THIRD
DIVISION
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PHILIPPINE AIRLINES,
INCORPORATED, FRANCISCO X. YNGENTE IV,
PAG-ASA C. RAMOS, JESUS FEDERICO V. VIRAY, RICARDO D. ABUYUAN,
Petitioners, - versus - BERNARDIN J. ZAMORA,
Respondent. |
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G. R. No. 166996 Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ. Promulgated: February
6, 2007 |
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CHICO-NAZARIO, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules
of Court, as amended, seeks to set aside the
This case stemmed from a labor Complaint[6] filed
by herein respondent Bernardin J. Zamora (Zamora) against herein petitioners
PAL and Francisco X. Yngente IV, Assistant
Vice-President, PAL Cargo Sales and Services, for illegal dismissal, unfair labor practice, non-payment of wages, damages and attorney’s fees. The
complaint was docketed as NLRC NCR Case No. 00-03-01672-96. Later on, on
respondent Zamora’s motion, Pag-asa C. Ramos, Manager, PAL Payroll and
Timekeeping Department, Jesus Federico V. Viray, Operations Director for
International Cargo, PAL Import Division, Ricardo D. Abuyuan, Supervisor
for International Cargo, PAL Import Division, and Gerardo V. Ignacio, Manager,
PAL Import Operations Division, were included as party-respondents in the labor
case.
As culled from the records of the case,
the facts are as follows:
Respondent
On
On
On
WHEREFORE, consistent with the foregoing
tenor, judgment is hereby entered dismissing the charges of illegal dismissal
for lack of merit. Complainant is, however, ordered to report to his new assignment
at respondent PAL’s Domestic Cargo and for respondent PAL to accept him back to
work under the same terms and conditions of employment prior to the dispute as
soon as it resumes operations or, for respondent PAL to pay him his appropriate
separation pay in the event it finally closed shop.
The rest of the claims is (sic) likewise
dismissed for lack of merit.
In dismissing the complaint, the labor
arbiter considered respondent
On appeal, the NLRC, on
x x x What appears
to be simply an order of transfer is actually an attempt to strifle (sic)
complainant’s (respondent Zamora) efforts to avert illegal activities at his
original work assignment. For why would the individual respondents pick on
complainant only after he wrote to the company President, unless there is a
veiled attempt to weaken his chance to have a full investigation conducted on
an anomaly immediately after he had started to spill out the beans, so to
speak.
The decretal part of the subject
decision provides:
WHEREFORE, in light of the foregoing,
the instant appeal is hereby GRANTED. The assailed Decision dated
Moreover, respondents are hereby ordered
to immediately reinstate complainant Bernardin J. Zamora to his former position
as Cargo Representative at the Import Operations Division of respondent PAL
without loss of seniority rights and other privileges and to pay him back
salaries and backwages beginning
All other reliefs herein sought and
prayed for are hereby DENIED for lack of merit.[12]
Respondent
On
Claiming that the
What transpired next, as revealed by the
record of the instant petition, was an exchange of a barrage of pleadings.
Petitioners PAL, et al., filed a “Motion to Furnish Respondents a Copy of the
NLRC Decision Promulgated on July 26, 1999”[16] dated
On
Thereafter, petitioners PAL, et al. filed an Opposition[19] (to Complainant’s Motion for Partial Entry
of Judgment) as well as a Motion for
Reconsideration[20] of
the
On
Not to be outdone, petitioners PAL, et al. filed a Comment[23]
to respondent
Subsequently, the NLRC resolved to deny
the Motion for Reconsideration of
petitioners PAL, et al. in a Resolution[24]
dated
Aggrieved by the ruling of the NLRC in
its
On
On
WHEREFORE, finding the motion to be well taken and in
order, the same is granted and respondents are hereby cited for indirect
contempt for their failure to comply with the order of the Hon. Commission.
