Professional Documents
Culture Documents
11a. Miguel Etal. vs. JCT Group
11a. Miguel Etal. vs. JCT Group
JCT GROUP
2005 Mar 16; G.R. No. 157752
PANGANIBAN, J.:
Labor arbiters are required to state the factual and legal bases of their
decisions. They thereby conform to the requirement of due process and fair
play, because parties to the controversy are informed of why and how such
decisions were reached. When no factual findings support the conclusions
made in a labor decision, a remand of the case for further proceedings may
become necessary.
The Case
"WHEREFORE, the petition is GIVEN DUE COURSE and the assailed decisions
of the National Labor Relations Commission and the labor arbiter are
ANNULED and SET ASIDE. Let this case be remanded to the Arbitration
Branch of the National Labor Relations Commission for further
proceedings."[4]
The Facts
Soleil'] and American Inter-Fashion Corporation (or 'AIFC') took over Glorious
Sun's manufacturing plant, facilities and equipment and absorbed its
employees, including the [petitioners].
"On April 24, 1989, JCT Group, Inc. (or 'JCT') and De Soleil, thru its Officer-InCharge and Head of the PCGG Management Team, executed a Management
and Operating Agreement (or 'MOA') for the purpose of servicing De Soleil's
export quota to ensure its rehabilitation and preserve its viability and
profitability. The MOA, which was for a period of one year commencing on
May 1, 1989 and renewable yearly at the option of JCT, expired on May 1,
1990 as it was not renewed.
"In April 1993, [petitioners] filed complaints for illegal dismissal and payment
of backwages and other monetary claims before the National Labor Relations
Commission (or 'NLRC') Arbitration Branch against De Soleil, AIFC, PCGG,
Glorious Sun, JCT, Nemesio Co and Vicente Cuevas III (or 'Cuevas'). The
cases were eventually consolidated.
"On May 26, 1993, JCT and Cuevas x x x filed a motion to dismiss founded on
lack of jurisdiction over the subject matter of the action because of the
absence of [an] employer-employee relationship between them and
[petitioners].
'1) Declaring [De Soleil, AIFC, PCGG, Glorious Sun, JCT, Nemesio Co
and Cuevas] jointly and severally guilty of illegal dismissal and to pay
complainants backwages, separation pay, service incentive leave pay, 13th
month pay, unpaid salaries as computed by the Research and Information
Unit x x x;
'2) Declaring [De Soleil, AIFC, PCGG, Glorious Sun, JCT, Nemesio Co
and Cuevas] liable for the payment of attorney's fees equivalent to ten (10%)
percent of the total awards or P3,691,743.06.
"In an order dated September 20, 1995, the NLRC reduced the amount of the
appeal bond to P5,000,000.00 [which respondents and Glorious Sun were
each required to submit]. [Respondents] filed a motion for reconsideration of
said order by way of further reduction of the bond to P500,000.00. However,
the motion was denied per order dated April 15, 1996. [Respondents]
elevated the matter to the Supreme Court via a petition for certiorari (G.R.
No. 125749) but it was denied per resolution dated September 2, 1996.
[Respondents' petition was denied with finality in a resolution dated
November 13, 1996.[6]]
"In a decision dated September 12, 1996, the NLRC modified the labor
arbiter's decision by absolving Glorious Sun from liability and dismissing
[respondents'] appeal. x x x
The CA reversed the Decision of the NLRC and remanded the case to
the labor arbiter for further proceedings. The appellate court ruled that the
circumstances presented factual questions whose resolution had to precede
that of the issue of whether private respondents were liable to petitioners. It
found no factual basis for the ruling that JCT had become the employer of
petitioners after the cessation of operations of Glorious Sun. Similarly, the
Decisions of the NLRC and the labor arbiter failed to explain the reason for
holding Cuevas solidarily liable with AIF, De Soleil and JCT.[8]
The Issue
"1.
