Title
Cada vs. Time Saver Laundry
Case
G.R. No. 181480
Decision Date
Jan 30, 2009
Josefina Cada, a TSL employee, filed for illegal dismissal and monetary claims. Improper summons service on owner Leslie Perez was contested, but SC ruled substantial compliance upheld due process, favoring labor rights.
improper service of summons
monetary award
illegal dismissal
A

Case Summary (G.R. No. 181480)

The Labor Arbiter Case and Underlying Complaint

Petitioner alleged that she worked 12 hours a day, from 9:00 a.m. to 9:00 p.m., at a salary of P220.00 per day, but was allegedly not paid overtime pay and was not granted several benefits, including holiday pay, premium pay for holidays and rest days, service incentive leave pay (SILP), and thirteenth month pay. She further alleged that on 7 May 2003, management accused her of quarreling with a co-employee, sent her home, and prevented her from working further without giving her an opportunity to explain and defend herself. Petitioner then filed her NLRC complaint dated 21 May 2003, docketed as NLRC-NCR Case No. 05-06071-03, seeking payment for illegal dismissal, underpayment of salary, nonpayment of overtime pay, holiday pay, premium pay for holiday and rest day pay, SILP, thirteenth month pay, ECOLA, separation pay, and attorney’s fees.

Labor Arbiter Proceedings and Decision

Respondents did not appear throughout the proceedings before the Labor Arbiter. The Labor Arbiter conducted the case ex parte and directed petitioner to file her position paper. After submission, the case was submitted for decision based on the record. In its Decision dated 16 March 2004, the Labor Arbiter found petitioner to have been illegally dismissed. It ordered respondents TSL and Perez to pay: P7,280.00 for separation pay; P80,563.17 as backwages from May 7, 2003 to the date of the decision, with further computation until finality; P5,670.00 as salary differentials from September 28, 2002 to May 7, 2003; P5,670.60 for ECOLA; P29,534.38 for overtime pay; and P12,871.88 as ten percent of the total award as attorney’s fees, for a total monetary award of P141,590.63. Other claims were dismissed for lack of merit.

Appeal to the NLRC and NLRC Resolutions

On 21 June 2004, respondents appealed to the NLRC, essentially arguing that petitioner’s decision should be reversed because respondents were denied due process due to improper service of summons and that the monetary award lacked basis. The appeal was docketed as CA No. 040723-04. In its Resolution dated 30 November 2004, the NLRC sustained the Labor Arbiter’s finding of illegal dismissal. It held that the employer bears the burden of proving that dismissal was for cause and with due process, and found that respondents failed to discharge that burden. The NLRC rejected respondents’ due-process argument, noting that the alleged lack of due process had become moot because respondents were given an opportunity to explain and be heard through resolution of the substantive merits on appeal. The NLRC then recalculated the awards, affirming the salary differential, overtime pay, SILP, and thirteenth month pay because respondents did not substantially controvert the claims. It granted attorney’s fees based on salary differential, overtime pay, and ECOLA pursuant to Article 111 of the Labor Code. It affirmed the Labor Arbiter with modification only as to attorney’s fees.

Respondents moved for reconsideration of the 30 November 2004 resolution and then filed a supplemental motion reiterating the earlier grounds. In a Resolution dated 28 February 2006, the NLRC denied both motions.

Petition for Certiorari in the Court of Appeals

Respondents thereafter filed with the Court of Appeals a petition for certiorari under Rule 65 in CA-G.R. SP No. 94616. The Court of Appeals reversed the NLRC. It held that respondent Perez had been denied due process because summons were allegedly not properly served. The Court of Appeals emphasized that summons in labor cases before Labor Arbiters should be served personally or by registered mail, absent special circumstances. It found that although the bailiff had served summons “personally” upon respondent Perez, the service was invalid because Perez did not personally receive it. The Court of Appeals stated that the summons was received on 7 June 2003 by Alfredo Perez, whom it described as a co-employee of petitioner. Concluding that the Labor Arbiter did not acquire jurisdiction over Perez due to lack of proper service, the Court of Appeals declared the NLRC resolutions null and void.

