G.R. No. 207354 - Hubilla vs. HSY Marketing Ltd., Co.

Case Summary (G.R. No. 207354)

Factual Background

Petitioners were employees of respondents engaged in retail sales of the Novo Jeans brand. In May and June 2010 several petitioners aired grievances on a public radio program and were referred to the Department of Labor and Employment Camanava Regional Office. Petitioners alleged that on June 7, 2010 they were prevented from entering the Novo Jeans stores where they worked and that, although respondents sent a show cause letter the following day, they had in truth already been dismissed. Petitioners sent a demand letter dated July 19, 2010 but no settlement ensued and they filed complaints with the Labor Arbiter.

Trial Proceedings and Labor Arbiter Decision

The Labor Arbiter, Arden S. Anni, dismissed the consolidated complaints by Decision dated May 31, 2011. The Labor Arbiter found that petitioners presented only bare allegations of being dismissed between June 6 and 9, 2010 and that they did not offer other evidence showing termination or prevention from reporting for work. The Labor Arbiter concluded that petitioners voluntarily severed their employment, reasoning that their public airing of grievances on the radio was sufficient reason for them not to report for work due to possible disciplinary action.

NLRC Proceedings and Ruling

The National Labor Relations Commission reversed the Labor Arbiter on June 25, 2012 and found that petitioners were illegally dismissed. The NLRC concluded that the allegations of both parties were unsubstantiated and thus in equipoise, and it applied the principle that when doubt exists between the evidence of employer and employee the scales must be tilted in favor of the latter. The NLRC awarded backwages, separation pay, and attorney's fees, and its denial of respondents' motion for partial reconsideration was reflected in an August 24, 2012 Resolution.

Court of Appeals Proceedings and Ruling

Respondents filed a petition for certiorari with the Court of Appeals. On February 25, 2013 the Court of Appeals granted the petition, reversed the NLRC, and reinstated the Labor Arbiter Decision. The Court of Appeals found that respondents' counsel substantially complied with the verification requirement even though his knowledge was premised on facts relayed by clients and authentic records. The CA held that respondents presented the First Notice of Termination of Employment and that the Notices did not indicate actual dismissal or prevention from entry. The CA concluded that the equipoise rule did not apply because respondents were the only party to present proof, and it ruled that petitioners voluntarily terminated employment.

Issues Presented to the Supreme Court

The principal issue before the Supreme Court was whether petitioners were illegally dismissed. The Court also addressed two preliminary procedural issues: (1) whether the Court of Appeals may review and reassess factual findings of the NLRC in a petition for certiorari, and (2) whether a verification stating that allegations are "based upon facts relayed to me by my clients" by counsel satisfies the verification requirement.

Parties' Contentions Before the Supreme Court

Petitioners argued that the Court of Appeals erred by treating the petition for certiorari as a vehicle to re-evaluate NLRC's findings absent a showing of grave abuse of discretion. Petitioners maintained that respondents failed to substantially comply with verification requirements and that respondents deliberately withheld annexes to petitioners' position paper, rendering records inauthentic. They insisted that the evidence was in equipoise and that doubts must be resolved in favor of employees pursuant to labor policy. Respondents argued that defects in verification do not necessarily warrant dismissal, that counsel's attestation was sufficient, that only relevant annexes must be attached, and that the CA correctly reviewed the NLRC for grave abuse and could reassess factual findings. Respondents also contended that petitioners had admitted receipt of the Notices before the Labor Arbiter and were estopped to deny such receipt later.

Legal Standards on Review of Factual Findings

The Court reiterated that factual findings of quasi-judicial labor bodies command respect and finality when supported by substantial evidence, defined as the amount of relevant evidence a reasonable mind might accept as adequate to support a conclusion. The Court explained that the Court of Appeals' review in certiorari is limited to whether the NLRC committed grave abuse of discretion, but that the NLRC's findings are examinable if they were arrived at arbitrarily or without substantial evidence. Contradictory findings between the Labor Arbiter, NLRC, and the Court of Appeals provide a prima facie basis to re-examine the records, and the CA may re-assess facts to determine which tribunal's findings are supported by evidence. The Supreme Court retains discretion to review factual findings it deems necessary.