Whether or not, [the] Court of Appeals committed grave abuse of
discretion amounting to lack or x x x excess of jurisdiction in giving due
course to x x x respondents' Petition despite the said x x x respondents'
[failure] to perfect their appeal with the National Labor Relations
Commission.
"2.
Whether or not, [the] Court of Appeals committed grave abuse of
discretion amounting to lack or x x x excess of jurisdiction in giving due
course to x x x respondents' Petition [when] the labor arbiter and the
National Labor Relations Commission did not commit grave abuse of
discretion in rendering their respective decisions.
"3.
Whether or not, [the] Court of Appeals committed grave abuse of
discretion amounting to lack or x x x excess of jurisdiction in giving due
course to x x x respondents' Petition despite the [fact that] x x x respondents
failed to file a motion for reconsideration [of] the September 12, 1996
Decision of the National Labor Relations Commission."[10]
First Issue:
As the second issue is intertwined with the first and the third issues, it
will be resolved first. Petitioners contend that the CA should not have
remanded the case for further proceedings, because the labor arbiter and
the NLRC had committed no grave abuse of discretion in their Decisions.[11]
We disagree.
No Findings of Fact
In the present factual milieu, the labor arbiter and the NLRC gravely
abused their discretion when they ruled in favor of herein petitioners without
determining the existence of an employer-employee relationship between
them and respondents. The Decisions were silent on why JCT and Cuevas
were held liable. The following observations of the appellate court are in
point:
xxx
xxx
xxx
"The NLRC decision is silent on the basis for its ruling that JCT
became the employer of [petitioners] after Glorious Sun ceased operations,
save for its conclusion that petitioners 'were absorbed by, or their work
continued under x x x JCT'. Similarly, the NLRC decision, just like that of the
labor arbiter, does not state the reason for the decreed solidary liability of
Cuevas x x x with JCT, De Soleil and AIF.
"Given the factual backdrop of the case, several nagging questions have not
been resolved. Among them:
x x x Was there [an] employer-employee
relationship between JCT and [petitioners] and, if so, when should such
relationship be reckoned? x x x Why was Cuevas adjudged solidary liable
with AIF, De Soleil and JCT?"[13]
The facts and the law on which decisions are based must be clearly and
distinctly expressed.[14] The failure of the labor arbiter and the NLRC to
express the basis for their Decisions was an evasion of their constitutional
duty, an evasion that constituted grave abuse of discretion.
"This Court has previously held that judges and arbiters should draw
up their decisions and resolutions with due care, and make certain that they
truly and accurately reflect their conclusions and their final dispositions. x x
x. The same thing goes for the findings of fact made by the NLRC, as it is a
settled rule that such findings are entitled to great respect and even finality
when supported by substantial evidence; otherwise, they shall be struck
down for being whimsical and capricious and arrived at with grave abuse of
discretion. It is a requirement of due process and fair play that the parties to
a litigation be informed of how it was decided, with an explanation of the
factual and legal reasons that led to the conclusions of the court. A decision
that does not clearly and distinctly state the facts and the law on which it is
based leaves the parties in the dark as to how it was reached and is
especially prejudicial to the losing party, who is unable to pinpoint the
possible errors of the court for review by a higher tribunal."[16]
Remand for
Further Proceedings
Where a judgment fails to make findings of fact, the case may be remanded
to the lower tribunal to enable it to determine them.[17] It is necessary to
remand the present case for further proceedings, because the labor arbiter
and the NLRC failed to make the factual findings needed to resolve the
controversy.
Indeed, the only way to find out whether Respondents JCT and Cuevas are
liable to petitioners is by remanding the case to the lower court. To uphold
the Decisions of the labor arbiter and the NLRC at this
Second Issue:
The first and the third issues raised by petitioners refer to alleged
procedural infirmities. They argue that because respondents allegedly failed
to post the appeal bond, the latter failed to perfect their appeal to the NLRC.
