Title
Philippine Long Distance Telephone Co. vs. Raut
Case
G.R. No. 174209
Decision Date
Aug 25, 2009
Workers filed illegal dismissal claims against PLDT, alleging labor-only contracting. Courts ruled them regular employees, ordering reinstatement, backwages, and benefits, upheld by SC.
illegal dismissal
reinstatement
backwages

Case Summary (G.R. No. 174209)

Parties, Claims, and Initial Labor Proceedings

Respondents Rizalina Raut and Leila Emnace filed a complaint on December 17, 1996 against PLDT for illegal dismissal and non-payment of salaries, overtime pay, night shift differential, thirteenth month pay, service incentive leave, backwages, and claims for moral damages and attorney’s fees. Gina Capistrano subsequently filed a similar complaint on January 18, 1997. Due to similarity of facts and issues, the Labor Arbiter consolidated the cases on February 25, 1997.

In the complaints, respondents asserted that they were illegally dismissed on November 30, 1996 and December 16, 1996, respectively. The Labor Arbiter, in a decision promulgated on July 30, 1997, ordered respondents’ reinstatement to their former positions as telephone operators, or if no longer feasible, to another equal position without loss of seniority rights and benefits. It likewise ordered the payment of backwages subject to recomputation up to the date of finality. Specifically, it awarded P32,505.00 each to Rizalina Raut and Leila Emnace, and P34,320.00 to Gina Capistrano, aggregating P99,330.00.

Appeal to the NLRC and the Amended Awards

After respondents were reinstated on December 16, 1998, PLDT continued to treat them, according to respondents, as temporary employees. PLDT appealed the Labor Arbiter’s decision, contending that respondents were never its employees and that they were employees of Peerless Integrated Services, Inc. PLDT invoked an arrangement to augment workforce through another entity, characterizing respondents’ relationship as that of an independent contractor rather than direct employment.

Respondents opposed the appeal by asserting that their functions were not different from those performed by regular employees. They also maintained that they were trained by PLDT to become Traffic Operator, described as a technical position. Respondents further argued that the ten-month contractual extension allegedly provided to them exposed PLDT’s scheme to subvert their tenurial security, characterizing the arrangement with Peerless as “labor only” contracting prohibited by Sec. 9(b), Rule VIII of the Omnibus Rules, in relation to Article 106 of the Labor Code of the Philippines.

On April 30, 1998, the NLRC issued a decision affirming with modification. In addition to the Labor Arbiter’s awards, the NLRC ordered PLDT to pay overtime pay, night shift differential pay, service incentive leave pay, and thirteenth month pay. PLDT’s motion for reconsideration was denied in a resolution promulgated on September 25, 1998.

PLDT then filed a petition for certiorari with the Court of Appeals, which, in a decision dated September 24, 1999, affirmed the NLRC, with a modification in the computation such that certain thirteenth month pay periods would be deducted from the awards.

Finality of Judgment and Execution Proceedings

PLDT filed a motion for reconsideration before the Court of Appeals, which was denied, making the appellate decision final and executory on March 26, 2000 as evidenced by an entry of judgment. On April 24, 2002, respondents filed a motion for issuance of a writ of execution, which the Labor Arbiter granted in an order dated June 21, 2002. The dispositive portion directed the issuance of a writ of execution for the following enforcement awards: P354,535.36 each for Rizalina Raut, Leila Emnace, and Gina Capistrano, or an aggregate of P1,063,606.00.

PLDT appealed the June 21, 2002 order to the NLRC. However, the NLRC dismissed PLDT’s Memorandum of Appeal for failure to attach the required Certificate of Non-Forum Shopping. PLDT then resorted to certiorari before the Court of Appeals, but the Court of Appeals denied the petition due course.

Grounds Raised Before the Supreme Court and the Controlling Issue

Before the Supreme Court, PLDT challenged the appellate and NLRC rulings, asserting, first, that the decisions affirming the NLRC dismissal were allegedly in accordance with law and applicable Supreme Court decisions, and second, that the Labor Arbiter’s order directing issuance of the writ of execution, which had been affirmed in toto by the NLRC and the Court of Appeals, was alleged to be null and void.

