G.R. No. 123938 - Labor Congress of the Philippines vs. National Labor Relations Commission

Case Summary (G.R. No. 123938)

Factual Background

Petitioners were ninety-nine rank-and-file employees of Empire Food Products employed on various dates to perform repacking and related tasks. On October 23, 1990 petitioners, through LCP President Benigno B. Navarro, Sr., and private respondents executed a Memorandum of Agreement recognizing LCP as the sole and exclusive bargaining agent for wages, hours, and other terms and conditions of employment and providing for payroll adjustments, SSS registration, check-off of union dues, agency fee deductions, and provisional withdrawal of an existing NLRC case pending negotiation of a collective bargaining agreement. Mediator-Arbiter Antonio Cortez approved the agreement on October 24, 1990 and certified LCP as bargaining agent. Petitioners submitted a collective bargaining proposal on November 9, 1990. On January 23, 1991 petitioners filed the complaint docketed NLRC RAB-III-01-1964-91 alleging unfair labor practice by illegal lockout and/or dismissal, union busting, violation of the October 23, 1990 memorandum, underpayment of wages in violation of R.A. No. 6640 and R.A. No. 6727, and claims for actual, moral and exemplary damages.

Proceedings Before the Labor Arbiter

The case proceeded to hearings with submission of position papers and testimonial and documentary evidence. Labor Arbiter Ariel C. Santos initially rendered a decision that, while absolving private respondents of the charged unfair labor practices and related claims, directed the reinstatement of the individual complainants except those who had resigned and executed quitclaims. The Labor Arbiter emphasized the employer’s failure to maintain payroll and other papers subject to inspection and visitation by the Department of Labor and Employment and imposed reinstatement with admonition against harassment, intimidation or coercion.

NLRC First Review and Remand

On appeal the National Labor Relations Commission vacated the Labor Arbiter’s dispositive disposition and remanded the case for further proceedings. The NLRC found that the Labor Arbiter overlooked testimonial evidence of several complainants and erred in concluding that complainants had not presented witnesses. It instructed the Labor Arbiter to summon other individual complainants, receive their testimonies, consider the conflicting positions of the parties, and render a decision with a proper dispositive portion that could be executed if warranted.

Labor Arbiter Clarificatory Decision Dismissing Complaint

On remand the Labor Arbiter issued a clarificatory decision dated July 27, 1994 dismissing the complaint for utter lack of merit. The Labor Arbiter reasoned that complainants failed to present with definiteness and clarity the acts constituting unfair labor practice and that a declaration of unfair labor practice requires more than a scintilla of evidence. The Labor Arbiter found that petitioners had abandoned their posts on January 21, 1991 based on the testimony of a security guard, which allegedly resulted in spoilage of product, and that the underpayment claims were unfounded because petitioners were pakiao or piece-rate workers whose compensation need only meet the minimum wage for an eight-hour day. The Labor Arbiter likewise dismissed claims for moral and exemplary damages for lack of proven malice or bad faith.

NLRC Affirmance and Denial of Reconsideration

The NLRC affirmed the Labor Arbiter’s July 27, 1994 decision in its resolution of March 29, 1995. The NLRC sustained findings that there was a dearth of evidence of unfair labor practice and union busting; that the October 23, 1990 memorandum could not be the basis of an enforceable obligation within the NLRC’s jurisdiction because certain provisions were resolutory; that underpayment claims lacked basis because petitioners were pakiao workers paid by output; and that petitioners were not underpaid. The NLRC denied petitioners’ motion for reconsideration on October 31, 1995.

Issues Raised in the Petition for Certiorari

Petitioners invoked Rule 65, Rules of Court and presented questions alleging grave abuse of discretion by the NLRC in disregarding evidence and applicable jurisprudence, depriving petitioners of constitutional rights to self-organization, security of tenure, protection to labor, just and humane conditions of work, and due process, and asserting that petitioners were illegally eased out or constructively dismissed and should be reinstated with back wages, statutory benefits, damages and attorney’s fees. The petition articulated four specific issues as presented to the Court.

Responses, Procedural Contentions and Government Participation

Respondents urged dismissal on timeliness grounds, asserting that petitioners received the NLRC resolution denying reconsideration on December 13, 1995 and failed to file within the 15-day period applicable to Rule 45. Petitioners replied that a non-lawyer representative mistook the applicable reglementary period and invoked the reasonable time criterion for certiorari under Rule 65. The Office of the Solicitor General filed a Manifestation siding with petitioners, contesting the abandonment finding and stressing the Labor Arbiter’s unexplained reversal from an earlier reinstatement order. The NLRC defended its factual findings and insisted that its determinations bind the Court absent exceptions.

