Title
Philtranco Service Enterprises, Inc. vs. Cual
Case
G.R. No. 207684
Decision Date
Jul 17, 2017
Philtranco employees retrenched in 2006-2007 filed illegal dismissal claims. First case dismissed due to procedural error; second case ruled retrenchment invalid, upheld by courts. Audited financials not a supervening event; corporate officers not liable.

Case Summary (G.R. No. 207684)

Background of the Dispute

The respondents were all members of the Philtranco Workers Union Association of Genuine Labor Organization (PWU-AGLO) and were included in Philtranco’s retrenchment program. This program was cited by Philtranco as a necessary measure due to business losses. The PWU-AGLO subsequently filed a Notice of Strike with the Department of Labor and Employment (DOLE), alleging unfair labor practices. Efforts to settle the disputes were unsuccessful, leading to formal complaints and hearings.

Findings of the DOLE and Initial Cases

On June 13, 2007, the Acting DOLE Secretary ruled that 17 union officers had been illegally terminated. Key directives included their reinstatement, the payment of back wages, and the preservation of existing collective bargaining agreement (CBA) terms. The respondents contended they were not reinstated and filed a labor complaint for illegal dismissal on October 16, 2007, which was initially dismissed due to procedural technicalities regarding the verification page of their earlier filed complaints.

Subsequent Developments in the NLRC

In a subsequent resolution, the Labor Arbiter determined that some employees had been illegally dismissed and ordered their reinstatement and payment of back wages. The National Labor Relations Commission (NLRC), upon Philtranco’s appeal, reversed this decision, giving weight to new financial statements submitted by the petitioner. This action positioned the second complaint as distinct from the first, leading to legal complexities.

Appeals to the Court of Appeals

The CA eventually reinstated the Labor Arbiter's earlier findings, concluding that the retrenchment program had been improperly justified as Philtranco failed to present substantive evidence of financial distress. The CA also maintained that the retroactive application of the law of the case principle was inappropriate in this instance.

Supreme Court’s Ruling

The core issue before the Supreme Court was whether the CA had correctly applied the law of the case doctrine in this context. The Court clarified that the doctrine does not extend to a new complaint and that the retrenchment's validity from the first NLRC case was binding due to the res judicata concept. This in

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