Facts:
On May 5, 1998,
Ricardo C. Samaniego filed with the Office of the
Labor Arbiter, Regional Arbitration Branch (RAB) No. II, Tuguegarao City, Cagayan, a complaint for
illegal dismissal and
damages against
Westmont Pharmaceuticals, Inc. and
United Laboratories, Inc.; he also impleaded several officers of Unilab, namely
Jose Yao Campos,
Carlos Ejercito,
Ernesto Salazar,
Eliezer Salazar, and
Jose Solidum, Jr. The complaint alleged that Unilab first hired him as
Professional Service Representative of its marketing arm, Westmont, and later promoted him as
Senior Business Development Associate, assigning him in Isabela as
Acting District Manager of Westmont and
Chairman of Unilab Special Projects. In August 1995, he was transferred to Metro Manila pending investigation involving his subordinate and physicians in Region II related to a sales discount and Rx trade-off controversy. After the transfer, he was placed under
floating status and assigned to tasks not connected with his position, including fetching physicians from the airport, making bank deposits, fetching field men, and doing messengerial work. His salary allegedly diminished because his per diem was reduced from
P13,194.00 to
P2,299.00. On June 26, 1998, Westmont and Unilab moved to dismiss, asserting
improper venue and
lack of cause of action, arguing that the complaint should have been filed with the
NLRC in Manila and that the action should only be against Westmont. The Labor Arbiter denied the motion to dismiss on August 13, 1998, citing
Section 1, Rule IV of the NLRC New Rules of Procedure allowing the Labor Arbiter to
order a change of venue in meritorious cases. Westmont and Unilab reserved their right to contest the denial during the preliminary conference. On September 3, 1998, they filed an
Urgent Petition with the NLRC to change or transfer venue, and on the same date filed in the Labor Arbiter’s office a motion to suspend proceedings pending resolution. On September 8, 1998, the Labor Arbiter required position papers within twenty (20) days and stated the case would be deemed submitted for decision thereafter. On September 22, 1998, the NLRC directed the Labor Arbiter to forward the records to the NLRC; the Labor Arbiter retained complete duplicate original copies and set the case for hearing. Westmont and Unilab repeatedly sought cancellation of hearing dates due to the unresolved venue petition; they did not submit position papers or attend the hearing, and the Labor Arbiter decided based on the evidence submitted by Samaniego. On December 16, 1998, the Labor Arbiter found
constructive dismissal, ordered reinstatement without loss of seniority rights and with
full backwages, per diem differentials, profit share,
actual, moral, and exemplary damages, and
ten percent (10%) attorneys’ fees. Westmont and Unilab appealed to the NLRC on January 21, 1999. The NLRC, in a Resolution dated August 31, 1999, dismissed the venue petition as without jurisdiction or merit, declared the Labor Arbiter’s decision
null and void, and explained that despite pendency of the venue petition treated as an appeal, the Labor Arbiter retained complete duplicate records, proceeded to further hearings, and rendered a decision, thereby allegedly depriving respondents-appellants of due process. The NLRC sustained the denial of the motion to dismiss but directed remand for further proceedings and ordered payment of
P230,720.30 representing salary from January 1, 1999 to August 31, 1999 less any salary collected by way of execution pending appeal. The parties’ motions for reconsideration were denied by the NLRC on June 27, 2000. On January 8, 2001, the
Court of Appeals set aside the NLRC resolutions and reinstated and affirmed the Labor Arbiter’s December 16, 1998 decision with modification: it reduced
moral damages from
P5,000,000.00 to
P500,000.00 and
exemplary damages from
P1,000,000.00 to
P300,000.00. The present consolidated petitions for review on certiorari assailed the Court of Appeals’ rulings, with Westmont and Unilab arguing improper venue and denial of due process, and Samaniego arguing that the reduction of moral and exemplary damages was improper. The Court, after resolving the appeal, affirmed the Court of Appeals, but modified the disposition by ordering
separation pay in lieu of reinstatement and deleting moral and exemplary damages.
Issues:
Whether the Court of Appeals erred in affirming the Labor Arbiter’s finding of
constructive dismissal and in ruling that Samaniego was
not denied due process, and whether the proper relief should include reinstatement or separation pay and the inclusion or deletion of
moral and exemplary damages.
Ruling:
Ratio:
Doctrine: