actually run in the elections.[5][5]

          After the issuance of theMarch 25, 1998Memorandum, Ymbong got in touch withLuzon. Luzonclaims that Ymbong approached him and told him that he would leave radio for a couple of months because he will campaign for the administration ticket.  It was only after the elections that they found out that Ymbong actually ran for public office himself at the eleventh hour.  Ymbong, on the other hand, claims that in accordance with the March 25, 1998 Memorandum, he informed Luzon through a letter that he would take a few months leave of absence from March 8, 1998 to May 18, 1998 since he was running for councilor of Lapu-Lapu City.

          As regards Patalinghug, Patalinghug approached Luzon and advised him that he will run as councilor for Naga,Cebu.  According to Luzon, he clarified to Patalinghug that he will be considered resigned and not just on leave once he files a certificate of candidacy.  Thus, Patalinghug wroteLuzonthe following letter onApril 13, 1998:

Dear Mr. Luzon,

            I’m submitting to you my letter of resignation as your Drama Production Chief and Talent due to your company’s policy that every person connected to ABS-CBN that should seek an elected position in the government will be forced to resigned (sic) from his position.  So herewith I’m submitting my resignation with a hard heart.  But I’m still hoping to be connected again with your prestigious company after the election[s] should you feel that I’m still an asset to your drama production department.  I’m looking forward to that day and I’m very happy and proud that I have served for two and a half years the most stable and the most prestigious Radio and TV Network in thePhilippines.

            As a friend[,] wish me luck and Pray for me. Thank you.

                                                                        Very Truly Yours,

                                                                                    (Sgd.)

                                                                Leandro “Boy” Patalinghug[6][6]

          Unfortunately, both Ymbong and Patalinghug lost in the May 1998 elections.

          Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu. According to Luzon, he informed them that they cannot work there anymore because of company policy.  This was stressed even in subsequent meetings and they were told that the company was not allowing any exceptions.  ABS-CBN, however, agreed out of pure liberality to give them a chance to wind up their participation in the radio drama, Nagbabagang Langit, since it was rating well and to avoid an abrupt ending.  The agreed winding-up, however, dragged on for so long promptingLuzon to issue to Ymbong the following memorandum datedSeptember 14, 1998:

TO                   :           NESTOR YMBONG

FROM             :           DANTE LUZON

SUBJECT        :           AS STATED

DATE              :           14 SEPT. 1998

Please be reminded that your services as drama talent had already been automatically terminated when you ran for a local government position last election.

The Management however gave you more than enough time to end your drama participation and other involvement with the drama department.

It has been decided therefore that all your drama participation shall be terminated effective immediately. However, your involvement as drama spinner/narrator of the drama “NAGBA[BA]GANG LANGIT” continues until its writer/director Mr. Leandro Patalinghug wraps it up one week upon receipt of a separate memo issued to him.[7][7]

          Ymbong in contrast contended that after the expiration of his leave of absence, he reported back to work as a regular talent and in fact continued to receive his salary.  On September 14, 1998, he received a memorandum stating that his services are being terminated immediately, much to his surprise.  Thus, he filed an illegal dismissal complaint[8][8] against ABS-CBN, Luzon and DYAB Station Manager Veneranda Sy.  He argued that the ground cited by ABS-CBN for his dismissal was not among those enumerated in the Labor Code, as amended.  And even granting without admitting the existence of the company policy supposed to have been violated, Ymbong averred that it was necessary that the company policy meet certain requirements before willful disobedience of the policy may constitute a just cause for termination.  Ymbong further argued that the company policy violates his constitutional right to suffrage.[9][9]

          Patalinghug likewise filed an illegal dismissal complaint[10][10] against ABS-CBN.

          ABS-CBN prayed for the dismissal of the complaints arguing that there is no employer-employee relationship between the company and Ymbong and Patalinghug.  ABS-CBN contended that they are not employees but talents as evidenced by their talent contracts.  However, notwithstanding their status, ABS-CBN has a standing policy on persons connected with the company whenever they will run for public office.[11][11]

          On July 14, 1999, the Labor Arbiter rendered a decision[12][12] finding the dismissal of Ymbong and Patalinghug illegal, thus:

            WHEREFORE, in the light of the foregoing, judgment is rendered finding the dismissal of the two complainants illegal. An order is issued directing respondent ABS[-]CBN to immediately reinstate complainants to their former positions without loss of seniority rights plus the payment of backwages in the amount of P200,000.00 to each complainant.

            All other claims are dismissed.

            SO ORDERED.[13][13]

          The Labor Arbiter found that there exists an employer-employee relationship between ABS-CBN and Ymbong and Patalinghug considering the stipulations in their appointment letters/talent contracts.  The Labor Arbiter noted particularly that the appointment letters/talent contracts imposed conditions in the performance of their work, specifically on attendance and punctuality, which effectively placed them under the control of ABS-CBN.  The Labor Arbiter likewise ruled that although the subject company policy is reasonable and not contrary to law, the same was not made known to Ymbong and Patalinghug and in fact was superseded by another one embodied in the March 25, 1998 Memorandum issued by Luzon.  Thus, there is no valid or authorized cause in terminating Ymbong and Patalinghug from their employment.

          In its memorandum of appeal[14][14] before the National Labor Relations Commission (NLRC), ABS-CBN contended that the Labor Arbiter has no jurisdiction over the case because there is no employer-employee relationship between the company and  Ymbong  and  Patalinghug,  and that Sy and Luzon mistakenly assumed that Ymbong and Patalinghug could just file a leave of absence since they are only talents and not employees.  In its Supplemental Appeal,[15][15] ABS-CBN insisted that Ymbong and Patalinghug were engaged as radio talents for DYAB dramas and personality programs and their contract is one between a self-employed contractor and the hiring party which is a standard practice in the broadcasting industry.  It also argued that the Labor Arbiter should not have made much of the provisions on Ymbong’s attendance and punctuality since such requirement is a dictate of the programming of the station, the slating of shows at regular time slots, and availability of recording studios – not an attempt to exercise control over the manner of his performance of the contracted anchor work within his scheduled spot on air.  As for the pronouncement that the company policy has already been superseded by the March 25, 1998 Memorandum issued by Luzon, the latter already clarified that it was the very policy he sought to enforce.  This matter was relayed by Luzon to Patalinghug when the latter disclosed his plans to join the 1998 elections while Ymbong only informed the company that he was campaigning for the administration ticket and the company had no inkling that he will actually run until the issue was already moot and academic.  ABS-CBN further contended that Ymbong and Patalinghug’s “reinstatement” is legally and physically impossible as the talent positions they vacated no longer exist.  Neither is there basis for the award of back wages since they were not earning a monthly salary but paid talent fees on a per production/per script basis.  Attached to the Supplemental Appeal is a Sworn Statement[16][16] of Luzon.