Verification and Certification Requirements

The Court analyzed Rule 7, Section 4 on verification and stated that a pleading is verified by affidavit that the affiant has read the pleading and that its allegations are true of his or her personal knowledge or based on authentic records. Verification is a formal but not jurisdictional requirement and may be corrected in appropriate circumstances. The Court emphasized that verification is substantially complied with when the affiant has "ample knowledge" to swear to the truth of allegations. The Court held that counsel's attestation that allegations are "based upon facts relayed to me by my clients" is insufficient because counsel lacked personal knowledge of the antecedents and thus could not validly verify the pleading. Corporations and partnerships may authorize counsel to sign the certification against forum shopping by Secretary's Certificates or similar instruments; but sole proprietors have no separate legal personality and may not delegate the signing of the certification without a Special Power of Attorney. Several respondents had valid authorizations, while three sole proprietorship respondents did not, rendering their certifications against forum shopping invalid. Because respondents' petition was unmeritorious, the Court concluded that the defective verification and certifications should have merited outright dismissal, although defective verification alone can sometimes be corrected.

Application of the Equipoise Rule and Burden of Proof

The Court recited the applicable burden of proof in illegal dismissal cases: the employer bears the burden to prove that dismissal was for a valid cause and that due process was observed. Where both parties fail to present substantial evidence and the proofs are in equipoise the doubt must be resolved in favor of labor. The Court found no proof that each petitioner received the First Notice of Termination of Employment. Respondents had offered "Sample Letters of Respondents" rather than actual, acknowledged Notices, and petitioners never admitted receipt. The Court observed that the absence of proof of receipt suggested the Notices were an afterthought and that respondents did not prove abandonment because abandonment requires both unjustified absence and a clear intention to sever the employment manifested by an overt act; respondents failed to show such concurrence. Accordingly, the evidence was in equipoise

Case Syllabus (G.R. No. 207354)

Parties and Posture

Petitioners are a group of employees who worked under the Novo Jeans retail/ manufacturing network and who allege illegal dismissal.
Respondents are HSY Marketing Ltd., Co., Wantofree Oriental Trading, Inc., Coen Fashion House and General Merchandise, Asia Consumer Value Trading, Inc., Fabulous Jeans & Shirt & General Merchandise, LSG Manufacturing Corporation, Unite General Merchandise, Rosario Q. Co, Lucia Pun Ling Yeung, and Alexander Arqueza, all alleged employers of the petitioners.
The petition assails the Court of Appeals Decision dated February 25, 2013 and Resolution dated May 30, 2013 in CA-GR. SP No. 126522 which reinstated the Labor Arbiter decision that dismissed the complaints.
The case reached the Supreme Court by a Petition for Review on Certiorari seeking reversal of the Court of Appeals' rulings and vindication of the employees' claims.

Facts

Several petitioners aired grievances against their employers on a radio program hosted by Raffy Tulfo in May and June 2010.
Petitioners allege that on June 7, 2010 they were prevented from entering their Novo Jeans workplaces and that a purported show-cause letter was sent the next day as a pretext for dismissal.
Petitioners sent a demand letter on July 19, 2010 to attempt amicable settlement before the Department of Labor and Employment Camanava Regional Office but were unsuccessful.
Respondents asserted that the petitioners voluntarily severed their employment and that the petitioners later filed complaints despite an alleged withdrawal at the DOLE.

Procedural History

The Labor Arbiter rendered a Decision on May 31, 2011 dismissing the consolidated complaints for lack of merit and for forum-shopping.
The National Labor Relations Commission (NLRC) reversed the Labor Arbiter on June 25, 2012 and found illegal dismissal, awarding monetary relief totaling Php30,969,426.00.
The NLRC denied partial reconsideration on August 24, 2012.
Respondents sought certiorari relief before the Court of Appeals, which on February 25, 2013 reversed the NLRC and reinstated the Labor Arbiter.
Petitioners' motion for reconsideration to the Court of Appeals was denied on May 30, 2013, prompting this petition to the Supreme Court.

Issues

Whether the Court of Appeals may review and reassess the factual findings of the NLRC in a petition for certiorari.
Whether a verification stating that allegations are "based upon facts relayed to me by my clients and upon authentic records" satisfies Rule 7, Section 4, Rules of Court.
Whether petitioners were illegally dismissed by respondents.

Parties' Contentions

Petitioners contend that the Court of Appeals improperly used certiorari to re-evaluate NLRC factual findings absent grave abuse, and that respondents’ verification was defective and their annexes were improperly withheld.
Respondents maintain that counsel's verification substantially complied with the Rules; that documents need only be relevant and pertinent; and that petitioners admitted receipt of the Notices before the Labor Arbiter thereby precluding later denial.

Procedural Rulings

The Court held that factual findings of quasi-judicial labor bodies are entitled to respect when supported by substantial evidence, but they are reviewable when reached arbitrarily or without substantial evidence.
The Court explained that the Court of Appeals may re-examine NLRC factual findings when there are contradictory findings or a showing of grave a