G.R. No. 126773 - Rubberworld , Inc. vs. National Labor Relations Commission

Rubberworld (Phils.), Inc. is a domestic corporation engaged primarily in manufacturing footwear, bags, and garments.
On November 24, 1994, the petitioner filed a petition with the Securities and Exchange Commission (SEC) for suspension of payments, seeking a declaration that it was in a state of suspension of payments.
The petition also requested that creditors be restrained from enforcing their claims and prayed for the creation of a management committee and the approval of a proposed rehabilitation plan and memorandum of agreement with its creditors.
On December 28, 1994, the SEC granted the petition by issuing an order which, among other directives, provided for the creation of a management committee and suspended all pending actions for claims against Rubberworld. This suspension covered a wide spectrum of actions, rendering incidents for injunctions, attachments, foreclosures, and similar remedies moot and academic.

Between April and July 1995, private respondents, who were employees of Rubberworld, filed complaints alleging illegal dismissal, unfair labor practice, and claims for damages as well as entitlements such as separation pay, retirement benefits, 13th month pay, and service incentive pay.
Relying on the SEC Order, Rubberworld moved to suspend the labor cases, citing prior jurisprudence (e.g., BF Homes vs. Court of Appeals, Sibal & Sons, Inc. vs. Elbinias, and Bank of Philippine Islands vs. Court of Appeals) to support the motion for suspension of pending proceedings.
In an order dated September 25, 1995, the Labor Arbiter denied the petitioner's motion to suspend the labor cases. The ruling held that the SEC injunction applied only to the enforcement of established rights and did not extend to the suspension of proceedings where the claims and liabilities had yet to be determined.

Rubberworld subsequently appealed the denial of its motion to suspend the labor proceedings to the National Labor Relations Commission (NLRC).
On April 26, 1996, the NLRC issued a resolution dismissing Rubberworld’s appeal for lack of merit, thereby effectively sustaining the Labor Arbiter’s ruling.
A subsequent motion for reconsideration filed by Rubberworld was likewise denied by the NLRC on June 20, 1996.
Dissatisfied with these developments, Rubberworld elevated the matter by filing a petition for certiorari under Rule 65, challenging the NLRC’s resolutions on the ground that they conflicted with the automatic suspension provided under Presidential Decree 902-A.

Presidential Decree 902-A, as amended, explicitly states that once a management committee or rehabilitation receiver is appointed, all actions for claims against the affected corporation pending before any court, tribunal, board, or body shall be automatically suspended.
The law is designed to allow the management committee or rehabilitation receiver to focus solely on restructuring and rehabilitating the financially distressed corporation without the diversion of attention and resources towards defending multiple litigation claims.
This suspension measure aims to protect the interests of various stakeholders including employees, creditors, stockholders, and the general public by facilitating an orderly and viable rehabilitation process.

Whether the NLRC acted without or in excess of its jurisdiction by refusing to suspend labor proceedings despite the SEC Order pursuant to PD 902-A.
Whether the NLRC’s issuance of resolutions that allowed the labor cases to proceed constituted a grave abuse of discretion amounting to lack of jurisdiction.

Whether the suspension order under PD 902-A, which mandates that all pending actions for claims against a company be suspended upon the appointment of a management committee, includes labor claims against the petitioner.
How the provisions of Article 217 of the Labor Code interact with PD 902-A, particularly regarding the jurisdiction to hear labor disputes and the suspension of such cases during a rehabilitation process.