          On March 8, 2004, the NLRC rendered a decision[17][17] modifying the labor arbiter’s decision. The fallo of the NLRC decision reads:

WHEREFORE, premises considered, the decision of Labor Arbiter Nicasio C. Aninon dated14 July 1999is MODIFIED, to wit:

Ordering respondent ABS-CBN to reinstate complainant Ernesto G. Ymbong and to pay his full backwages computed from15 September 1998up to the time of his actual reinstatement.

SO ORDERED.[18][18]

The NLRC dismissed ABS-CBN’s Supplemental Appeal for being filed out of time.  The NLRC ruled that to entertain the same would be to allow the parties to submit their appeal on piecemeal basis, which is contrary to the agency’s duty to facilitate speedy disposition of cases.  The NLRC also held that ABS-CBN wielded the power of control over Ymbong and Patalinghug, thereby proving the existence of an employer-employee relationship between them.

As to the issue of whether they were illegally dismissed, the NLRC treated their cases differently.  In the case of Patalinghug, it found that he voluntarily resigned from employment onApril 21, 1998when he submitted his resignation letter.  The NLRC noted that although the tenor of the resignation letter is somewhat involuntary, he knew that it is the policy of the company that every person connected therewith should resign from his employment if he seeks an elected position in the government.  As to Ymbong, however, the NLRC ruled otherwise.  It ruled that the March 25, 1998 Memorandum merely states that an employee who seeks any elected position in the government will only merit the temporary suspension of his services.  It held that under the principle of social justice, the March 25, 1998 Memorandum shall prevail and ABS-CBN is estopped from enforcing the September 14, 1998 memorandum issued to Ymbong stating that his services had been automatically terminated when he ran for an elective position.

          ABS-CBN moved to reconsider the NLRC decision, but the same was denied in a Resolution dated June 21, 2004.[19][19]

          Imputing grave abuse of discretion on the NLRC, ABS-CBN filed a petition for certiorari[20][20] before the CA alleging that:

I.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND SERIOUSLY MISAPPRECIATED THE FACTS IN NOT HOLDING THAT RESPONDENT YMBONG IS A FREELANCE RADIO TALENT AND MEDIA PRACTITIONER—NOT A “REGULAR EMPLOYEE” OF PETITIONER—TO WHOM CERTAIN PRODUCTION WORK HAD BEEN OUTSOURCED BY ABS-CBN CEBU UNDER AN INDEPENDENT CONTRACTORSHIP SITUATION, THUS RENDERING THE LABOR COURTS WITHOUT JURISDICTION OVER THE CASE IN THE ABSENCE OF EMPLOYMENT RELATIONS BETWEEN THE PARTIES.

II.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN DECLARING RESPONDENT YMBONG TO BE A REGULAR EMPLOYEE OF PETITIONER AS TO CREATE A CONTRACTUAL EMPLOYMENT RELATION BETWEEN THEM WHEN NONE EXISTS OR HAD BEEN AGREED UPON OR OTHERWISE INTENDED BY THE PARTIES.

III.

EVEN ASSUMING THE ALLEGED EMPLOYMENT RELATION TO EXIST FOR THE SAKE OF ARGUMENT, RESPONDENT NLRC IN ANY CASE COMMITTED A GRAVE ABUSE OF DISCRETION IN NOT SIMILARLY UPHOLDING AND APPLYING COMPANY POLICY NO. HR-ER-016 INTHE CASE OF RESPONDENT YMBONG AND DEEMING HIM AS RESIGNED AND DISQUALIFIED FROM FURTHER ENGAGEMENT AS A RADIO TALENT IN ABS-CBN CEBU AS A CONSEQUENCE OF HIS CANDIDACY IN THE 1998 ELECTIONS, AS RESPONDENT NLRC HAD DONE IN THE CASE OF PATALINGHUG.

IV.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION AND DENIED DUE PROCESS TO PETITIONER IN REFUSING TO CONSIDER ITS SUPPLEMENTAL APPEAL, DATED OCTOBER 18, 1999, “FOR BEING FILED OUT OF TIME” CONSIDERING THAT THE FILING OF SUCH A PLEADING IS NOT IN ANY CASE PROSCRIBED AND RESPONDENT NLRC IS AUTHORIZED TO CONSIDER ADDITIONAL EVIDENCE ON APPEAL; MOREOVER, TECHNICAL RULES OF EVIDENCE DO NOT APPLY IN LABOR CASES.

V.

RESPONDENT NLRC COMMITTED A GRAVE ABUSE OF DISCRETION IN GRANTING THE RELIEF OF REINSTATEMENT AND BACKWAGES TO RESPONDENT YMBONG SINCE HE NEVER OCCUPIED ANY “REGULAR” POSITION IN PETITIONER FROM WHICH HE COULD HAVE BEEN “ILLEGALLY DISMISSED,” NOR ARE ANY OF THE RADIO PRODUCTIONS IN WHICH HE HAD DONE TALENT WORK FOR PETITIONER STILL EXISTING. INDEED, THERE IS NO BASIS WHATSOEVER FOR THE AWARD OF BACKWAGES TO RESPONDENT YMBONG IN THE AMOUNT OF P200,000.00 CONSIDERING THAT, AS SHOWN BY THE UNCONTROVERTED EVIDENCE, HE WAS NOT EARNING A MONTHLY “SALARY” OF “P20,000.00,” AS HE FALSELY CLAIMS, BUT WAS PAID TALENT FEES ON A “PER PRODUCTION/PER SCRIPT” BASIS WHICH AVERAGED LESS THAN P10,000.00 PER MONTH IN TALENT FEES ALL IN ALL.[21][21]

          OnAugust 22, 2007, the CA rendered the assailed decision reversing and setting aside theMarch 8, 2004Decision andJune 21, 2004Resolution of the NLRC.  The CA declared Ymbong resigned from employment and not to have been illegally dismissed.  The award of full back wages in his favor was deleted accordingly.

