G.R. No. 188514 - Castells vs. Saudi Arabian Airlines

Case Summary (G.R. No. 188514)

Factual Background

On August 24, 2004, SAUDIA issued a memorandum regarding the transfer of ten (10) flight attendants, including Castells and Centi-Mandanas, from Manila to Jeddah, Saudi Arabia, citing operational requirements (transfer order). Centi-Mandanas complied with the transfer order, while Castells did not.

Centi-Mandanas alleged that upon arrival in Jeddah she was informed that her contract would no longer be renewed and that she was asked to sign a pre-typed resignation letter. She claimed that she did not wish to resign, but SAUDIA left her with no viable alternative because it would terminate her services in any event; she therefore filled out the resignation form given to her despite her position that the resignation was compelled.

Castells, for her part, alleged that after her non-compliance with the transfer order she prepared a resignation letter stating that she felt forced to resign. She further alleged that a SAUDIA Manila Office Manager instructed her to amend the letter to state that she was voluntarily resigning, which she reluctantly complied with.

Complaint for Illegal Dismissal and the Defense

Based on these circumstances, petitioners, together with a co-flight attendant, Maria Joy Teresa O. Bilbao (Bilbao), filed a complaint for illegal dismissal against SAUDIA, seeking reinstatement, full backwages, moral and exemplary damages, and attorneys fees. They claimed they had been hearing that Jeddah-based flight attendants aged thirty-nine (39) to forty (40) years, of the same age bracket as petitioners, were already processing resignations, and that the transfer order was designed to bring them to Jeddah so that they would be terminated upon arrival.

SAUDIA defended on the premise that the resignations were intelligently and voluntarily made. It asserted, among others, that petitioners’ and Bilbao’s resignation letters were penned and duly signed by them. SAUDIA also relied on an undertaking executed by petitioners and Bilbao, in which they acknowledged receipt of various sums of money and irrevocably and unconditionally released SAUDIA, its directors, stockholders, officers, and employees from any claim or demand in law or equity connected with their employment.

Labor Arbiter Proceedings

In a Decision dated August 31, 2006, the Labor Arbiter found SAUDIA guilty of illegal dismissal. It ordered SAUDIA to pay each of petitioners and Bilbao full backwages from the time of illegal dismissal until finality of the decision, plus separation pay equivalent to one month salary for every year of service, less amounts already received, and attorneys fees.

The Labor Arbiter held that petitioners and Bilbao did not voluntarily resign. It concluded that SAUDIA forced them to resign because of their old age, as shown by the scheme of transferring them to Jeddah and by coercing them to resign under the pain of actual termination. It also treated the subject undertaking as akin to a quitclaim and held that it did not bar the filing of the illegal dismissal case. It nevertheless noted that acceptance of benefits under the undertaking would result in the corresponding deduction from monetary awards.

NLRC Proceedings

SAUDIA appealed to the National Labor Relations Commission (NLRC). In a Resolution dated June 25, 2007, the NLRC reversed and set aside the Labor Arbiter’s ruling and dismissed the illegal dismissal complaint.

Contrary to the Labor Arbiter, the NLRC found that the presence of words of gratitude in the resignation letters negated any claim that they were produced by coercion or threat on SAUDIA’s part. The NLRC further held that the subject undertaking executed by petitioners and Bilbao was valid. It reasoned that petitioners and Bilbao were well-educated and therefore could not easily be tricked or inveigled into signing the undertaking. It also observed that petitioners and Bilbao received sufficient consideration upon execution.

After petitioners’ motions for reconsideration were denied in a Resolution dated October 26, 2007, they separately elevated the matter to the Court of Appeals.

CA Proceedings and the Time-Bar Issue

On January 16, 2008, petitioners filed with the CA a Motion for Extension to File a Petition for Certiorari, praying for fifteen (15) days from January 18, 2008 (until February 2, 2008) to file their petition. The CA granted the motion in a Resolution dated January 29, 2008. Because February 2, 2008 was a Saturday, petitioners filed the subject petition on the next working day, February 4, 2008, and the CA admitted it.

On the same date, SAUDIA filed a Motion for Reconsideration, arguing that A.M. No. 07-7-12-SC, which took effect on December 27, 2007, no longer allowed extensions of time to file a petition for certiorari; hence, the CA should not have admitted the petition. In a Resolution dated August 28, 2008, the CA reconsidered and granted SAUDIA’s motion. It held that the petition was not admitted due to petitioners’ non-compliance with the reglementary period prescribed by Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC. The CA thus considered the case closed and terminated.

Petitioners moved for reconsideration on September 26, 2008, but the CA denied it in a Resolution dated June 16, 2009, prompting the filing of the present petition for review on certiorari.

The Parties’ Contentions Before the Supreme Court

Petitioners contended that despite the wording of A.M. No. 07-7-12-SC, it did not explicitly remove the CA’s discretion to grant extensions to file petitions for certiorari, particularly when compelling reasons exist.