The Supreme Court treated the definitive issue as whether the Court of Appeals erred in affirming the NLRC’s dismissal of PLDT’s appeal for failure to attach a Certificate of Non-Forum Shopping. The Court found the petition bereft of merit.

The Parties’ Contentions on the Certificate Requirement

PLDT argued that the only jurisdictional requirements for appeal were: (one) perfection of the appeal within the ten (10) day reglementary period from receipt of the decision, award, or order, and (two) posting of a cash or surety bond as specified in Article 223 of the Labor Code, for appeals involving monetary awards. PLDT effectively minimized the certificate requirement as non-jurisdictional.

Respondents, in contrast, benefited from the strict procedural approach applied by the NLRC and sustained by the Court of Appeals. The Supreme Court noted that the NLRC procedural rules required the filing of a memorandum of appeal accompanied by a Certificate of Non-Forum Shopping, and that PLDT had filed a memorandum of appeal lacking that required attachment.

Legal Reasoning on Perfection of Appeal and Jurisdiction

The Supreme Court held that PLDT’s theory was incorrect. The Court explained that the perfection of an appeal does not consist solely of compliance with the two requisites PLDT cited. Perfection of an appeal necessarily includes the filing of a complete (not a defective) memorandum of appeal within the ten (10) day reglementary period. The Court then emphasized that the NLRC Rules of Procedure required the appeal to be accompanied by a Certificate of Non-Forum Shopping. Because PLDT filed a memorandum of appeal without the requisite certificate, that filing did not stop the running of the period to perfect an appeal.

Accordingly, the Court ruled that the Labor Arbiter’s order of execution became final and executory. The Court relied on Accessories Specialist, Inc. v. Alabanza (G.R. No. 168985, July 23, 2008) to reiterate that appeal is a statutory privilege, not a constitutional right, and that perfection of an appeal in the manner and within the period permitted by law is mandatory and jurisdictional. The Court stressed that the requirements for perfecting an appeal must, as a rule, be strictly followed because they serve as indispensable interdictions against needless delay, and failure to perfect prevents a party from defeating the finality of the judgment.

Finality and the Limited Scope of Execution

While PLDT sought to resist execution by attacking the validity of the order, the Supreme Court treated the argument as a further attempt to delay the enforcement of a final judgment. The Court observed that the judgment against PLDT became final and executory on March 26, 2000, yet respondents were allegedly prevented from enjoying the fruits of that final judgment because of PLDT’s “frivolous appeal” against the execution order.

PLDT contended that the Labor Arbiter’s order of execution was void because it supposedly increased the original award contained in the Labor Arbiter’s initial decision. PLDT also asserted that nothing in the Labor Arbiter’s dispositive portion required respondents to be reinstated as regular employees.

The Supreme Court rejected these contentions. It recognized that an order of execution must conform to the decision sought to be enforced. It nevertheless explained that any apparent increase in the computational figure resulted from the proper recomputation and execution mechanics rather than from a forbidden enlargement of the judgment.

Interpretation of the Underlying Labor Decisions and the Nature of Employment

The Court addressed PLDT’s submission regarding reinstatement and employment status by pointing to the decisions of the Labor Arbiter, the NLRC, and the Court of Appeals. The Supreme Court noted that the Labor Arbiter had declared that respondents “were never the employees of Peerless Integrated Services, Inc., as they were all the time employees of PLDT.” In light of the consistent factual and legal findings, the Supreme Court concluded that the lower tribunals had determined respondents to be regular employees of PLDT.

It grounded the employment characterization on Article 279 in relation to Article 280 of the Labor Code of the Philippines, which confer security of tenure for regular employment and define when employment is deemed regular notwithstanding written agreements to the contrary. The Court emphasized that, consistent with those provisions, the lower tribunals affirmed reinstatement and the related entitlement to salaries and benefits enjoyed by PLDT’s regular employees.

Computation of Monetary Awards in Execution

On the computation of monetary awards, the Supreme Court explained that the Labor Arbiter’s decision specified that, for purposes of posting a bond should PLDT appeal, backwages were computed only for a certain period. Otherwise, actual backwages were to be computed from the date of dismissal up to the date of finality of the decision. The Court also observ

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