Title
Murillo vs. Sun Valley Realty, Inc.
Case
G.R. No. 67272
Decision Date
Jun 30, 1988
Maintenance workers illegally dismissed in 1980 without labor clearance; NLRC appeal timely, lack of affidavit verification non-fatal; employer liable for benefits, service leave.

Case Digest (G.R. No. 67272)
Expanded Legal Reasoning Model

Facts:

  • Employment Background
    • The petitioners were employed as maintenance men in April 1967.
    • Their primary duties involved the upkeep of roads and the water system at Sun Valley Subdivision.
  • Termination of Employment
    • On January 11, 1980, State Realty and Investment Corporation notified the petitioners that their services would be terminated effective January 31, 1980.
    • The dismissal was allegedly based on the termination of the contract between Sun Valley Realty, Inc. and State Realty and Investment Corporation.
    • No clearance—private or from the Ministry of Labor—was secured prior to the termination.
  • Filing of the Complaint
    • The petitioners filed a complaint on February 26, 1980, alleging illegal dismissal, lack of emergency living allowance, and underpayment of service incentive leave.
    • The case was submitted for decision at the Arbitration Branch of the Ministry of Labor in the National Capital Region, with the parties agreeing to rely on their respective position papers.
  • Labor Arbiter’s Decision and Subsequent Actions
    • On December 5, 1980, the Labor Arbiter rendered a decision declaring the petitioners’ dismissal illegal and ordered:
      • Payment of separation pay equivalent to one month’s salary for every year of service.
      • Payment of allowances under PD Nos. 525, 1123, and 1614 (net of amounts already received).
      • Payment of five days’ salary for every year of service as service incentive leave.
    • The decision mandated the Socio-Economic Analyst to compute the award and report within ten days.
    • A copy of the Labor Arbiter’s decision was provided to the respondents on December 18, 1980.
  • Appeal to the NLRC
    • On January 6, 1981, the respondents filed an appeal with the National Labor Relations Commission (NLRC).
    • The NLRC, on February 24, 1984, reversed the Labor Arbiter’s decision on the ground that the petitioners’ Position Paper-Affidavit was not verified, rendering it inadmissible as evidence.
  • Petition for Review and Contentions on Timeliness
    • The petitioners questioned the timeliness of the respondents’ appeal, arguing it was filed beyond the allowed ten calendar days.
    • They referenced the Vir-Jen Shipping and Marine Services, Inc. case to assert that the Labor Arbiter’s decision had become final and executory.
    • The Court, however, noted that the appeal was filed prior to the promulgation of the Vir-Jen decision and that the applicable computation period was based on working days.
  • Issues of Dismissal Legality and Clearance
    • At the time of petitioners’ dismissal, Article 278 of the Labor Code—as implemented by Rule XIV of the Rules and Regulations—mandated a prior clearance for shutdown or dismissal if the employee rendered at least one year of service during the preceding two years.
    • No clearance was secured until February 14, 1980—after the petitioners’ dismissal, unequivocally leading to the presumption of termination without just cause.
  • Dispute on Statutory Benefits and Prescription
    • Respondents contended that all benefits under PD Nos. 525, 1123, and 1614 had been fully paid, while petitioners maintained evidence of underpayment.
    • Respondents also argued that claims accruing more than three years prior to February 26, 1980, were barred by prescription under Article 292 of the Labor Code.
  • Issue on Service Incentive Leave Benefit
    • The respondents asserted that their establishment, allegedly having less than ten employees, was exempted from providing service incentive leave.
    • Petitioners countered that, notwithstanding the existence of other employees outside Sun Valley Subdivision, the general rule in the Labor Code should apply.
  • Employer Identification Issue
    • State Realty and Investment Corporation contended that it was merely acting as a managing agent, arguing that Sun Valley Realty, Inc. was the true employer.
    • The Labor Arbiter’s findings on the existence of an employer-employee relationship were treated as conclusive evidence.

Issues:

  • Timeliness of the NLRC Appeal
    • Was the respondents’ appeal filed within the prescribed ten-day period given the governing provision on working days at the time?
  • Legality of the Petitioners’ Dismissal
    • In light of the failure to secure prior clearance as mandated by Article 278 of the Labor Code and related rules, was the dismissal enacted with just cause?
  • Effect of the Non-Verification of the Position Paper-Affidavit
    • Does the lack of verification of petitioners’ affidavit constitute a fatal defect in the evidence affecting the merits of the claim?
  • Payment and Adequacy of Statutory Benefits
    • Are the petitioners entitled to allowances under PD Nos. 525, 1123, and 1614 and service incentive leave, given the evidence of underpayment?
  • Prescription of Claims
    • Should claims that accrued more than three years prior to the filing of the complaint be barred under Article 292 of the Labor Code?
  • Determination of the True Employer
    • Based on the factual findings, can State Realty and Investment Corporation be held liable as the employer despite its assertion of merely acting as managing agent?

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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