[25] Petitioners also argue that because respondents also failed to file a
motion for reconsideration of the NLRC's Decision,[26] the latter's Petition for
Certiorari filed with the CA should have been denied outright.
Posting of an
Appeal Bond
Article 223 of the Labor Code regulates the posting of an appeal bond.
The pertinent portion states as follows:
cases, however, following the rule that substantial justice is better served by
allowing appeals on the merits.[28] The policy of labor laws is to liberally
construe rules of procedure[29] and settle controversies according to their
merits, not to dismiss them by reason of technicalities.[30]
In the present case, the Decision of the labor arbiter is a patent nullity,
because it failed to state the factual and legal bases for its conclusions. The
award granted -- the basis for the appeal bond -- was a staggering
P37,557,359.08,[31] for which no factual findings against respondents had
been made. On April 26, 1995, the latter
filed with the NLRC an Urgent Motion for the Reduction of the Bond. The
Motion was later elevated to this Court, which decided on it with finality only
on November 13, 1996. Under the circumstances, the CA did not err in
liberally construing the provision of the law requiring the filing of a bond and
in holding that the NLRC should have given respondents ample time to post
the appeal bond.
Reconsideration
Taken together, the circumstances of the present controversy place the case
within the exceptions to the rule requiring a motion for reconsideration. As
the Court has declared above, the NLRC Decision is a patent nullity and
would, if sustained, violate respondents' right to due process.
Final Observation
The Court observes that the CA made a finding that the Decisions of
the labor arbiter and the NLRC had included a monetary award for individuals
who were not signatories to the Complaint.[33] Those individuals are not
parties to the case and must thus be dropped therefrom.
SO ORDERED.
ARTEMIO V. PANGANIBAN
Associate Justice
Chairman, Third Division
W E C O N C U R:
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
RENATO C. CORONA
Associate Justice
CANCIO C. GARCIA
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.
ARTEMIO V. PANGANIBAN
Associate Justice
Chairman, Third Division
CERTIFICATION
Chief Justice
since their properties would be deprived for no factual and legal basis.
Similarly, if this Court dismisses the complaint, it would be against
petitioners' rights because it was not their fault that the labor arbiter and the
NLRC failed to properly resolve the controversy.
It is also pertinent that private respondents' appeal to the NLRC was filed on
May 4, 1995, at the time when there was still a pending incident with regards
to the amount of bond. The NLRC decision that dismissed private
respondents' appeal was promulgated on September 12, 1996.
The amount of bond was not yet settled both at the time private
respondents filed their appeal and when the NLRC promulgated its decision.
It would be unreasonable to strictly apply the bond requirement when its
amount was still subject for deliberation at the time of appeal and judgment.
The CA correctly held that, at the very least, the NLRC should have given
private respondents ample time to post the appeal bond when this Court
issued the September 2, 1996 resolution that denied private respondents'
petition to reduce the amount of bond.[34]
*
The Petition impleaded the Court of Appeals as a respondent.
However, under 4, Rule 45 of the Rules of Court, the CA should no longer be
made a respondent in a petition for review on certiorari. For this reason, the
JCT Group, Inc., and Vicente Cuevas will henceforth be referred to as
"respondents," not "private respondents."
[1]
[2]
Id., pp. 39-51. Thirteenth Division. Penned by Justice Edgardo P.
Cruz, with the concurrence of Justices Oswaldo D. Agcaoili (Division
chairman) and Amelita G. Tolentino.
[3]
Id., p. 38.
[4]
[5]
It appears that the CA, NLRC, and labor arbiter committed a
typographical error. As stated on p. 5 of respondents' Memorandum (rollo, p.
179), the correct spelling is "Soleil" -- a French word meaning "sun."
[6]
[7]
[8]
[9]
The case was deemed submitted for decision on June 10, 2004,
upon this Court's receipt of respondents' Memorandum, signed by Attys.
Rafael A. L. Aquino and Benjamin C. Santos. The Court received petitioners'
Memorandum, signed by Atty. Jose C. Evangelista, on June 7, 2004.