          The CA ruled that ABS-CBN is estopped from claiming that Ymbong was not its employee after applying the provisions of Policy No. HR-ER-016 to him.  It noted that said policy is entitled “Policy on Employees Seeking Public Office” and the guidelines contained therein specifically pertain to employees and did not even mention talents or independent contractors.  It held that it is a complete turnaround on ABS-CBN’s part to later argue that Ymbong is only a radio talent or independent contractor and not its employee.  By applying the subject company policy on Ymbong, ABS-CBN had explicitly recognized him to be an employee and not merely an independent contractor.

          The CA likewise held that the subject company policy is the controlling guideline and therefore, Ymbong should be considered resigned from ABS-CBN.  WhileLuzonhas policy-making power as assistant radio manager, he had no authority to issue a memorandum that had the effect of repealing or superseding a subsisting policy.  Contrary to the findings of the Labor Arbiter, the subject company policy was effective at that time and continues to be valid and subsisting up to the present.  The CA cited Patalinghug’s resignation letter to buttress this conclusion, noting that Patalinghug openly admitted in his letter that his resignation was in line with the said company policy.  Since ABS-CBN applied Policy No. HR-ER-016 to Patalinghug, there is no reason not to apply the same regulation to Ymbong who was on a similar situation as the former.  Thus, the CA found that the NLRC overstepped its area of discretion to a point of grave abuse in declaring Ymbong to have been illegally terminated.  The CA concluded that there is no illegal dismissal to speak of in the instant case as Ymbong is considered resigned when he ran for an elective post pursuant to the subject company policy.

          Hence, this petition.

          Petitioner argues that the CA gravely erred: (1) in upholding Policy No. HR-ER-016; (2) in upholding the validity of the termination of Ymbong’s services; and (3) when it reversed the decision of the NLRC 4^th Division of Cebu City which affirmed the decision of Labor Arbiter Nicasio C. Aniñon.[22][22]

          Ymbong argues that the subject company policy is a clear interference and a gross violation of an employee’s right to suffrage.  He is surprised why it was easy for the CA to rule that Luzon’s memorandum ran counter to an existing policy while on the other end, it did not see that it was in conflict with the constitutional right to suffrage.  He also points out that the issuance of the March 25, 1998 Memorandum was precisely an exercise of the management power to which an employee like him must respect; otherwise, he will be sanctioned for disobedience or worse, even terminated.  He was not in a position to know which between the two issuances was correct and as far as he is concerned, the March 25, 1998 Memorandum superseded the subject company policy.  Moreover, ABS-CBN cannot disown acts of its officers most especially since it prejudiced his property rights.[23][23]

          As to the validity of his dismissal, Ymbong contends that the ground relied upon by ABS-CBN is not among the just and authorized causes provided in the Labor Code, as amended.  And even assuming the subject company policy passes the test of validity under the pretext of the right of the management to discipline and terminate its employees, the exercise of such right is not without bounds.  Ymbong avers that his automatic termination was a blatant disregard of his right to due process.  He was never asked to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy.[24][24]

          Ymbong likewise asseverates that both the Labor Arbiter and the NLRC were consistent in their findings that he was illegally dismissed.  It is settled that factual findings of labor administrative officials, if supported by substantial evidence, are accorded not only great respect but even finality.[25][25]

          ABS-CBN, for its part, counters that the validity of policies such as Policy No. HR-ER-016 has long been upheld by this Court which has ruled that a media company has a right to impose a policy providing that employees who file their certificates of candidacy in any election shall be considered resigned.[26][26]  Moreover, case law has upheld the validity of the exercise of management prerogatives even if they appear to limit the rights of employees as long as there is no showing that management prerogatives were exercised in a manner contrary to law.[27][27]  ABS-CBN contends that being the largest media and entertainment company in the country, its reputation stems not only from its ability to deliver quality entertainment programs but also because of neutrality and impartiality in delivering news.[28][28]

          ABS-CBN further argues that nothing in the company policy prohibits its employees from either accepting a public appointive position or from running for public office.  Thus, it cannot be considered as violative of the constitutional right of suffrage. Moreover, the Supreme Court has recognized the employer’s right to enforce occupational qualifications as long as the employer is able to show the existence of a reasonable business necessity in imposing the questioned policy.  Here, Policy No. HR-ER-016 itself states that it was issued “to protect the company from any public misconceptions” and “[t]o preserve its objectivity, neutrality and credibility.”  Thus, it cannot be denied that it is reasonable under the circumstances.[29][29]

          ABS-CBN likewise opposes Ymbong’s claim that he was terminated. ABS-CBN argues that on the contrary, Ymbong’s unilateral act of filing his certificate of candidacy is an overt act tantamount to voluntary resignation on his part by virtue of the clear mandate found in Policy No. HR-ER-016. Ymbong, however, failed to file his resignation and in fact misled his superiors by making them believe that he was going on leave to campaign for the administration candidates but in fact, he actually ran for councilor. He also claims to have fully apprised Luzonthrough a letter of his intention to run for public office, but he failed to adduce a copy of the same.[30][30]

          As to Ymbong’s argument that the CA should not have reversed the findings of the Labor Arbiter and the NLRC, ABS-CBN asseverates that the CA is not precluded from making its own findings most especially if upon its own review of the case, it has been revealed that the NLRC, in affirming the findings of the Labor Arbiter, committed grave abuse of discretion amounting to lack or excess of jurisdiction when it failed to apply the subject company policy in Ymbong’s case when it readily applied the same to Patalinghug.[31][31]

          Essentially, the issues to be resolved in the instant petition are: (1) whether Policy No. HR-ER-016 is valid; (2) whether the March 25, 1998 Memorandum issued byLuzonsuperseded Policy No. HR-ER-016; and (3) whether Ymbong, by seeking an elective post, is deemed to have resigned and not dismissed by ABS-CBN.

Policy No. HR-ER-016 is valid.

          This is not the first time that this Court has dealt with a policy similar to Policy No. HR-ER-016.  In the case of Manila Broadcasting Company v. NLRC,[32][32] this Court ruled:

What is involved in this case is an unwritten company policy considering any employee who files a certificate of candidacy for any elective or local office as resigned from the company.  Although §11(b) of R.A. No. 6646 does not require mass media commentators and announcers such as private respondent to resign from their radio or TV stations but only to go on leave for the duration of the campaign period, we think that the company may nevertheless validly require them to resign as a matter of policy.  In this case, the policy is justified on the following grounds:

Working for the government and the company at the same time is clearly disadvantageous and prejudicial to the rights and interest not only of the company but the public as well. In the event an employee wins in an election, he cannot fully serve, as he is expected to do, the interest of his employer. The employee has to serve two (2) employers, obviously detrimental to the interest of both the government and the private employer.