They are directed anew to reinstate complainant immediately to his former
position as Cargo Representative, physically or in the payroll, and fined an
amount of P100.00 per day from
Further, let a writ of execution be issued.
Undaunted, petitioners PAL, et al. appealed the abovementioned
Respondent
In a Resolution[35]
dated
WHEREFORE, the Order appealed from is hereby SET ASIDE.
The Labor Arbiter is hereby advised to forthwith issue a
Writ of Execution which, due to a supervening event, the abolition of PAL’s
Import Operations Division – must vary the terms of the final judgment to the
extent that: (1) the complainant must be awarded, in lieu of reinstatement, separation
pay equivalent to one month’s salary for every year of service from February 9,
1981 to June 30, 2000; and (2) the award of backwages must be computed from
December 15, 1995 to June 30, 2000.
In setting aside the challenged Order of the labor arbiter, the NLRC
gave premium to the copy[36]
of the structural organization of petitioner PAL’s Cargo Services
Sub-Department showing that as of 30 June 2000, the Import Operations Division,
to which respondent Zamora’s previous position actually belonged, had already been
abolished. It opined that:
x x
x As it is common knowledge that
respondent PAL implemented a massive retrenchment program in 1998-1999, and
since it is only the complainant who stands to lose if the instant case were to
be allowed to drag any longer, this Commission finds that the technical rules
of evidence applicable in the ordinary courts of law must be set aside, and the
respondent’s contention that the complainant’s former position no longer exists
may be considered to be meritorious.[37]
The commission then proceeded to award respondent
Section 4
(d), Rule VI of the Implementing rules of the Labor Code provides that ‘where
(the employee’s) former position no longer exists at the time of reinstatement
for reasons not attributable to the fault of the employer, the employee shall
be entitled to separation pay equivalent to at least one month salary or to one
month salary for every year of service, whichever is higher, a fraction of at
least six months being considered as one whole year. x x x.[39]
The NLRC concluded that the award to
respondent
Displeased with the preceding
resolution, both parties moved for the reconsideration of the same. In his
motion, respondent
On
WHEREFORE, complainant’s Motion for Partial Reconsideration
is DENIED for lack of merit. Respondent’s Partial Motion for Reconsideration is
GRANTED. The instant case is hereby referred to the permanent rehabilitation
receiver and the proceedings hereon are deemed SUSPENDED while respondent
Philippine Airlines, Inc. is under rehabilitation receivership.[40]
The NLRC then ordered the suspension of the instant
proceedings in light of the
On
On
WHEREFORE, in view of the foregoing, the petition is
GRANTED. The NLRC resolution dated
In said Decision, the Court of Appeals found the NLRC to have gravely
abused its discretion amounting to lack or excess of jurisdiction when the
latter, instead of enforcing its 26 July
1999 Decision by ordering respondent Zamora’s reinstatement, varied the
terms of said decision by suspending the proceedings and referring the case to
petitioner PAL’s rehabilitation receiver. The appellate court ratiocinated that:
The Court of Appeals also rejected the
documents proffered by petitioner PAL which supposedly evidenced the abolition
of the former position of respondent
Petitioner PAL seasonably moved for the
reconsideration of the aforequoted Court of Appeals Decision. It also manifested
to the appellate court that since
On
WHEREFORE, this Court’s
‘WHEREDORE, in view of the foregoing, the petition is
GRANTED. The NLRC resolution dated
SO ORDERED.’
Considering that PAL is still under receivership, the
monetary claims of petitioner
The Court of Appeals took into account
respondent
However, since PAL is still under receivership, the
provisions of PD 902-A, should apply. The enforcement of the monetary claims of
petitioner should be brought before the PAL Rehabilitation Receiver for proper
disposition.[45]
In spite of such
modification, petitioner PAL found fault with the decision. Hence, this petition for review on certiorari
under Rule 45 of the Rules of Court, as amended, predicated on the following
issues:[46]
I.
