G.R. No. 255656 - Paiton vs. Armscor Global Defense, Inc.

Petitioners – Jules King M. Paiton, James C. Adriatico, Isagani M. Ubalde, Roland A. Agustin, Mario S. Manahan, Jr., and Jesrome C. Siega – were employed as Machine Operators by Armscor Global Defense, Inc. (formerly Arms Corporation of the Philippines).
Between 2016 and 2017, these petitioners separately filed complaints for regularization and payment of benefits before the NLRC’s Arbitration Branch. They contended that:

They were de facto regular employees of Armscor by operation of law for having rendered work essential to Armscor’s business over one year;
Armscor intentionally transferred them to various manpower agencies, including Manpower Outsourcing Services, Inc. (MOSI), to avoid granting them regular status; and
Their true employer was Armscor, which hired them, paid their salaries, and exercised direct control and supervision over their work.

During the pendency of the regularization cases, on June 16, 2017, Armscor barred the petitioners from entering the work premises when MOSI pulled them out after the service contract between Armscor and MOSI had expired and was not renewed.
As a consequence, petitioners subsequently filed an illegal constructive dismissal case on July 6, 2017 (NCR Case No. NCR-07-09884-17) before the NLRC. In this complaint, they reiterated their claim of being regular employees entitled to security of tenure and contended that their dismissal was unjust or without authorized cause.

Armscor, along with its officers (Martin Tuason and Atty. Ermilando O. Villafuerte), maintained that:

Petitioners were employed by MOSI rather than Armscor; and
They bore no liability regarding the claims of illegal constructive dismissal, asserting that the dismissal was valid due to the contractual expiration with MOSI.

MOSI, on its part, argued for the dismissal of the illegal dismissal complaint, citing forum shopping because the issues, facts, and parties in the regularization cases were essentially the same as those in the illegal dismissal case.

The Labor Arbiter (LA) in its Decision dated May 8, 2018 dismissed the illegal constructive dismissal complaint on the ground of litis pendentia or forum shopping, noting the substantial similarity between the regularization and dismissal cases.
The NLRC affirmed the LA’s ruling through its Decision dated October 22, 2018, emphasizing that the pending regularization cases required resolution first before addressing issues of dismissal.
Petitioners’ motion for reconsideration of the NLRC ruling was denied in a Resolution dated December 27, 2018.
The Court of Appeals (CA) subsequently denied a petition for certiorari in its Decision dated June 30, 2020, finding no grave abuse of discretion by the NLRC. A later motion for reconsideration was also denied by the CA Resolution dated January 8, 2021.

Petitioners elevated the matter to the Supreme Court through a Petition for Review on Certiorari challenging the CA’s affirmation of the NLRC and LA rulings on the ground of forum shopping.
The core issue involved whether the CA correctly determined that the NLRC had no grave abuse of discretion in dismissing the illegal constructive dismissal case based on the doctrine of litis pendentia.

Whether the Court of Appeals correctly held that the NLRC did not commit grave abuse of discretion, amounting to a lack or excess of jurisdiction, when it affirmed the dismissal by the Labor Arbiter of the illegal constructive dismissal case due to litis pendentia or forum shopping.
Whether the filing of both the regularization and illegal constructive dismissal cases by the same petitioners constitutes forum shopping, given that both sets of cases involve similar parties, yet distinct causes of action and reliefs.
Whether the distinct factual circumstances surrounding the illegal constructive dismissal case, as opposed to the regularization cases, justify its separate adjudication despite overlapping issues related to the employer-employee relationship.