In the event the employee loses in the election, the impartiality and cold neutrality of an employee as broadcast personality is suspect, thus readily eroding and adversely affecting the confidence and trust of the listening public to employer’s station.[33][33]

          ABS-CBN, like Manila Broadcasting Company, also had a valid justification for Policy No. HR-ER-016.  Its rationale is embodied in the policy itself, to wit:

Rationale:

ABS-CBN BROADCASTING CORPORATION strongly believes that it is to the best interest of the company to continuously remain apolitical. While it encourages and supports its employees to have greater political awareness and for them to exercise their right to suffrage, the company, however, prefers to remain politically independent and unattached to any political individual or entity.

Therefore, employees who [intend] to run for public office or accept political appointment should resign from their positions, in order to protect the company from any public misconceptions. To preserve its objectivity, neutrality and credibility, the company reiterates the following policy guidelines for strict implementation.

x x x x[34][34]  [Emphasis supplied.]

We have consistently held that so long as a company’s management prerogatives are exercised in good faith for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements, this Court will uphold them.[35][35]   In the instant case, ABS-CBN validly justified the implementation of Policy No. HR-ER-016.  It is well within its rights to ensure that it maintains its objectivity and credibility and freeing itself from any appearance of impartiality so that the confidence of the viewing and listening public in it will not be in any way eroded.  Even as the law is solicitous of the welfare of the employees, it must also protect the right of an employer to exercise what are clearly management prerogatives.  The free will of management to conduct its own business affairs to achieve its purpose cannot be denied.[36][36]

          It is worth noting that such exercise of management prerogative has earned a stamp of approval from no less than our Congress itself when onFebruary 12, 2001, it enacted Republic Act No. 9006, otherwise known as the “Fair Election Act.” Section 6.6 thereof reads:

            6.6. Any mass media columnist, commentator, announcer, reporter, on-air correspondent or personality who is a candidate for any elective public office or is a campaign volunteer for or employed or retained in any capacity by any candidate or political party shall be deemed resigned, if so required by their employer, or shall take a leave of absence from his/her work as such during the campaign period: Provided, That any media practitioner who is an official of a political party or a member of the campaign staff of a candidate or political party shall not use his/her time or space to favor any candidate or political party. [Emphasis and underscoring supplied.]

Policy No. HR-ER-016 was not superseded by the March 25, 1998 Memorandum

          The CA correctly ruled that though Luzon, as Assistant Station Manager for Radio of ABS-CBN, has policy-making powers in relation to his principal task of administering the network’s radio station in theCeburegion, the exercise of such power should be in accord with the general rules and regulations imposed by the ABS-CBN Head Office to its employees. Clearly, theMarch 25, 1998Memorandum issued byLuzonwhich only requires employees to go on leave if they intend to run for any elective position is in absolute contradiction with Policy No. HR-ER-016 issued by the ABS-CBN Head Office in Manila which requires the resignation, not only the filing of a leave of absence, of any employee who intends to run for public office.  Having been issued beyond the scope of his authority, the March 25, 1998 Memorandum is therefore void and did not supersede Policy No. HR-ER-016. 

Also worth noting is that Luzon in his Sworn Statement admitted the inaccuracy of his recollection of the company policy when he issued the March 25, 1998 Memorandum and stated therein that upon double-checking of the exact text of the policy statement and subsequent confirmation with the ABS-CBN Head Office in Manila, he learned that the policy required resignation for those who will actually run in elections because the company wanted to maintain its independence.  Since the officer who himself issued the subject memorandum acknowledged that it is not in harmony with the Policy issued by the upper management, there is no reason for it to be a source of right for Ymbong.

Ymbong is deemed resigned when he ran for councilor.

          As Policy No. HR-ER-016 is the subsisting company policy and notLuzon’s March 25, 1998 Memorandum, Ymbong is deemed resigned when he ran for councilor.

          We find no merit in Ymbong’s argument that “[his] automatic termination x x x was a blatant [disregard] of [his] right to due process” as he was “never asked to explain why he did not tender his resignation before he ran for public office as mandated by [the subject company policy].”[37][37] Ymbong’s overt act of running for councilor ofLapu-LapuCity is tantamount to resignation on his part. He was separated from ABS-CBN not because he was dismissed but because he resigned.  Since there was no termination to speak of, the requirement of due process in dismissal cases cannot be applied to Ymbong.  Thus, ABS-CBN is not duty-bound to ask him to explain why he did not tender his resignation before he ran for public office as mandated by the subject company policy.

          In addition, we do not subscribe to Ymbong’s claim that he was not in a position to know which of the two issuances was correct.  Ymbong most likely than not, is fully aware that the subsisting policy is Policy No. HR-ER-016 and not the March 25, 1998 Memorandum and it was for this reason that, as stated by Luzon in his Sworn Statement, he only told the latter that he will only campaign for the administration ticket and not actually run for an elective post.  Ymbong claims he had fully apprisedLuzonby letter of his plan to run and even filed a leave of absence but records are bereft of any proof of said claim.  Ymbong claims that the letter stating his intention to go on leave to run in the election is attached to his Position Paper as Annex “A,” a perusal of said pleading attached to his petition before this Court, however, show that Annex “A” was not his letter to Luzon but the September 14, 1998 Memorandum informing Ymbong that his services had been automatically terminated when he ran for a local government position.

          Moreover, as pointed out by ABS-CBN, had Ymbong been truthful to his superiors, they would have been able to clarify to him the prevailing company policy and inform him of the consequences of his decision in case he decides to run, asLuzondid in Patalinghug’s case.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.

With costs against petitioner.

SO ORDERED.

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the 1987 Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CASE 2012-0020: CESAR V. GARCIA, CARLOS RAZON, ALBERTO DE GUZMAN, TOMAS RAZON, OMER E. PALO RIZALDE VALENCIA, ALLAN BASA, JESSIE GARCIA,JUANITO PARAS, ALEJANDRO ORAG, ROMMEL PANGAN, RUEL SOLIMAN, AND CENEN CANLAPAN, REPRESENTED BY CESAR V. GARCIA VS. KJ COMMERCIAL REYNALDO QUE (G.R. NO. `96830, 29 FEBRUARY 2012, CARPIO, J.) SUBJECT/S: NOT RAISING THE ISSUE AT CA THAT THE LABOR ARBITER’S DECISION IS FINAL IS FATAL. CANT BE ENTERTAINED BY SC. BOND REQUIREMENT ON APPEAL MAY BE RELAXED. (BRIEF TITLE :GARCIA VS. KJ COMMERCIAL)

=========================

DISPOSITIVE:

WHEREFORE, the Court DENIES the petition and AFFIRMS the 29 April 2011 Decision of the Court of Appeals in CA-G.R. SP No. 115851.