SAUDIA maintained that under A.M. No. 07-7-12-SC, motions for extension to file petitions for certiorari were no longer allowed. It argued that the CA therefore correctly refused admission of the subject petition and properly treated the matter as closed and terminated.

Legal Basis and Reasoning of the Supreme Court

The Supreme Court granted the petition. It emphasized that procedural rules must be respected because they exist to facilitate adjudication and address the problem of delay. It also recognized, however, established exceptions to strict compliance, but only for the most compelling reasons where rigid adherence would defeat rather than serve the ends of justice.

The Court cited the enumerated exceptions in Labao v. Flores, which include circumstances such as most persuasive and weighty reasons; prevention of injustice not commensurate with procedural lapse; good faith; existence of special or compelling circumstances; consideration of the merits; lack of showing that review is merely frivolous and dilatory; absence of unjust prejudice to the adverse party; and other equitable circumstances attendant to each case, including the importance of the issues involved and the exercise of sound judicial discretion.

Applying these principles, the Court held that although Section 4, Rule 65 as amended by A.M. No. 07-7-12-SC disallows extension of the sixty (60)-day reglementary period to file a petition for certiorari, courts may nevertheless extend the period subject to sound discretion under exceptional circumstances. The Court relied on the instruction in Republic v. St. Vincent de Paul Colleges, Inc., stating that while the general rule requires filing within sixty (60) days, the period may be extended under exceptional circumstances and subject to the court’s sound discretion.

The Court found

Case Syllabus (G.R. No. 188514)

Petitioners Maria Lourdes D. Castells and Shalimar Centi-Mandanas sought review on certiorari from the Court of Appeals (CA) resolutions that dismissed their petition for certiorari for being filed out of time.
Respondent was Saudi Arabian Airlines (SAUDIA).
The Court addressed whether the CA correctly refused admission of the subject petition for certiorari.

Parties and Procedural Posture

Petitioners challenged CA-G.R. SP No. 101971, which involved their petition for certiorari assailing adverse labor rulings.
The CA first dismissed the subject petition for lateness in a resolution dated August 28, 2008 and later denied petitioners’ motion for reconsideration in a resolution dated June 16, 2009.
Petitioners instituted the present petition for review on certiorari after the CA denied their motion for reconsideration.
The Supreme Court granted the petition, reversed the CA resolutions, and remanded the case to the CA for resolution on the merits.

Underlying Labor Controversy

SAUDIA issued a memo dated August 24, 2004 transferring ten flight attendants, including petitioners, from Manila to Jeddah, Saudi Arabia (Jeddah), due to operational requirements.
Centi-Mandanas complied with the transfer order, while Castells did not.
Centi-Mandanas alleged that upon arrival in Jeddah, she was told that her contract would no longer be renewed and that she was asked to sign a pre-typed resignation letter.
Centi-Mandanas claimed she never wished to resign and that SAUDIA left her with no viable choice other than to sign a resignation letter under the threat of termination of services.
Castells alleged that after her non-compliance with the transfer order, she prepared a resignation letter stating she felt she was being forced to resign.
Castells further alleged that the SAUDIA Manila Office Manager instructed her to amend the letter to state that she was voluntarily resigning.
Petitioners, together with a co-flight attendant, Maria Joy Teresa O. Bilbao (Bilbao), filed a complaint for illegal dismissal against SAUDIA, praying for reinstatement, full backwages, moral and exemplary damages, and attorneys fees.
Petitioners alleged that flight attendants aged thirty-nine to forty years old (the same age range as them) in Jeddah had already been processing resignations, and that the transfer order was allegedly meant to terminate them upon arrival.

SAUDIA’s Defense Theory

SAUDIA maintained that the resignations were made intelligently and voluntarily.
SAUDIA asserted that petitioners and Bilbao signed resignation letters and executed an undertaking acknowledging receipt of certain sums and irrevocably and unconditionally releasing SAUDIA and its corporate officers, directors, and employees from any claim connected with employment.
SAUDIA relied on the resignation letters and the undertaking to deny liability for illegal dismissal.

Labor Arbiter’s Findings

In a Decision dated August 31, 2006, the Labor Arbiter (LA) found SAUDIA guilty of illegal dismissal.
The LA ordered SAUDIA to pay each petitioner and Bilbao full backwages from the time of illegal dismissal until finality of the decision.
The LA awarded separation pay of one month salary for every year of service, less amounts already received.
The LA also awarded attorneys fees.
The LA held that petitioners and Bilbao did not voluntarily resign and that SAUDIA forced their resignation due to their old age.
The LA relied on an alleged scheme of transferring petitioners to Jeddah and on the alleged coercion to resign under pain of actual termination.
The LA ruled that the subject undertaking, considered akin to a quitclaim, did not bar petitioners and Bilbao from filing a case.
The LA noted, however, that acceptance of benefits under the undertaking would only result in deduction of monetary awards due.

NLRC Reversal

SAUDIA appealed to the National Labor Relations Commission (NLRC).
In a Resolution dated June 25,