FIRST DIVISION
MELENCIO GABRIEL, G.R. No. 146989
represented by surviving spouse,
FLORDELIZA V. GABRIEL,
Petitioner, Present:
PUNO,
C.J., Chairperson,
-
versus - SANDOVAL-GUTIERREZ,
AZCUNA,
and
GARCIA,
JJ.
NELSON BILON, ANGEL
AND ERNESTO PAGAYGAY,
Respondents. Promulgated:
x
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x
DECISION
AZCUNA,
J.:
This is a petition for review on
certiorari[1]
assailing the Decision and Resolution of the Court of Appeals, respectively dated
The challenged decision reversed and
set aside the decision[2] of
the National Labor Relations Commission (NLRC) dismissing respondents’
complaint for illegal dismissal and illegal deductions, and reinstating the
decision of the Labor Arbiter finding petitioner guilty of illegal dismissal
but not of illegal deductions subject to the modification that respondents be
immediately reinstated to their former positions without loss of seniority
rights and privileges instead of being paid separation pay.
Petitioner, represented by his
surviving spouse, Flordeliza V. Gabriel, was the owner-operator
of a public transport business, “Gabriel Jeepney,”
with a fleet of 54 jeepneys plying the Baclaran-Divisoria-Tondo route. Petitioner had a pool of
drivers, which included respondents, operating under a “boundary system” of P400
per day.
The facts[3]
are as follows:
On
On
Respondents
alleged the following:
1) That they were regular drivers of
Gabriel Jeepney, driving their respective units bearing
Plate Nos. PHW 553, NXU 155, and NWW 557, under a boundary system of P400
per day, plying Baclaran to Divisoria
via Tondo, and vice versa, since December 1990,
November 1984 and November 1991, respectively, up to
days
a week, with average daily earnings of P400;
2) That they were required/forced to pay
additional P55.00 per day for the following: a) P20.00 police
protection; b) P20.00 washing; c) P10.00 deposit; and [d)] P5.00
garage fees;
3) That there is no law providing the
operator to require the drivers to pay police protection, deposit, washing, and
garage fees.
4) That on April 30, 1995, petitioner told
them not to drive anymore, and when they went to the garage to report for work
the next day, they were not given a unit to drive; and
5) That the boundary drivers of passenger jeepneys are considered regular employees of the jeepney operators. Being such, they are entitled to security of tenure. Petitioner, however, dismissed them without factual and legal basis, and without due process.
On his part, petitioner contended
that:
1) He does not remember if the respondents
were ever under his employ as drivers of his passenger jeepneys. Certain, however, is the fact that neither
the respondents nor other drivers who worked for him were ever dismissed by
him. As a matter of fact, some of his
former drivers just stopped reporting for work, either because they found some
other employment or drove for other operators, and like the respondents, the
next time he heard from them was when they started fabricating unfounded
complaints against him;
2) He made sure that none of the jeepneys would stay idle even for a day so he could collect
his earnings; hence, it had been his practice to establish a pool of drivers. Had respondents manifested their desire to
drive his units, it would have been immaterial whether they were his former
drivers or not. As long as they obtained the necessary licenses and references,
they would have been accommodated and placed on schedule;
3) While he was penalized or made to pay a
certain amount in connection with similar complaints by other drivers in a
previous case before this, it was not because his culpability was established,
but due to technicalities involving oversight and negligence on his part by not
participating in any stage of the investigation thereof; and
4)
Respondents’ claim that certain amounts, as enumerated
in the complaint, were deducted from their day’s earnings is preposterous. Indeed, there were times when deductions were
made from the day’s earnings of some drivers, but such were installment
payments for the amount previously advanced to them. Most drivers, when they got involved in
accidents or violations of traffic regulations, managed to settle them, and in
the process they had to spend some money, but most of the time they did not
have the needed amount so they secured cash advances
from him, with the understanding that the same should be paid back by
installments through deductions from their daily earnings or boundary.
On the other hand, Bacoor Transport Service Cooperative, Inc. (BTSCI) declared
that it should not be made a party to the case because: 1) [I]t has nothing to
do with the employment of its member-drivers.
The matter is between the member-operator and their respective
member-drivers. The member-drivers’ tenure of employment, compensation, work
conditions, and other aspects of employment are matters of arrangement between
them and the member-operators concerned, and the BTSCI has nothing to do with
it, as can be inferred from the Management Agreement between BTSCI and the
member-operators; and 2) [T]he amount allegedly deducted from respondents and
the purpose for which they were applied were matters that the cooperative was
not aware of, and much less imposed on them.