Petition for Review before the Supreme Court and the Central Issue

Petitioner sought review with the Supreme Court, raising assignments of error that, in substance, challenged the Court of Appeals’ departure from accepted judicial procedures and its findings. The Supreme Court identified the fundamental issue as whether there had been improper service of summons upon respondent Perez such that the NLRC judgment against her was void. The Court ruled that the Court of Appeals erred.

Governing Rules on Service of Summons and Due Process in NLRC Proceedings

The Supreme Court examined the NLRC rules on summons and service of notices and resolutions. It cited Section 3 on issuance of summons and the requirement that summons and copies be served personally or by registered mail, with allowance for substituted service in special circumstances. It also cited provisions on proof and completeness of service, emphasizing that the return of service is prima facie proof.

The Court then compared those labor-specific rules with the pertinent provisions of the Rules of Court on summons. Under Rule 14, summons should be served in person whenever practicable, and substituted service may be allowed when justifiable causes prevent personal service within a reasonable time.

Applying these rules to the record, the Supreme Court recounted the manner by which summons and notices were served on respondents and the sequence of hearings before the Labor Arbiter. It noted that the summons dated 27 May 2003 was received by Alfredo Perez on 7 June 2003, with the bailiff’s return dated 10 June 2003. It further noted that notices of hearings were received through persons at TSL, including a cashier, a supervisor, and a delivery boy, based on corresponding bailiff’s returns. During these scheduled hearings, petitioner appeared and respondents failed to appear, and the Labor Arbiter eventually required position papers and warned that the case would proceed ex parte upon nonappearance. The Labor Arbiter’s records showed that respondents did not appear or file position papers at multiple hearings.

The Court recognized that the labor rules stated that summons should be made personally, but it questioned whether personal service was practicable in the circumstances. It relied on respondent Perez’s own admission that she was out of town during the entire proceedings before the Labor Arbiter. The Court reasoned that, given that admission, any attempt at personal service at a different time would still be futile. It characterized personal service under those conditions as impractical and absurd. Accordingly, although personal service was the general rule, substituted service and substantial compliance became justified under the circumstances.

Substantial Compliance and Quasi-Judicial Procedure

The Supreme Court held that service of summons at the respondent’s place of business—TSL—constituted substantial compliance. It invoked its prior pronouncements that technical procedural rules are not strictly applied in quasi-judicial proceedings and that substantial compliance is sufficient. It reiterated that the constitutional requirement of due process as to service of summons does not demand a rigid form; it requires only that service be reasonably expected to give the notice desired.

The Court also invoked the presumption of regularity in official acts, including the regularity of service of summons and notices in quasi-judicial proceedings. It held that the burden of proving irregularity rested on respondents. The Court noted that respondents denied receipt of summons and notices yet were able to receive the Labor Arbiter’s decision and to file a timely appeal with the NLRC. It further observed that respondents actually sought reconsideration of the adverse decision before the NLRC.

The Court emphasized that due process in administrative and quasi-judicial settings is satisfied when the party is afforded an opportunity to be heard, explain a side, or seek reconsideration. It stressed that what the law prohibits is absolute absence of the opportunity to be heard. Since respondents had opportunities to present their position through appeal and motion practice, the Court found their due-process theory unpersuasive.

Opportunity to Be Heard Through NLRC Review and Ex Parte Decision on Record

The Supreme Court further reasoned that even if the proceedings before the Labor Arbiter were affected by a procedural flaw, the NLRC process rectified any prejudice. It underscored that respondents had been able to argue their case on appeal before the NLRC, including their claim that they did not receive summons and notices and that petitioner was not illegally dismissed. It pointed to Article 223 of the Labor Code as authorizing appeal on enumerated grounds, including serious errors causing grave or irreparable injury.

The Court stressed that the NLRC, in exercise

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