Standard of Review and Court’s Initial Appraisal

The Supreme Court granted due course to the petition and required memoranda. The Court emphasized that the general rule deferring to the NLRC’s factual findings is not absolute when grave abuse of discretion is shown. The Court found insufficient explanation for the Labor Arbiter’s reversal from his earlier reinstatement order to the later dismissal, noting that substantially the same evidence was before the Labor Arbiter on both occasions. The Court observed that the Labor Arbiter failed to carry out the NLRC’s remand instructions and that his later conclusion of abandonment appeared to have been reached without adequate consideration of petitioners’ evidence.

Abandonment, Burden of Proof and Due Process

The Court reviewed authority establishing that abandonment is a clear, deliberate and unjustified refusal to resume employment and not mere absence. The Court considered persuasive the OSG’s observation that a one-day failure to report for work which did not prevent petitioners from filing an illegal dismissal complaint two days later could not reasonably be deemed abandonment. The Court reiterated that the burden to prove just cause for dismissal rests on the employer. The Court further held that private respondents violated petitioners’ right to security of tenure and due process by treating the employment as terminated by abandonment without serving written notice as required by Sec. 2, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code.

Employment Status of Piece-Rate Workers and Entitlement to Benefits

The Court analyzed the legal status of petitioners as piece-rate or pakiao workers and concluded that they were regular employees entitled to statutory benefits. The Court relied on three factors: the nature of petitioners’ tasks as necessary in the usual business of Empire Food Products; continuous year-round employment not tied to a specific project or season; and the length of service. The Court explained that the implementing rules expressly grant holiday pay to piece-rate workers (Sec

Case Syllabus (G.R. No. 123938)

Parties and Procedural Posture

Labor Congress of the Philippines (LCP) acted for and in behalf of ninety-nine rank-and-file petitioners who were formerly employees of Empire Food Products, Inc..
National Labor Relations Commission is the public respondent whose resolution of 29 March 1995 is assailed by the petition under Rule 65, Rules of Court.
Gonzalo Kehyeng and Evelyn Kehyeng were named as private respondents in their capacities as proprietor/president and manager of Empire Food Products, Inc..
Petitioners filed a special civil action for certiorari to annul the NLRC resolution that affirmed the Labor Arbiter's dismissal of their complaint.

Key Factual Allegations

Petitioners alleged that they were hired as repackers and paid on a piece-rate or pakiao basis and that they were members represented by LCP after a Memorandum of Agreement of October 23, 1990 recognized LCP as sole bargaining agent.
Petitioners alleged unfair labor practices including illegal lockout and/or dismissal, union busting, violation of the October 23, 1990 memorandum, underpayment of wages pursuant to R.A. No. 6640 and R.A. No. 6727, and prayed for actual, moral and exemplary damages.
Private respondents alleged that petitioners abandoned their posts on January 21, 1991, and relied principally on testimony of a security guard that cheese curls spoiled when petitioners allegedly refused to report for work.

Procedural History

The October 23, 1990 Memorandum of Agreement was approved by Mediator-Arbiter Antonio Cortez on October 24, 1990 certifying LCP as bargaining agent.
Petitioners filed their complaint before the Labor Arbiter on January 23, 1991, and the Labor Arbiter initially ordered reinstatement in a prior decision dated April 14, 1992, but later issued a Decision dated July 27, 1994 dismissing the complaint.
The NLRC in a resolution dated 21 July 1992 remanded the case for further proceedings and later, in a resolution of 29 March 1995, affirmed the Labor Arbiter's July 27, 1994 Decision dismissing the complaint.
Petitioners' motion for reconsideration was denied by the NLRC on October 31, 1995, after which petitioners filed the present Rule 65 petition in this Court.

Issues Presented

Whether the NLRC and the Labor Arbiter gravely abused their discretion in disregarding evidence, applicable jurisprudence, and prior decisions to the prejudice of petitioners’ due process rights.
Whether petitioners were deprived of constitutional and statutory rights including the right to self-organization, security of tenure, and protection to labor.
Whether petitioners were illegally dismissed or constructively dismissed from employment.
Whether petitioners are entitled to reinstatement with backwages, statutory benefits, damages and attorneys' fees or, alternatively, separation pay.

Contentions of the Parties

Petitioners contended that the Labor Arbiter's reversal from reinstatement to dismissal lacked explanation and that abandonment was not proved because petitioners filed their complaint shortly after the alleged abandonment.
Private respondents contended that the petition was filed out of time and defended the Labor Arbiter's and NLRC's factual findings, particularly the finding of abandonment supported by witnesses.
The Office of the Solicitor G