On
On
On
On
WHEREFORE, premises considered,
judgment is hereby rendered declaring the illegality of [respondents’]
dismissal and ordering [petitioner] Melencio Gabriel
to pay the [respondents] the total amount of ONE MILLION THIRTY FOUR THOUSAND
PESOS [P1,034,000,] representing [respondents’] backwages
and separation pay as follows:
1. Nelson
Bilon
Backwages P 284,800
Separation Pay 26,400 P 321,200
2. Angel
Brazil
Backwages P 294,800
Separation Pay 96,800 391,600
3. Ernesto
Pagaygay
Backwages P 294,800
Separation Pay 26,400 321,200
P 1,034,000
[Petitioner] Melencio
Gabriel is likewise ordered to pay attorney’s fees equivalent to five percent
(5%) of the judgment award or the amount of P51,700
within ten (10) days from receipt of this Decision.
All other issues are dismissed for
lack of merit.
SO ORDERED.[6]
Incidentally,
on
The labor arbiter’s decision was
subsequently served by registered mail at petitioner’s residence and the same
was received on
On
On
1. In holding that [petitioner] Gabriel
dismissed the complainants, Arb. Nora committed a
serious error in the findings of fact which, if not corrected, would cause
grave or irreparable damage or injury to [petitioner] Gabriel;
2. In holding that ‘strained relations’
already exist between the parties, justifying an award of separation pay in
lieu of reinstatement, Arb. Nora not only committed a
serious error in the findings of fact, but he also abused his discretion;
3. In computing the amount of backwages allegedly due [respondents] from
4. In using ‘P400.00’ and ‘22 days’
as factors in computing the amount of backwages
allegedly due [respondents], Arb. Nora abused his
discretion and committed a serious error in the findings of fact, considering
that there was no factual or evidentiary basis therefor;
5. In using ‘33.5 months’ as factor in the
computation of the amount of backwages allegedly due
[respondents], Arb. Nora committed a serious error in
the findings of fact[,] because even if it is assumed that backwages
are due from 30 April 1995 to 15 March 1997, the period between the two dates
is only 22½ months, and not 33½ months as stated in the appealed decision; and
6.
In not dismissing the case[,]
despite notice of the death of [petitioner] Gabriel before final judgment, Arb. Nora abused his discretion and committed a serious
error of law.[8]
On
Subsequently,
on
WHEREFORE,
premises considered, the appealed decision is hereby reversed and set aside.
The above-entitled case is hereby dismissed for lack of employer-employee
relationship.
SO ORDERED.[9]
Respondents
filed a motion for reconsideration. They claimed that the decision did not
discuss the issue of the timeliness of the appeal. The lack of
employer-employee relationship was mentioned in the dispositive
portion, which issue was not raised before the labor arbiter or discussed in
the body of the questioned decision. In view of the issues raised by respondents
in their motion, the NLRC rendered its second decision on
… In the case at bar, [petitioner] Melencio Gabriel was not represented by counsel during the pendency of the case. A decision was rendered by the Labor
Arbiter a quo on
The preceding considered, the decision of the labor arbiter has not become final
because there was no proper service of copy thereof to [petitioner] ….
Undoubtedly, this case is for recovery
of money which does not survive, and considering that the decision has not
become final, the case should have been dismissed and the appeal no longer
entertained….
WHEREFORE,
in view of the foregoing, the Decision of
SO ORDERED.[10]
Aggrieved
by the decision of the NLRC, respondents elevated the case to the Court of
Appeals (CA) by way of a petition for certiorari. On
…
Article
223 of the Labor Code categorically mandates that “an appeal by the employer
may be perfected only upon the posting of a cash bond or surety
bond x x x.” It is beyond
peradventure then that the non-compliance with the above conditio
sine qua non, plus the fact that the appeal was filed beyond the reglementary period, should have been enough reasons to
dismiss the appeal.
In any event, even conceding ex gratia that such procedural infirmity [were]
inexistent, this petition would still be tenable based on substantive aspects.
