Facts:

The case involves American Home Assurance Company, Inc. and Leslie J. Mouat as petitioners against the National Labor Relations Commission (NLRC), Labor Arbiter Manuel R. Caday, and private respondents Virgilio Malinao, Rosemilo Gacusan, and Dominador Loriaga. The events leading to this case began on June 6, 1991, when Malinao, Gacusan, and Loriaga filed a complaint for regularization, sick leave pay, vacation leave pay, and night shift differential pay against the petitioners before the National Capital Region Arbitration Branch of the NLRC. On July 10, 1991, the petitioners filed a Motion to Dismiss concerning Malinao and Gacusan, claiming that a compromise agreement had settled the case. However, on August 5, 1991, Malinao and Loriaga filed an amended complaint for illegal dismissal and service incentive leave. The petitioners' motion to dismiss was opposed by Malinao and Gacusan, who alleged that they were misled into signing the compromise agreement.

On February 1...

Facts:

Timeline of Proceedings and Pleadings

• On June 6, 1991, private respondents Virgilio Malinao, Rosemilo Gacusan, and Dominador Loriaga filed a complaint before the National Capital Region Arbitration Branch of the NLRC seeking relief for regularization, along with claims for sick leave pay, vacation leave pay, and night shift differential pay against petitioners American Home Assurance Co., Inc. and/or Leslie J. Mouat.
• On July 10, 1991, petitioners filed a Motion to Dismiss with respect to the claims of respondents Malinao and Gacusan, alleging that they had settled their claims through a compromise agreement.
• On August 5, 1991, prior to action on the motion to dismiss, private respondents Malinao and Loriaga filed an Amended Complaint adding charges of illegal dismissal and service incentive leave.
• On August 16, 1991, respondents Malinao and Gacusan filed an Opposition to the motion to dismiss, claiming that petitioners used undue influence and trickery based on their educational backgrounds to induce the signing of the compromise agreement; a Supplemental Opposition was later filed on September 21, 1991.
• On October 9, 1991, petitioners filed a Rejoinder to the opposition filed by respondents Malinao and Gacusan.
• On February 13, 1992, Labor Arbiter Manuel R. Caday issued an Order denying the Motion to Dismiss and directing the parties to submit simultaneous position papers; complainants were also ordered to return the money received for settlement purposes before the next scheduled hearing (noting an apparent typographical error in the date, which should read 1992).
• On April 6, 1992, before the respondents could file their position papers, petitioners filed an Urgent Motion to Dismiss on the ground that respondents Malinao and Gacusan had failed to comply with the directive to refund the settlement money.
• On April 24, 1992, private respondents Malinao, Gacusan, and Loriaga, acting independently due to neglect by their counsel, filed an Opposition to the Urgent Motion to Dismiss.
• On April 30, 1992, Labor Arbiter Caday issued an Order dismissing the case with prejudice against Rosemilo Gacusan and Virgilio Malinao while allowing respondent Dominador Loriaga to proceed pending the submission of Position Papers for his claim.
• On May 27, 1992, petitioners filed an Ex-Parte Motion for Postponement and Revision of the Title of the Case, seeking to reflect Dominador G. Loriaga as the sole complainant following the dismissal with prejudice of the other claims.
• On June 5, 1992, Atty. Albert G. Fanoga served notice of his withdrawal as counsel of record for respondents Malinao, Gacusan, and Loriaga.
• On August 10, 1992, in a hearing before Labor Arbiter Caday, new counsel Atty. Cornelio G. Montesclaros was furnished a copy of the April 30, 1992 Order, and on the same day, respondent Loriaga moved for dismissal of his own case without prejudice to allow refiling; this motion was granted on August 11, 1992.
• On December 14, 1992, respondent Malinao filed a Motion to Admit the Motion for Reconsideration, which petitioners opposed on December 22, 1992 by filing a Motion to Deny Due Course.
• The filing of the motion to admit the motion for reconsideration was treated as an appeal and was subsequently elevated to the NLRC for adjudication.
• On June 30, 1993, the NLRC issued a Resolution setting aside the April 30, 1992 Order, directing the Labor Arbiter to hear the monetary claims on their merits (including that of Dominador Loriaga), and on August 30, 1993, the NLRC denied petitioners’ Motion for Reconsideration of the resolution.

Contentions and Allegations Raised by Petitioners

• Petitioners argued that the NLRC committed grave abuse of discretion amounting to a lack or excess of jurisdiction by taking cognizance of an untimely Motion for Reconsideration and ordering the hearing on the merits despite various supervening events.
• It was contended that respondent Rosemilo Gacusan’s claim should remain dismissed since he neither filed a motion for reconsideration nor appealed the dismissal; his subsequent actions, including receiving financial assistance and executing a General Release and Settlement Agreement, barred him from further pursuing his claims.
• Similarly, petitioners claimed that the reinstatement of respondent Dominador Loriaga’s case was irregular, particularly since he had moved to have his complaint dismissed without prejudice and did not appeal that decision.

Consolidated Factual Findings

• The chronology of pleadings, rulings, and motions reveals inconsistent and unorthodox handling of motions, appeals, and filings.
• The Labor Arbiter’s conditions, such as the mandatory refund of settlement money before further proceedings and the timely filing of appeals, became central to the dispute.
• The NLRC’s subsequent orders, especially the resolution and subsequent denial of motion for reconsideration, are shown to conflict with the established procedural rules particularly regarding reglementary periods for appeals.

Issue:

Jurisdiction and Timeliness of Motions

• Whether the NLRC abused its discretion by giving due course to a Motion for Reconsideration (and treating it as an appeal) which was filed way beyond the 10-day reglementary period under Article 223 of the Labor Code.
• Whether the failure of respondents Malinao and Gacusan to refund the settlement money invalidated their claims and justified the dismissal with prejudice.

Validity of Reinstating Dismissed Claims

• Whether it was proper for the NLRC to reinstate the claim of respondent Rosemilo Gacusan despite his non-participation in the motion for reconsideration and his subsequent actions (i.e., signing a General Release and Settlement Agreement and receiving monetary assistance).
• Whether the reinstatement of respondent Dominador Loriaga’s claim – who had moved for dismissal without prejudice and did not appeal his initial dismissal – was legally tenable.

Implications of Counsel Negligence and Client Responsibility

• Whether extreme poverty or counsel’s negligence (as in the case of Atty. Montesclaros failing to file on time) could justify the belated filing of an appeal or motion for reconsideration, thereby affecting the adjudication of the case.

Ruling:

• (Subscriber-Only)

Ratio:

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Doctrine:

• (Subscriber-Only)