THE COURT OF APPEALS COMMITTED A SERIOUS AND GRAVE ERROR AMOUNTING TO
LACK AND/OR EXCESS OF JURISDICTION IN DECLARING ILLEGAL THE DISMISSAL OF
RESPONDENT
II.
THE COURT OF APPEALS COMMITTED A PALPABLE ERROR IN ORDERING PAL TO PAY
RESPONDENT ZAMORA HIS ‘SEPARATION PAY, IN LIEU OF REINSTATEMENT, TO BE COMPUTED
AT ONE MONTH SALARY FOR EVERY YEAR OF SERVICE FROM FEBRUARY 9, 1981AND
BACKWAGES TO BE COMPUTED FROM DECEMBER 15, 1995, BOTH UP TO OCTOBER 12 (sic),
2000, THE DATE OF HIS INCARCERATION; and
III.
THE COURT OF APPEALS COMMITTED A SERIOUS AND GRAVE ERROR IN ORDERING THAT
RESPONDENT
At this point, notwithstanding the fact that the present
petition alleges three issues, the resolution of the third one relating to the propriety
of the execution of the NLRC’s order of reinstatement[47] despite
the verity of the 17 May 1999 SEC Order approving the Amended and Restated Rehabilitation Plan
of petitioner PAL and appointing a “permanent rehabilitation receiver for the
latter,”[48] is of paramount
importance. The overriding legal significance to the instant case of the SEC
mandated rehabilitation of petitioner PAL will affect the progress, development
or advancement of the present petition.
Petitioners PAL, et al. are of the view that the proceedings in the instant case
should have been suspended on account of the appointment of its permanent rehabilitation receiver. They posit that “the suspension automatically
applies on all stages of the proceedings including enforcement of final and
executory judgments. The proceedings shall remain suspended until the
receivership shall have been ordered lifted by the Securities and Exchange
Commission. To date,[49] (petitioner)
PAL is still under permanent Rehabilitation Receiver.”[50]
Quite the reverse, respondent Zamora, in
his Memorandum, opines that “contrary
to the noble purpose of a receivership, that is, preservation of the distressed
company’s assets for ultimate distribution to all creditors and affected
parties, petitioner’s Amended and Restated Rehabilitation Plan (citation
omitted) is actually for the restructuring and payment of petitioner’s debts to
certain creditors, excluding respondent and other employee-claimants.”[51]
We disagree.
The relevant law dealing with the
suspension of actions for claims against corporations is Presidential Decree
No. 902-A,[52] as
amended.[53] Particularly, Section 5(d) which reads:
SECTION 5. In addition to the regulatory adjudicative functions of the
Securities and Exchange Commission over corporations, partnerships and other
forms of associations registered with it as expressly granted under existing
laws and decrees, it shall have original and exclusive jurisdiction to hear and
decide cases involving:
x x x x
d) Petitions of corporations, partnerships
or associations to be declared in the state of suspension of payments in cases
where the corporation, partnership or association possesses property to cover
all its debts but foresees the impossibility of meeting them when they
respectively fall due or in cases where the corporation, partnership or
association has no sufficient assets to cover its liabilities, but is under the
[management of a rehabilitation receiver or] management committee created
pursuant to this Decree.
and Section 6(c), to wit:
SECTION
6. In order to effectively exercise such
jurisdiction, the Commission shall possess the following:
x x x x
c) To appoint one or more receivers of the
property, real or personal, which is the subject of the action pending before
the Commission in accordance with the pertinent provisions of the Rules of
Court in such other cases whenever necessary in order to preserve the rights of
the parties-litigants and /or protect the interest of the investing public and
creditors: x x x Provided, finally, That
upon appointment of a management committee, the rehabilitation receiver, board
or body, pursuant to this Decree, all actions for claims against corporations, partnerships or associations under
management or receivership pending before any court, tribunal, board or body
shall be suspended accordingly.
(Emphasis supplied.)