The public respondent’s decision,
dated
The NLRC ostensibly tried to redeem
itself by vacating the decision
In the instant case, the decision
(dated
Thus, we disagree with the
ratiocination of the NLRC that the death of the private respondent on
SECTION 3. Execution in Case of Death
of Party. – Where a party dies after the finality of the
decision/entry of judgment of order, execution thereon may issue or one already
issued may be enforced in the following cases:
a) x x x ;
b)
In case of death of the losing party, against his
successor-in-interest, executor or administrator;
c)
In case of death of the losing party after execution is
actually levied upon any of his property, the same may be sold for the
satisfaction thereof, and the sheriff making the sale shall account to his
successor-in-interest, executor or administrator for any surplus in his hands.
Notwithstanding
the foregoing disquisition though, We are not entirely
in accord with the labor arbiter’s decision awarding separation pay in favor of
the petitioners. In this regard, it [is] worth mentioning that in Kiamco v. NLRC,[11]
citing Globe-Mackay Cable and Radio Corp. v. NLRC,[12]
the Supreme Court qualified the application of the “strained relations”
principle when it held --
“If
in the wisdom of the Court, there may be a ground or grounds for the
non-application of the above-cited provision (Art. 279, Labor Code) this should
be by way of exception, such as when the reinstatement may be inadmissible due
to ensuing strained relations between the employer and employee.
In
such cases, it should be proved that the employee concerned occupies a position
where he enjoys the trust and confidence of his employer, and that it is likely
that if reinstated, an atmosphere of antipathy and antagonism may be generated
as to adversely affect the efficiency and productivity of the employee
concerned x x
x Obviously, the
principle of ‘strained relations’ cannot be applied indiscriminately.
Otherwise, reinstatement can never be possible simply because some hostility is
invariably engendered between the parties as a result of litigation. That is
human nature.
Besides,
no strained relations should arise from a valid legal act of asserting one’s
right; otherwise[,] an employee who shall assert his right could be easily
separated from the service by merely paying his separation pay on the pretext
that his relationship with his employer had already become strained.”
Anent the award of backwages, the Labor Arbiter erred in computing the same
from the date the petitioners were illegally dismissed (i.e. April 30, 1995) up
to March 15, 1997, that is two (2) days prior to the rendition of his decision
(i.e. March 17, 1997).
…
WHEREFORE, premises considered, the
petition is GRANTED, hereby REVERSING and SETTING ASIDE the assailed decisions
of the National Labor Relations Commission, dated
SO ORDERED.[13]
Petitioner filed a motion for reconsideration but the same
was denied by the CA in a resolution dated
Hence, this petition raising the
following issues:[14]
I
THE COURT OF APPEALS ERRED IN
FINDING THAT PETITIONER’S APPEAL TO THE NATIONAL LABOR RELATIONS COMMISSION WAS
FILED OUT OF TIME.
II
THE COURT OF APPEALS ERRED IN
HOLDING THAT THE ALLEGED DEFECTS IN PETITIONER’S APPEAL BOND WERE
OF SUCH GRAVITY AS TO PREVENT THE APPEAL FROM BEING PERFECTED.
III
THE COURT OF APPEALS ERRED IN
GRANTING RESPONDENTS’ PETITION FOR CERTIORARI DESPITE THE FACT THAT THE SAME
ASSAILED A DECISION WHICH HAD BEEN VACATED IN FAVOR OF A NEW ONE WHICH, IN
TURN, HAS SOLID LEGAL BASIS.
IV
THE COURT OF APPEALS ERRED IN
APPLYING SECTION 3, RULE III, OF THE MANUAL ON EXECUTION OF JUDGMENT OF THE
NATIONAL LABOR RELATIONS COMMISSION WHICH, BY ITS OWN EXPRESS TERMS, IS NOT
APPLICABLE.
A resolution of the case requires a brief
discussion of two issues which touch upon the procedural and substantial aspects
of the case thus: a) whether petitioner’s
appeal was filed out of time; and b) whether the claim survives.
As regards the first issue, the Court
considers the service of copy of the decision of the labor arbiter to have been
validly made on
Section 4, Rule III of the New Rules of Procedure of
the NLRC provides:
SEC. 4. Service of Notices and Resolutions.
– (a) Notices or summons and copies of orders, resolutions or decisions shall
be served on the parties to the case personally by the bailiff or authorized
public officer within three (3) days from receipt thereof or by registered
mail; Provided, That where a party is represented by counsel or authorized
representative, service shall be made on such counsel or authorized
representative; Provided further, That in cases of decision and final awards,
copies thereof shall be served on both parties and their counsel ….
