G.R. No. 117442-43 - FEM's Elegance Lodging House vs. Murillo

Petitioners are FEM’s Elegance Lodging House, owned by Fenitha Saavedra and managed by Iries Anthony Saavedra, a business enterprise engaged in providing lodging accommodations.
Respondents are former employees of the petitioners whose services were terminated between March and April 1994.
After their dismissal, the private respondents separately filed claims before the NLRC Regional Arbitration Branch (Region X) for unpaid benefits such as minimum wage, overtime pay, rest day pay, holiday pay, full thirteenth-month pay, and separation pay.

A pre-arbitration conference was held on May 31, 1994, where it was agreed that the cases would be consolidated and that both parties would file their position papers within thirty days from the conference or by June 30, 1994.
Petitioners filed their position paper on June 29, 1994.
On July 7, petitioners confirmed with the NLRC that private respondents had not yet filed their position paper.

On July 8, petitioners filed a Motion to Dismiss on the ground that private respondents failed to file their position paper within the agreed period.
Private respondents belatedly filed their position paper on July 15.
On July 18, petitioners filed a Motion to Expunge the position paper filed by private respondents from the case records.

A notice of a clarificatory hearing was issued on August 23, setting the hearing for September 7.
Petitioners, prior to the hearing, filed a Motion to Resolve their earlier motions (to dismiss and to expunge the position paper).
On September 21, the Labor Arbiter issued an Order denying the petitioners’ motions.

The Arbiter reasoned that a fifteen-day delay in filing the position paper was not unreasonable.
He underscored that substantive rights should not be sacrificed to technicalities, citing Article 4 of the Labor Code which mandates that doubts in interpretation be resolved in favor of labor.
He also referred to Section 15, Rule 5 of the Revised Rules of Court, asserting that the delay did not justify dismissal under the exclusio unius est excludio alterius principle.

Petitioners filed a petition for certiorari under Rule 65 of the Revised Rules of Court, charging the Labor Arbiter with grave abuse of discretion in issuing the cited order.
They claimed that they were denied due process since the Arbiter did not cite private respondents in contempt for violating the agreed filing period.
Petitioners argued that technical rules should not override substantive rights and that their defense was meritorious.

The petitioners failed to exhaust their remedies under Article 223 of the Labor Code which requires appeal of the Arbitrator’s order to the NLRC before approaching the Court.
The Court noted a well-settled jurisprudence that favors substantial justice in labor disputes over strict observance of procedural rules.
The decision also highlighted that technical lapses such as the delay in filing a position paper may not be used to dispose of a case in labor matters.

Whether the fifteen-day delay in the filing of the private respondents’ position paper justifies the dismissal of the complaint or the expunging of the position paper from the records.
Whether petitioners were denied due process by the Labor Arbiter when they claimed that their counterparts should have been cited in contempt for not adhering to the agreed filing period.
Whether petitioners prematurely accessed the Court by filing a petition for certiorari without first exhausting their administrative remedies as mandated by Article 223 of the Labor Code.