The
term “claim,” as contemplated in Sec. 6 (c) of Presidential Decree No. 902-A,
refers “to debts or demands of a pecuniary nature. It means ‘the assertion of a
right to have money paid.’”[54]
In the case of BF Homes, Incorporated v. Court of Appeals,[55] speaking
through Mr. Justice Isagani B. Cruz, this Court ruled therein that suspension
of the action was in order; although the collection suit against the
corporation was still at its initial stage in the Regional Trial Court when its
Petition for Rehabilitation and for a Declaration in a State of Suspension of
Payments was approved by the SEC.
The
raison d'ętre behind the suspension
of claims pending rehabilitation proceedings was explained in this wise:
In light of these powers, the reason
for suspending actions for claims against the corporation should not be
difficult to discover. It is not really
to enable the management committee or the rehabilitation receiver to substitute
the defendant in any pending action against it before any court, tribunal,
board or body. Obviously, the real justification is to enable the management committee
or rehabilitation receiver to effectively exercise its/his powers free from any
judicial or extra-judicial interference that might unduly hinder or prevent the
“rescue” of the debtor company. To allow
such other action to continue would only add to the burden of the management
committee or rehabilitation receiver, whose time, effort and resources would be
wasted in defending claims against the corporation instead of being directed
toward its restructuring and rehabilitation.[56] (Emphasis supplied.)
In
the case of Rubberworld (Phils.), Inc. v.
NLRC,[57] the
preceding principle was applied to a case involving claims of employees. After
placing Rubberworld (Phils.) under a
management committee by the SEC, the former’s alleged employees filed before
the labor arbiter complaints for illegal dismissal, unfair labor practice,
damages and payment of other benefits. Rubberworld (Phils.) moved to suspend
the proceedings of the labor cases predicated on the strength of the SEC order
placing it under a management committee.
The labor arbiter denied the motion holding that the injunction
contained in the SEC order applied only to the enforcement of established
rights and did not include suspension of proceedings involving claims against Rubberworld (Phils.) which have yet to be
ascertained. The labor arbiter further
held that the order of the SEC suspending all actions for claims against Rubberworld (Phils.) did not cover the
claims of employees in the labor cases because said claims, and the concomitant
liability of Rubberworld (Phils.),
are still to be determined, thus carrying no dissipation of the assets of the
latter. In rejecting the postulations of
the labor arbiter, we held that the actions of the workers before the labor
arbiter are among the actions that are suspended upon the placing of the
employer-corporation under management committee. In unambiguous terms, this Court articulated
that:
It is plain from the foregoing
provisions of law that “upon the appointment [by the SEC] of a management
committee or a rehabilitation receiver,” all actions for claims against the
corporation pending before any court, tribunal or board shall ipso jure be suspended. x x x. (Emphasis supplied.)
x x x x
x x x The law is clear: upon the creation of a
management committee or the appointment of a rehabilitation receiver, all
claims for actions “shall be suspended accordingly.” No exception in favor of labor claims is
mentioned in the law. Since the law
makes no distinction or exemptions, neither should this Court. Ubi lex non distinguit nec nos distinguere
debemos. x x x.[58]
Similar
to the instant petition is this Court’s Resolution
in the case of Philippine Airlines, Inc.