SO ORDERED.

=========================

SECOND DIVISION

CESAR V. GARCIA, CARLOS RAZON,                                G.R. No. 196830

ALBERTO DE GUZMAN,

TOMAS RAZON, OMER E. PALO,                              Present:

RIZALDE VALENCIA,

ALLAN BASA, JESSIE GARCIA,                                           CARPIO, J., Chairperson,

JUANITO PARAS, ALEJANDRO                                           BRION,

ORAG, ROMMEL PANGAN,                                                 PEREZ,

RUEL SOLIMAN, and                                                            SERENO, and

CENEN CANLAPAN, represented by                                      REYES, JJ.

CESAR V. GARCIA,

Petitioners,

– versus –

KJ COMMERCIAL and                                                          Promulgated:

REYNALDO QUE,

Respondents.                                                                             February 29, 2012

x- – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

CARPIO, J.:

The Case

This is a petition¹ for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 29 April 2011 Decision² of the Court of Appeals in CA-G.R. SP No. 115851, affirming the 8 February³ and 25 June⁴ 2010 Resolutions of the National Labor Relations Commission (NLRC) in NLRC-LAC-No. 12-004061-08. The NLRC set aside the 30 October 2008 Decision⁵ of the Labor Arbiter in NLRC Case No. RAB-III-02-9779-06.

The Facts

Respondent KJ Commercial is a sole proprietorship. It owns trucks and engages in the business of distributing cement products. On different dates, KJ Commercial employed as truck drivers and truck helpers petitioners Cesar V. Garcia, Carlos Razon, Alberto De Guzman, Tomas Razon, Omer E. Palo, RizaldeValencia, Allan Basa, Jessie Garcia, Juanito Paras, Alejandro Orag, Rommel Pangan, Ruel Soliman, and Cenen Canlapan (petitioners).

On 2 January 2006, petitioners demanded for a P40 daily salary increase. To pressure KJ Commercial to grant their demand, they stopped working and abandoned their trucks at the Northern Cement Plant Station in Sison, Pangasinan. They also blocked other workers from reporting to work.

On 3 February 2006, petitioners filed with the Labor Arbiter a complaint⁶ for illegal dismissal, underpayment of salary and non-payment of service incentive leave and thirteenth month pay.

The Labor Arbiter’s Ruling

In his 30 October 2008 Decision, the Labor Arbiter held that KJ Commercial illegally dismissed petitioners. The Labor Arbiter held:

After a careful examination and evaluation of the facts and evidences adduced by both parties, we find valid and cogent reasons to declare that these complainants were illegally dismissed from their work to be entitled to their separation in lieu of reinstatement equivalent to their salary for one (1) month for every year of service and backwages from the time that they were terminated on January 2, 2006 up to the date of this Decision.

We carefully examined the defense set up by the respondents that these complainants were not terminated from their employment but were the one [sic] who abandoned their work by staging strike and refused to perform their work as drivers of the trucks owned by the respondents on January 2, 2006, vis-á-vis, he [sic] allegations and claims of the complainants that when they asked for an increase of their salary for P40.00, they were illegally dismissed from their employment without due process, and we gave more credence and value to the allegations of the complainants that they were illegally dismissed from their employment without due process and did not abandoned [sic] their work as the respondents wanted to project. We examined the narration of facts of the respondents in their Position Paper and Supplemental Position Paper and we concluded that these complainants were actually terminated on January 2, 2006 and did not abandoned [sic] their jobs as claimed by the respondents when the respondents, in their Position Paper, admitted that their cement plant was shutdown on January 3, 2006 and when it resumed its operation on January 7, 2006, they ordered the other drivers to get the trucks in order that the hauling of the cements will not incur further delay and that their business will not be prejudiced.

Granting for the sake of discussion that indeed these complainants abandoned their work on January 2, 2006, why then that [sic] the cement plant was shutdown on January 3, 2006 and resumed operation on January 7, 2006, when there are fifty (50) drivers of the respondents and only thirteen (13) of them were allegedly stopped from working. Further, if these complainants actually abandoned their work, as claimed by the respondents, they miserably failed to show by substantial evidence that these complainants deliberately and unjustifiably refused to resume their employment.

x x x x

The acts of these complainants in filing this instant case a month after they were terminated from their work is more than sufficient evidence to prove and show that they do not have the intention of abandoning their work. While we acknowledged the offer of the respondents for these complainants to return back to work during the mandatory conference, the fact that these complainants were illegally terminated and prevented from performing their work as truck drivers of the respondents and that there was no compliance with the substantive and procedural due process of terminating an employee, their subsequent offer to return to work will not cure the defect that there was already illegal dismissal committed against these complainants.⁷

KJ Commercial appealed to the NLRC. It filed before the NLRC a motion to reduce bond and posted a P50,000 cash bond.

The NLRC’s Ruling

In its 9 March 2009 Decision,⁸ the NLRC dismissed the appeal. The NLRC held:

Filed with respondents-appellants’ Appeal Memorandum is a Motion to Reduce Appeal Bond and a cash bond of P50,000.00 only. x x x

We find no merit on [sic] the respondents-appellants’ Motion. It must be stressed that under Section 6, Rule VI of the 2005 Revised Rules of this Commission, a motion to reduce bond shall only be entertained when the following requisites concur:

1.      The motion is founded on meritorious ground; and

2.      A bond of reasonable amount in relation to the monetary award is posted.

We note that while respondents-appellants claim that they could not possibly produce enough cash for the required appeal bond, they are unwilling to at least put up a property to secure a surety bond. Understandably, no surety agency would normally accept a surety obligation involving a substantial amount without a guarantee that it would be indemnified in case the surety bond posted is forfeited in favor of a judgment creditor. Respondents-appellants’ insinuation that no surety company can finish the processing of a surety bond in ten days time is not worthy of belief as it is contrary to ordinary business experience. What is obvious is that respondents-appellants are not willing to accept the usual conditions of a surety agreement that is why no surety bond could be processed. The reduction of the required bond is not a matter of right o[n] the part of the movant but lies within the sound discretion of the NLRC upon showing of meritorious grounds x x x. In this case, we find that the instant motion is not founded on a meritorious ground. x x x Moreover, we note that the P50,000.00 cash bond posted by respondents-appellants which represents less than two (2) percent of the monetary award is dismally disproportionate to the monetary award of P2,612,930.00 and that the amount of bond posted by respondents-appellants is not reasonable in relation to the monetary award. x x x A motion to reduce bond that does not satisfy the conditions required under NLRC Rules shall not stop the running of the period to perfect an appeal x x x.