For
the purpose of computing the period of appeal, the same shall be counted from
receipt of such decisions, awards or orders by the counsel of record.
(b) The bailiff or officer personally
serving the notice, order, resolution or decision shall submit his return
within two (2) days from date of service thereof, stating legibly in his
return, his name, the names of the persons served and the date of receipt which
return shall be immediately attached and shall form part of the records of the case.
If no service was effected, the serving officer shall
state the reason therefore in the return.
Section 6, Rule 13 of the Rules of Court which is suppletory to the NLRC Rules of Procedure states that: “[s]ervice of the papers may be made by delivering personally a
copy to the party or his counsel, or by leaving it in his office with his clerk
or with a person having charge thereof. If no person is found in his office, or
his office is not known, or he has no office, then by leaving the copy, between
the hours of eight in the morning and six in the evening, at the party’s or
counsel’s residence, if known, with a person of sufficient age and discretion
then residing therein.”
The
foregoing provisions contemplate a situation wherein the party to the action is
alive upon the delivery of a copy of the tribunal’s decision. In the present
case, however, petitioner died before a copy of the labor arbiter’s decision
was served upon him. Hence, the above
provisions do not apply. As aptly stated by the NLRC:
… In the case at bar, respondent Melencio Gabriel was not represented by counsel during the pendency of the case. A decision was rendered by the Labor
Arbiter a quo on
The
preceding considered, the decision of the Labor
Arbiter has not become final because there was no proper service of copy
thereof to party respondent….[15]
Thus, the appeal filed on behalf of petitioner on
On the question whether petitioner’s
surety bond was defective, Section 6, Rule VI of the New Rules of Procedure of
the NLRC provides:
SEC. 6. Bond. – In case the decision of a
Labor Arbiter … involves monetary award, an appeal by the employer shall be
perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission or the Supreme Court in an
amount equivalent to the monetary award, exclusive of moral and exemplary
damages and attorney’s fees.
The
employer as well as counsel shall submit a joint declaration under oath
attesting that the surety bond posted is genuine and that it shall be in effect
until final disposition of the case.
The
Commission may, in meritorious cases and upon Motion of the Appellant, reduce
the amount of the bond. (As amended on Nov. 5, 1993).
The Court believes that petitioner was able to comply
substantially with the requirements of the above Rule. As correctly pointed out
by the NLRC:
While we agree with complainants-appellees that the posting of the surety bond is
jurisdictional, We do not believe that the “defects”
imputed to the surety bond posted for and in behalf of respondent-appellant Gabriel
are of such character as to affect the jurisdiction of this Commission to
entertain the instant appeal.
It matters not that, by the terms of
the bond posted, the “Liability of the surety herein shall expire on
Anent complainants-appellees contention that the surety bond posted is
defective for being in the name of BTSCI which did not appeal and for having
been entered into by Mrs. Gabriel without BTSCI’s
authority, the same has been rendered moot and academic by the certification
issued by Gil CJ. San Juan, Vice-President of the bonding company to the effect
that “Eastern Assurance and Surety Corporation Bond No. 2749 was posted for and
on behalf appellant Melencio Gabriel and/or his
heirs” and that “(T)he name “Bacoor Transport Service
Cooperative, Inc.” was indicated in said bond due merely in (sic) advertence.”
At any rate, the Supreme Court has
time and again ruled that while Article 223 of the Labor Code, as amended
requiring a cash or surety bond in the amount equivalent to the monetary award
in the judgment appealed from for the appeal to be perfected, may be considered
a jurisdictional requirement, nevertheless, adhering to the principle that
substantial justice is better served by allowing the appeal on the merits
threshed out by this Honorable Commission, the foregoing requirement of the law
should be given a liberal interpretation (Pantranco
North Express, Inc. v. Sison, 149 SCRA 238; C.W. Tan
Mfg. v. NLRC, 170 SCRA 240; YBL v. NLRC, 190 SCRA 160; Rada
v. NLRC, 205 SCRA 69; Star Angel Handicraft v. NLRC, 236 SCRA 580).[16]
On
the other hand, with regard to the substantive aspect of the case, the Court
agrees with the CA that an employer-employee relationship existed between
petitioner and respondents. In Martinez v. National Labor Relations
Commission,[17] citing National
Labor Union v. Dinglasan,[18]
the Court ruled that:
[T]he relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee because in the lease of chattels the lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the former exercises supervision and control over the latter. The fact that the drivers do not receive fixed wages but get only that in excess of the so-called “boundary” [that] they pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and employee. Thus, private respondents were employees … because they had been engaged to perform activities which were usually necessary or desirable in the usual business or trade of the employer.[19]
The same principle was reiterated in
the case of Paguio Transport Corporation v.