v. NLRC.[59] Therein, PAL questioned, albeit via a petition for certiorari under Rule 65 of the Rules of Court, before us, the
decision of the NLRC awarding separation pay to Quijano, an employee of PAL. During the pendency of the petition, however, PAL
moved for the suspension of proceedings of the case by virtue of the SEC order
which appointed an Interim Rehabilitation Receiver for PAL. Before acting on said motion, we required the
parties to submit memoranda and to address the issue of whether or not this
Court should render judgment during the state of suspension of claims. PAL argued therein that the continuance of
actions for claims during receivership would add to the burden of the
rehabilitation receiver; that if such claim was granted, the employee, as a
money judgment creditor, would be in a position to assert a preference over
other creditors. The employee, however, contended
that the claim for separation pay may be awarded despite PAL being under a
state of receivership since said claim was secured by the supersedeas bond posted by the employer. The employee maintained
that the suspension of proceedings provided in Section 6(c) of Presidential Decree
No. 902-A refers to actions or suits for claims against corporations placed
under receivership and not to petitions for certiorari
initiated by the corporation under receivership. In a Resolution
dated
In Rubberworld (Phils.), Inc. v. NLRC, we held that worker’s claims before the NLRC and labor arbiters are included among the actions suspended upon the placing under receivership of the employer-corporations. Although strictly speaking, the ruling in Rubberworld dealt with actions for claims pending before the NLRC and labor arbiters, we find that the rationale for the automatic suspension therein set out would apply to the instant case where the employee’s claim was elevated on certiorari before this Court, x x x.
x x x x
The Court holds that rendition of
judgment while petitioner is under a state of receivership could render
violence to the rationale for suspension of payments in Section 6 (c) of P.D.
902-A, if the judgment would result in the granting of private respondent’s
claim to separation pay, thus defeating the basic purpose behind Section 6 (c)
of P.D. 902-A which is to prevent dissipation of the distressed company’s resources.
(Emphasis supplied.)
And quite recently, in another PAL
case, specifically, Philippine Airlines,
Inc. v. Court of Appeals,[60] we
resolved to grant PAL’s Motion for
Suspension of Proceedings before us by reason of the SEC Orders dated
To emphasize, this Court’s adherence
to the abovestated rule has been resolute and steadfast
as evidenced by its oft-repeated application in a plethora of cases.[61]
Otherwise stated, no other action may
be taken in, including the rendition of judgment during the state of suspension
– what are automatically stayed or suspended are the proceedings of an action
or suit and not just the payment of claims during the execution stage after the
case had become final and executory.
The
suspension of action for claims against a corporation under rehabilitation
receiver or management committee embraces all phases of the suit, be it before the trial court or any
tribunal or before this Court. Furthermore, the actions that are suspended
cover all claims against a distressed corporation whether for damages founded
on a breach of contract of carriage, labor cases, collection suits or any other
claims of a pecuniary nature.[62]
In the case at bar, the appellate
court’s pronouncement that in “disallowing the enforcement to
the claim x x x it would unnecessarily add to the burden of management, does
not justify the aggravation caused in the delay in execution of the judgment in
favor of
As to the appellate court’s amended
directive that “the monetary claims of petitioner
WHEREFORE,
premises considered, the instant petition is PARTIALLY GRANTED in that herein proceedings are hereby SUSPENDED until further notice from this
Court. Accordingly, petitioner Philippine Airlines, Inc. is hereby directed to quarterly
update the Court as to the status of its ongoing rehabilitation. No costs.
SO
ORDERED.
|
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MINITA
V. CHICO-NAZARIO
Associate Justice |
WE
CONCUR:
Associate Justice
Chairperson
|
MA. ALICIA AUSTRIA-MARTINEZ Associate Justice |
ROMEO
J. CALLEJO
Associate Justice |
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CONSUELO YNARES-SANTIAGO
Associate Justice Chairperson, Third Division |
Pursuant to Article VIII,
Section 13 of the Constitution, and the Division Chairperson’s Attestation, it
is hereby certified that the conclusions in the above Resolution were reached
in consultation before the case was assigned to the writer of the opinion of
the Court’s Division.
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REYNATO S. PUNO
Chief Justice |
[1] Penned by Court of Appeals
Associate Justice Eliezer R. De Los Santos with Associate Justices Delilah
Vidallon-Magtolis and Arturo D. Brion concurring; rollo, pp. 78-89.
[2]
[3] Penned by NLRC Commissioner Ireneo
B. Bernardo with Commissioners
[4]
[5]
[6] CA rollo, p. 41.