Conversely, respondents-appellants failed to perfect an appeal for failure to post the required bond.⁹

KJ Commercial filed a motion¹⁰ for reconsideration and posted a P2,562,930 surety bond. In its 8 February 2010 Resolution, the NLRC granted the motion and set aside the Labor Arbiter’s 30 October 2008 Decision. The NLRC held:

x x x [T]his Commission opts to resolve and grant the Motion for Reconsideration filed by respondent-appellant seeking for reconsideration of Our Decision promulgated on March 9, 2009 dismissing the Appeal for non-perfection, there being an honest effort by the appellants to comply with putting up the full amount of the required appeal bond. Moreover, considering the merit of the appeal, by granting the motion for reconsideration, the paramount interest of justice is better served in the resolution of this case.

x x x x

Going over the record of the case, this Commission noted that in respondents’ Supplemental Position Paper, in denying complainants’ imputation of illegal dismissal, respondents categorically alleged “..[.] that complainants were not illegally dismissed but on January 2, 2006, they abandoned their work by means of [‘]work stoppage[’] or they engaged in an [‘]illegal strike[’] when they demanded for a higher rate..[.] that while their respective assigned trucks were all in the cement plant ready to be loaded, complainants paralyzed respondents’ hauling or trucking operation by staging a work stoppage at the premises of KJ Commercial compound by further blocking their co-drivers not to report for work.” We have observed that despite these damaging allegations, complainants never bothered to dispute nor contradicted these material allegations. Complainants’ silence on these material allegations consequently lends support to respondents-appellants[’] contention that complainants were never dismissed at all but had stopped driving the hauler truck assigned to each of them when their demand for salary increase in the amount they wish was not granted by respondents-appellants.

Moreover, contrary to the findings of the Labor Arbiter, the purported shutdown of the cement plant being cited by the Labor Arbiter a quo as the principal cause of complainants’ purported dismissal cannot be attributed to respondents because it was never established by evidence that respondents were the owner [sic] of the cement plant where complainants as truck drivers were hauling cargoes of cement with trucks owned by respondents whose business is confined to that of a cement distributor and cargo truck hauler. Based on the undisputed account of respondents-appellants, it appears that the cement plant was compelled to shut down because the hauling or trucking operation was paralyzed due to complainants’ resort to work stoppage by refusing to drive their hauler trucks despite the order of the management for them to get the trucks which blockaded the cement plant.

Furthermore, a perusal of the complainants’ position paper and amended position paper failed to allege the overt acts showing how they were in fact dismissed on 02 January 2006. The complainants had not even alleged that they were specifically told that they were dismissed after they demanded for a salary increase or any statement to that effect. Neither had they alleged that they were prevented from reporting for work. This only shows there was never a dismissal to begin with.

x x x x

We cannot affirm the Labor Arbiter’s conclusions absent showing a fact of termination or circumstances under which the dismissal was effected. Though only substantial evidence is required in proceedings before the Labor Arbiter to support a litigant’s claim, the same still requires evidence separate and different, and something which supports the allegations affirmatively made. The complainants’ claim that they were dismissed on 02 January 2006, absent proof thereof or any supporting evidence thereto is at best self serving.¹¹

Petitioners filed a motion for reconsideration. In its 25 June 2010 Resolution, the NLRC denied the motion for lack of merit. The NLRC held:

We stress that it is within the power and discretion of this Commission to grant or deny a motion to reduce appeal bond. Having earlier denied the motion to reduce bond of the respondents-appellants, this Commission is not precluded from reconsidering its earlier Decision on second look when it finds meritorious ground to serve the ends of justice. Settled is the norm in the matter of appeal bonds that letter-perfect rules must yield to the broader interest of substantial justice x x x. In this case, the Decision of the Labor Arbiter had not really become final and executory as respondents timely filed a Memorandum of Appeal with a Motion to Reduce Appeal Bond and a partial appeal bond. Although the respondents[’] appeal was dismissed, in the earlier decision, the same Decision was later reconsidered on considerations that the Labor Arbiter committed palpable errors in his findings and the monetary awards to the appellees are secured by a partial bond and then later, by an appeal bond for the full amount of the monetary awards.¹²

Petitioners filed with the Court of Appeals a petition¹³ for certiorari under Rule 65 of the Rules of Court.

The Court of Appeals’ Ruling

In its 29 April 2011 Decision, the Court of Appeals dismissed the petition and affirmed the NLRC’s 8 February and 25 June 2010 Resolutions. The Court of Appeals held:

After scrupulously examining the contrasting positions of the parties, and the conflicting decisions of the labor tribunals, We find the records of the case bereft of evidence to substantiate the conclusions reached by the Labor Arbiter that petitioners were illegally dismissed from employment.

While petitioners vehemently argue that they were unlawfully separated from work, records are devoid of evidence to show the fact of dismissal. Neither was there any evidence offered by petitioners to prove that they were no longer allowed to perform their duties as truck drivers or they were prevented from entering KJ Commercial’s premises, except for their empty and general allegations that they were illegally dismissed from employment. Such bare and sweeping statement contains nothing but empty imputation of a fact that could hardly be given any evidentiary weight by this Court. At the very least, petitioners should have detailed or elaborated the circumstances surrounding their dismissal or substantiate their claims by submitting evidence to butress such contention. Without a doubt, petitioners’ allegation of illegal dismissal has no leg to stand on. Accordingly, they should not expect this Court to swallow their asseveration hook, line and sinker in the absence of supporting proof. Allegation that one was illegally dismissed from work is not a magic word that once invoked will automatically sway this Court to rule in favor of the party invoking it. There must first be substantial evidence to prove that indeed there was illegal dismissal before the employer bears the burden to prove the contrary.¹⁴

Hence, the present petition.