[10]
[11]
[12]
Madrigal Transport, Inc. v. Lapanday Holdings Corporation, GR No.
156067, August 11, 2004; Cuison v. Court of Appeals, 351 Phil. 1089, 1102,
April 15, 1998; Lalican v. Vergara, 276 SCRA 518, 528, July 31, 1997; Pure
Foods Corporation v. NLRC, 171 SCRA 415, 426, March 21, 1989; Palma v. Q
& S, Inc., 123 Phil. 958, 960, May 19, 1966.
[13]
[14]
[15]
[16]
Id., p. 706, per Panganiban, J. Also cited in San Jose v. National
Labor Relations Commission, 355 Phil. 759, 768, August 17, 1998; Anino v.
National Labor Relations Commission, 352 Phil. 1098, 1110, May 21, 1998;
Caltex Refinery Employees Association v. Brillantes, 344 Phil. 624, 651,
September 16, 1997.
[17]
See St. Martin Funeral Home v. National Labor Relations
Commission, 356 Phil. 811, 824, September 16, 1998. See also Ungson v.
Basco, 29 Phil. 575, 577, February 23, 1915; Alindogan v. Insular
Government, 15 Phil. 168, 169, February 10, 1910.
[18]
[19]
[20]
Sonza v. ABS-CBN Broadcasting Corporation, GR No. 138051, June
10, 2004, Abante v. Lamadrid Bearing & Parts Corp., GR No. 159890, May
28, 2004; Trader's Royal Bank v. National Labor Relations Commission, 378
Phil. 1081, 1086, December 22, 1999; Ruga v. National Labor Relations
Commission, 181 SCRA 266, 273, January 22, 1990.
[21]
Ibid.
[22]
Insular Life Assurance Co., Ltd. v. National Labor Relations
Commission, 350 Phil. 918, 926, March 12, 1998.
[23]
Alliance of Democratic Free Labor Organization v. Laguesma, 325
Phil. 13, 28, March 11, 1996; Gelmart Industries (Phils.), Inc. v. Leogardo Jr.,
155 SCRA 403, 409, November 5, 1987; Ang Tibay v. Court of Industrial
Relations, 69 Phil. 635, 642, February 27, 1940.
[24]
Velarde v. Social Justice Society, GR No. 159357, April 28, 2004;
Yao v. Court of Appeals, 344 SCRA 202, 220, October 24, 2000.
[25]
[26]
[27]
Coral Point Development Corporation, 383 Phil. 456, 463, February
28, 2000; Viron Garments Manufacturing Co., Inc. v. National Labor Relations
Commission, 207 SCRA 339, 342, March 18, 1992.
[28]
Rosewood Processing, Inc. v. National Labor Relations Commission,
352 Phil. 1013, 1029, May 21, 1998; Mabuhay Development Industries v.
National Labor Relations Commission, 351 Phil. 227, 235, March 25, 1998;
Star Angel Handicraft v. National Labor Relations Commission, 236 SCRA 580,
585, September 20, 1994; Blancaflor v. National Labor Relations Commission,
218 SCRA 366, 371, February 2, 1993; YBL v. National Labor Relations
Commission, 190 SCRA 160, 164, September 28, 1990.
[29]
Cosico Jr. v. National Labor Relations Commission, 338 Phil. 1080,
1089-1090, May 23, 1997.
[30]
UERM-Memorial Medical Center v. National Labor Relations
Commission, 336 Phil. 66, 71, March 3, 1997; Ruga v. National Labor
Relations Commission, supra, p. 272.
[31]
[32]
Chas Realty and Development Corporation v. Talavera, 397 SCRA
84, 91, February 6, 2003; Philippine National Construction Corporation v.
National Labor Relations Commission, 354 Phil. 274, 281, July 10, 1998. See
also Matute v. Court of Appeals, 136 Phil. 157, 191-192, January 31, 1969.
[33]
[34]