[7] Assistant Vice-President for Cargo Sales and Services of petitioner PAL.
[8] Hon. Voltaire A. Balitaan.
[9] Rollo, pp. 97-105.
[10]
[11] NLRC Decision dated
[12]
[13]
[14]
[15]
[16]
[17] G.R. No. L-58781,
[18] CA rollo, pp. 84-86.
[19]
[20]
[21]
[22]
[23]
[24] Rollo,
pp. 248-249.
[25] CA rollo, pp. 117-143.
[26] Now before this Court, docketed as G.R. No. 164267.
[27]
[28]
[29]
[30] Hon. Joselito Cruz Villarosa.
[31] CA rollo, pp. 247-249; respondent Zamora moved to have the appeal
expunged from the records of the NLRC arguing that inasmuch as the contemptuous
act was committed against the NLRC, the power to punish for contempt belonged
solely to the Commission; therefore, the remedy against a finding of indirect
contempt was not an appeal to the Court of Appeals but a motion for
reconsideration filed before the NLRC.
Petitioners PAL, et al.
opposed the motion to expunge.
[32]
[33]
[34]
[35] Rollo,
pp. 168-173.
[36] CA rollo, pp. 392-408.
[37] Rollo, p. 171.
[38] According to the
[39] Rollo,
pp. 171-172.
[40] See note 4.
[41] Rollo, p. 89.
[42]
[43] Respondent
[44]
[45]
[46] Petition for Review on Certiorari, p. 9; rollo, p. 58.
[47] But was later on modified to one of payment of separation pay for every year of
service.
[48] In the person of Mr. Renato Z. Francisco; rollo, p. 293.
[49]
[50] Memorandum
of Petitioner PAL, p. 20; rollo, p.
854.
[51]
[52] SEC Law.
[53] On 15 December 2000,
the Supreme Court, in A.M. No. 00-8-10-SC, adopted the Interim Rules of
Procedure on Corporate Rehabilitation and directed to be transferred from the
SEC to Regional Trial Courts all petitions for rehabilitation filed by
corporations, partnerships, and associations under Presidential Decree No.
902-A in accordance with the amendatory provisions of Republic Act No.
8799. The rules require trial courts to
issue, among other things, a stay order in the “enforcement of all claims,
whether for money or otherwise, and whether such enforcement is by court action
or otherwise,” against the corporation under rehabilitation, its guarantors and
sureties not solidarily liable with it.
Although the jurisdiction of SEC over rehabilitation and suspension of payments cases was transferred to the Regional Trial Courts pursuant to Republic Act No. 8799, otherwise known as The Securities Regulation Code, which took effect on 8 August 2000, the SEC, pursuant to Section 5.2 of the same law, retains jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.
[54] Sobrejuanite
v. ASB Development Corporation, G.R. No. 165675,
[55] G.R. No. 76879 and G.R. No. 77143,
[56]
[57] 365 Phil. 273 (1999).
[58]
[59] Promulgated by the Third Division of
the Supreme Court, G.R. No. 123294,
[60] Supreme Court’s Second Division
Resolution, G.R. No. 123238,
[61] Alemar’s
Sibal and Sons, Inc. v. Elbinias, G.R. No. 75414, 4 June 1990, 186 SCRA 94;
BF Homes, Inc. v. Court of Appeals,
G.R. No. 76879, 3 October 1990, 190 SCRA 262; Bank of the Philippine Islands v. Court of Appeals, G.R. No. 97178,
10 January 1994, 229 SCRA 223; Rubberworld
(Phils.) Inc. v. National Labor Relations Commission, 365 Phil. 273 (1999);
Philippine Airlines v. National Labor Relations
Commission, G.R. No. 123294,
[62] Finasia
Investments and Finance Corp. v. Court of Appeals, G.R. No. 107002, 7
October 1994, 237 SCRA 446.