The Issue

Petitioners raise as issue that the Labor Arbiter’s 30 October 2008 Decision became final and executory; thus, the NLRC’s 8 February and 25 June 2010 Resolutions and the Court of Appeals’ 29 April 2011 Decision are void for lack of jurisdiction. Petitioners claim that KJ Commercial failed to perfect an appeal since the motion to reduce bond did not stop the running of the period to appeal.

The Court’s Ruling

The petition is unmeritorious.

When petitioners filed with the Court of Appeals a petition for certiorari, they did not raise as issue that the Labor Arbiter’s 30 October 2008 Decision had become final and executory. They enumerated the issues in their petition:

GROUNDS FOR THE PETITION

I.

THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR ARBITER A QUO AND PRONOUNCED THAT THE PETITIONERS WERE NOT ILLEGALLY DISMISSED DESPITE CLEAR AND SUBSTANTIAL EVIDENCE ON THE RECORDS SHOWING THAT COMPLAINANTS WERE REGULAR EMPLOYEES TO BE ENTITLED TO SECURITY OF TENURE AND WERE ILLEGALLY DISMISSED FROM THEIR EMPLOYMENT.

II.

THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT GIVE [sic] MUCH WEIGHT TO PRIVATE RESPONDENTS[’] BASELESS ALLEGATIONS IN ITS [sic] MOTION FOR RECONSIDERATION WHEN IT [sic] ALLEGED THAT COMPLAINANTS HAD ABANDONED THEIR WORK BY MEANS OF “WORK STOPPAGE” OR THEY ENGAGED IN AN “ILLEGAL STRIKE” WHEN THEY DEMANDED FOR A HIGHER RATE.

III.

THE NLRC GRAVELY ERRED TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT CONCLUDED THAT “COMPLAINANTS PARALYZED HAULING OR TRUCKING OPERATION BY STAGING A WORK STOPPAGE AT THE PREMISES OF KJ COMMERCIAL COMPOUND BY FURTHER BLOCKING THEIR CO-DRIVERS NOT TO REPORT FOR WORK” WITHOUT A SINGLE EVIDENCE TO SUPPORT SUCH ALLEGATIONS OF PRIVATE RESPONDENTS.

IV.

THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE OF COMPLAINANTS’ DISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE CEMENT PLANT CITED BY THE LABOR ARBITER IN HIS DECISION.¹⁵

Accordingly, the Court of Appeals limited itself to the resolution of the enumerated issues. In its 29 April 2011 Decision, the Court of Appeals held:

Hence, petitioners seek recourse before this Court via this Petition for Certiorari challenging the NLRC Resolutions and raising the following issues:

I.

THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT REVERSED THE DECISION OF THE LABOR ARBITER A QUO AND PRONOUNCED THAT PETITIONERS WERE NOT ILLEGALLY DISMISSED DESPITE CLEAR AND SUBSTANTIAL EVIDENCE ON THE RECORDS SHOWING THAT PETITIONERS WERE REGULAR EMPLOYEES TO BE ENTITLED TO SECURITY OF TENURE AND WERE ILLEGALLY DISMISSED FROM THEIR EMPLOYMENT.

II.

THE NLRC HAS COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION WHEN IT GAVE MUCH WEIGHT TO PRIVATE RESPONDENTS BASELESS ALLEGATIONS IN ITS [sic] MOTION FOR RECONSIDERATION WHEN IT [sic] ALLEGED THAT PETITIONERS HAD ABANDONED THEIR WORK BY MEANS OF “WORK STOPPAGE” OR THEY ENGAGED IN AN “ILLEGAL STRIKE” WHEN THEY DEMANDED FOR A HIGHER RATE.

III.

THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT “PETITIONERS PARALYZED HAULING AND TRUCKING OPERATION BY STAGING A WORK STOPPAGE AT THE PREMISES OF KJ COMMERCIAL COMPOUND BY FURTHER BLOCKING THEIR CO-DRIVERS NOT TO REPORT FOR WORK” WITHOUT A SINGLE EVIDENCE TO SUPPORT SUCH ALLEGATIONS OF PRIVATE RESPONDENTS.

IV.

THE NLRC GRAVELY ERRED WHEN IT CONCLUDED THAT THE PRINCIPAL CAUSE OF PETITIONERS’ DISMISSAL WAS DUE TO THE PURPORTED SHUTDOWN OF THE CEMENT PLANT CITED BY THE LABOR ARBITER IN HIS DECISION.¹⁶

Petitoners cannot, for the first time, raise as issue in their petition filed with this Court that the Labor Arbiter’s 30 October 2008 Decision had become final and executory. Points of law, theories and arguments not raised before the Court of Appeals will not be considered by this Court. Otherwise, KJ Commercial will be denied its right to due process. In Tolosa v. National Labor Relations Commission,¹⁷ the Court held:

Petitioner contends that the labor arbiter’s monetary award has already reached finality, since private respondents were not able to file a timely appeal before the NLRC.

This argument cannot be passed upon in this appeal, because it was not raised in the tribunals a quo. Well-settled is the rule that issues not raised below cannot be raised for the first time on appeal. Thus, points of law, theories, and arguments not brought to the attention of the Court of Appeals need not — and ordinarily will not — be considered by this Court. Petitioner’s allegation cannot be accepted by this Court on its face; to do so would be tantamount to a denial of respondent’s right to due process.

Furthermore, whether respondents were able to appeal on time is a question of fact that cannot be entertained in a petition for review under Rule 45 of the Rules of Court. In general, the jurisdiction of this Court in cases brought before it from the Court of Appeals is limited to a review of errors of law allegedly committed by the court a quo.¹⁸ (Emphasis supplied)

KJ Commercial’s filing of a motion to reduce bond and delayed posting of the P2,562,930 surety bond did not render the Labor Arbiter’s 30 October 2008 Decision final and executory. The Rules of Procedure of the NLRC allows the filing of a motion to reduce bond subject to two conditions: (1) there is meritorious ground, and (2) a bond in a reasonable amount is posted. Section 6 of Article VI states:

No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary award.

The mere filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph shall not stop the running of the period to perfect an appeal.

The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period to perfect an appeal. In McBurnie v. Ganzon,¹⁹ the Court held:

x x x [T]he bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal.²⁰

The NLRC has full discretion to grant or deny the motion to reduce bond,²¹ and it may rule on the motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether the appellant’s motion is indeed based on “meritorious ground” and whether the bond he or she posted is of a “reasonable amount.” Thus, the appellant always runs the risk of failing to perfect an appeal.

