G.R. No. 110604 - Tenorio vs. Court of Appeals

National Federation of Labor Unions (NAFLU) and Mariveles Apparel Corporation Labor Union (MACLU) filed on August 12, 1993 a complaint for illegal dismissal against Mariveles Apparel Corporation (MAC), alleging an illegal closure on July 8, 1993, non-payment of wages and separation pay under a valid Collective Bargaining Agreement (CBA), and failure to serve the required one-month notice to employees and DOLE.
NAFLU and MACLU prayed for reinstatement or separation pay, damages (actual, moral, exemplary), and attorney’s fees; they also moved on January 3, 1994 to implead Antonio C. Carag (Chairman of the Board) and Armando David (President) personally, invoking Article 212(e) of the Labor Code to guarantee satisfaction of any award.

Labor Arbiter Isabel Panganiban-Ortiguerra summoned only MAC and the unions for a pretrial conference; respondents did not appear and the case was submitted on the pleadings.
On June 17, 1994, the Arbiter granted the impleader motion ex mero motu, declared the closure illegal, ordered MAC, Carag, and David jointly and severally liable for separation pay (₱49,101,621.00) at one month per year of service, and awarded attorney’s fees of 10% of the judgment; moral and exemplary damages were denied for lack of proof.

On January 5, 1995, the NLRC Third Division denied MAC’s and Carag’s motions to reduce the ₱48,101,621.00 appeal bond, holding that merit-based reduction would intrude on the merits.

MAC, Carag, and David separately petitioned the Supreme Court (consolidated to CA G.R. SP Nos. 54404-06).
On February 29, 2000, the CA affirmed both the Arbiter’s Decision and the NLRC Resolution, finding no grave abuse in impleading Carag and David, noting their failure to observe notice requirements as evidence of bad faith, and denying bond reduction.
On March 27, 2001, the CA denied respondents’ motions for reconsideration.
On June 20 and August 13, 2001, the Supreme Court First Division denied Carag’s petition and motion for reconsideration; on June 25, 2002 and November 25, 2003, the En Banc granted leave to file a second motion and suspended the rules; the case was finally referred back to the En Banc in 2005.

Whether Arbiter Ortiguerra denied Antonio Carag due process by impleading him and holding him liable without summons, position paper, hearing, or notice of submission.
Whether the finding of Carag’s personal liability is supported by evidence of bad faith or patently unlawful acts under the Corporation Code.
Whether the NLRC committed grave abuse of discretion in denying Carag’s motion to reduce the appeal bond.