NLRC.[20]
The Court also agrees with the labor arbiter and the CA
that respondents were illegally
dismissed by petitioner. Respondents were not accorded due process.[21]
Moreover, petitioner failed to show that the cause for termination falls under any of the grounds enumerated in
Article 282
(then Article 283)[22]
of the Labor Code.[23]
Consequently, respondents are entitled to reinstatement without loss of
seniority rights and other privileges and to their full backwages
computed from the date of dismissal up to the time of their actual
reinstatement in accordance with Article 279 of the Labor Code.
Reinstatement
is obtainable in this case because it has not been shown that there is an
ensuing “strained relations” between petitioner and respondents. This is
pursuant to the principle laid down in Globe-Mackay Cable and Radio
Corporation v. NLRC[24] as
quoted earlier in the CA decision.
With regard to respondents’ monetary claim, the same shall be
governed by Section 20 (then Section 21), Rule 3 of the Rules of Court which
provides:
SEC. 20. Action on contractual money claims. – When
the action is for recovery of money arising from contract, express or implied,
and the defendant dies before entry of final judgment in the court in which the
action was pending at the time of such death, it shall not be dismissed but
shall instead be allowed to continue until entry of final judgment. A favorable
judgment obtained by the plaintiff therein shall be enforced in the manner
provided in these Rules for prosecuting claims against the estate of a deceased
person. (21a)
In relation to this, Section 5, Rule 86 of the Rules
of Court states:
SEC. 5. Claims which must be filed under the notice. If not filed, barred ; exceptions. – All claims for money against the decedent arising from contract, express or implied, whether the same be due, not due, or contingent, ... and judgment for money against the decedent, must be filed within the time limited in the notice; otherwise they are barred forever, except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants….
Thus, in accordance with the above Rules, the money claims of
respondents must be filed against the estate of petitioner Melencio
Gabriel.[25]
WHEREFORE, the petition is DENIED. The Decision and Resolution of
the Court of Appeals dated
No costs.
SO ORDERED.
ADOLFO S. AZCUNA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Chairperson
Chief Justice
ANGELINA
SANDOVAL-GUTIERREZ RENATO
C. CORONA
Associate Justice
Associate Justice
CANCIO C. GARCIA
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
REYNATO S.
PUNO
Chief Justice
[1] Under Rule 45 of the Rules of Court.
[2] In NLRC-NCR Case No. 00-11-07420-95 entitled “Nelson Bilon, et al. v. Melencio Gabriel, et al.”
[3] Rollo, pp. 39-45, CA Decision, pp. 2-8.
[4] Case entitled ”Nelson
B. Bilon, Angel Brazil and Ernesto Pagayagay. v. Melencio
Gabriel, Operator, and Bacoor Transport Service
Cooperative, Inc.”
[5] Nelson
B. Bilon was hired by petitioner in December 1990,
Angel Brazil in November 1984, and Ernesto Pagaygay in
November 1991.
[6] Rollo, pp. 82-83.
[7]
[8] Records, pp. 143-144.
[9] CA Rollo, pp. 44-45.
[10]
[11] G.R. No. 129449,
[12] G.R. No,
82511,
[13] Rollo, pp. 48-51.
[14]
[15] CA Rollo, pp. 56-57.
[16] CA Rollo, pp. 40-41.
[17] G.R. No. 117495,
[18] 98 Phil 648 (1956).
[19] Art. 280 of The Labor Code of the Philippines; Zanotte Shoes v. NLRC, G.R. No. 100665, February 13,
1995, 241 SCRA 261.
[20] G.R. No. 119500,
[21] Article 277(b) of the Labor Code of the Philippines provides: “Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires…Any decision taken by the employer shall be without prejudice to the right of the workers to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the dismissal was for a valid or authorized cause shall rest on the employer…
[22] ART. 282. TERMINATION BY EMPLOYER – An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and,
(e) Other causes analogous to the foregoing.
[23] Section 1 of Rule XXIII (then Rule
XIV) of the Implementing Regulations of the Labor Code of the
[24] Supra note at 12.
[25] Robledo
v. National Labor Relations Commission, G.R. No. 110358,