Section 2, Article I of the Rules of Procedure of the NLRC states that, “These Rules shall be liberally construed to carry out the objectives of the Constitution, the Labor Code of thePhilippinesand other relevant legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and settlement of labor disputes.” In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes final and executory.

In the present case, KJ Commercial filed a motion to reduce bond and posted a P50,000 cash bond. When the NLRC denied its motion, KJ Commercial filed a motion for reconsideration and posted the full P2,562,930 surety bond. The NLRC then granted the motion for reconsideration.

In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista,²² the Court held:

Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be perfected only upon the posting of a cash or surety bond. The Court, however, has relaxed this requirement under certain exceptional circumstances in order to resolve controversies on their merits. These circumstances include: (1) fundamental consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and the issue involved.²³

In Rosewood Processing, Inc. v. NLRC,²⁴ the Court held:

The perfection of an appeal within the reglementary period and in the manner prescribed by law is jurisdictional, and noncompliance with such legal requirement is fatal and effectively renders the judgment final and executory. The Labor Code provides:

ART. 223. Appeal. — Decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders.

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

Indisputable is the legal doctrine that the appeal of a decision involving a monetary award in labor cases may be perfected “only upon the posting of a cash or surety bond.” The lawmakers intended the posting of the bond to be an indispensable requirement to perfect an employer’s appeal.

However, in a number of cases, this Court has relaxed this requirement in order to bring about the immediate and appropriate resolution of controversies on the merits. Some of these cases include: “(a) counsel’s reliance on the footnote of the notice of the decision of the labor arbiter that the aggrieved party may appeal within ten (10) working days; (b) fundamental consideration of substantial justice; (c) prevention of miscarriage of justice or of unjust enrichment, as where the tardy appeal is from a decision granting separation pay which was already granted in an earlier final decision; and (d) special circumstances of the case combined with its legal merits or the amount and the issue involved.”

In Quiambao vs. National Labor Relations Commission, this Court ruled that a relaxation of the appeal bond requirement could be justified by substantial compliance with the rule.

In Globe General Services and Security Agency vs. National Labor Relations Commission, the Court observed that the NLRC, in actual practice, allows the reduction of the appeal bond upon motion of the appellant and on meritorious grounds; hence, petitioners in that case should have filed a motion to reduce the bond within the reglementary period for appeal.

That is the exact situation in the case at bar. Here, petitioner claims to have received the labor arbiter’s Decision on April 6, 1993. On April 16, 1993, it filed, together with its memorandum on appeal and notice of appeal, a motion to reduce the appeal bond accompanied by a surety bond for fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc. Ignoring petitioner’s motion (to reduce bond), Respondent Commission rendered its assailed Resolution dismissing the appeal due to the late filing of the appeal bond.

The solicitor general argues for the affirmation of the assailed Resolution for the sole reason that the appeal bond, even if it was filed on time, was defective, as it was not in an amount “equivalent to the monetary award in the judgment appealed from.” The Court disagrees.

We hold that petitioner’s motion to reduce the bond is a substantial compliance with the Labor Code. This holding is consistent with the norm that letter-perfect rules must yield to the broader interest of substantial justice.²⁵

In Ong v. Court of Appeals,²⁶ the Court held that the bond requirement on appeals may be relaxed when there is substantial compliance with the Rules of Procedure of the NLRC or when the appellant shows willingness to post a partial bond. The Court held that, “While the bond requirement on appeals involving monetary awards has been relaxed in certain cases, this can only be done where there was substantial compliance of the Rules or where the appellants, at the very least, exhibited willingness to pay by posting a partial bond.”²⁷

In the present case, KJ Commercial showed willingness to post a partial bond. In fact, it posted a P50,000 cash bond. In Ong, the Court held that, “Petitioner in the said case substantially complied with the rules by posting a partial surety bond of fifty thousand pesos issued by Prudential Guarantee and Assurance, Inc. while his motion to reduce appeal bond was pending before the NLRC.”²⁸

Aside from posting a partial bond, KJ Commercial immediately posted the full amount of the bond when it filed its motion for reconsideration of the NLRC’s 9 March 2009 Decision. In Dr. Postigo v. Philippine Tuberculosis Society, Inc.,²⁹ the Court held:

x x x [T]he respondent immediately submitted a supersedeas bond with its motion for reconsideration of the NLRC resolution dismissing its appeal. In Ong v. Court of Appeals, we ruled that the aggrieved party may file the appeal bond within the ten-day reglementary period following the receipt of the resolution of the NLRC to forestall the finality of such resolution. Hence, while the appeal of a decision involving a monetary award in labor cases may be perfected only upon the posting of a cash or surety bond and the posting of the bond is an indispensable requirement to perfect such an appeal, a relaxation of the appeal bond requirement could be justified by substantial compliance with the rule.³⁰

WHEREFORE, the Court DENIES the petition and AFFIRMS the 29 April 2011 Decision of the Court of Appeals in CA-G.R. SP No. 115851.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

ARTURO D. BRION

Associate Justice

JOSE PORTUGAL PEREZ MARIA LOURDES P. A. SERENO

Associate Justice Associate Justice

BIENVENIDO L. REYES

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

1 Rollo, pp. 11-41.

2Id. at 48-55. Penned by Associate Justice Samuel H. Gaerlan, with Associate Justices Rosmari D. Carandang and Ramon R. Garcia concurring.

3Id. at 149-157. Penned by Presiding Commissioner Herminio V. Suelo, with Commissioners Angelo Ang Palana and Numeriano D. Villena concurring.

4Id. at 163-167.

5Id. at 102-119. Penned by Labor Arbiter Mariano L. Bactin.

6Id. at 62.

7Id. at 108-111.

8Id. at 132-136.

9Id. at 133-135.

10Id. at 137-138.

11Id. at 150-156.

12Id. at 166.

13Id. at 168-188.

14Id. at 53.

15Id. at 174-176.

16Id. at 51-52.

17 449 Phil. 271 (2003).

18Id. at 284-285.

19 G.R. Nos. 178034, 178117, 186984 and 186985, 18 September 2009, 600 SCRA 658.

20Id. at 669.

21Id. at 671.

22 G.R. No. 187693, 13 July 2010, 625 SCRA 75.

23Id. at 84.

24 352 Phil. 1013 (1998).

25Id. at 1028-1031.

26 482 Phil. 170 (2004).

27Id. at 181.

28Id. at 181-182.

29 515 Phil. 601 (2006).

30Id. at 607-608.