EN BANC
G.R. No. 203355, August 18, 2015
LEO R. ROSALES, EDGAR SOLIS JONATHAN G. RANIOLA, LITO FELICIANO, RAYMUNDO DIDAL, JR., NESTOR SALIN, ARNULFO S. ABRIL, RUBEN FLORES, DANTE FERMA AND MELCHOR SELGA, Petitioners, v. NEW A.N.J.H. ENTERPRISES & N.H. OIL MILL CORPORATION, NOEL AWAYAN, MA. FE AWAYAN, BYRON ILAGAN, HEIDI A. ILAGAN AND AVELINO AWAYAN, Respondents.
D E C I S I O N
VELASCO JR., J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the September 5, 2012 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 124395, which, in turn, affirmed the Resolutions of the National Labor Relations Commission (NLRC) dated December 28, 20112 and February 28, 20123 in NLRC-LAC Case No. 07-001796-11.
Respondent New ANJH Enterprises (New ANJH) is a sole proprietorship owned by respondent Noel Awayan (Noel). Petitioners are its former employees who worked as machine operators, drivers, helpers, lead and boiler men.
Allegedly due to dwindling capital, on February 11, 2010, Noel wrote the Director of the Department of Labor and Employment (DOLE) Region IV-A a letter regarding New ANJH's impending cessation of operations and the sale of its assets to respondent NH Oil Mill Corporation (NH Oil), as well as the termination of thirty-three (33) employees by reason thereof.4 On February 13, 2010, Noel met with the 33 affected employees, which included petitioners, to inform them of his plan.5 On even date, he gave the employees uniformly-worded Notices dated February 12, 20106 informing them of the cessation of operations of New ANJH effective March 15, 2010 and the sale of its assets to a corporation. Noel also offered the employees, including petitioners, their separation pay.
On March 5, 2010, Noel signed a Deed of Sale selling the equipment, machines, tools and/or other devices being used by New ANJH Enterprises for the manufacturing and/or extraction of coconut oil for P950,000 to NH Oil, as represented by respondent Heidi A. Ilagan (Heidi), Noel's sister.7cralawrednad
Parenthetically, the Articles of Incorporation of NH Oil were prepared on January 27, 2010 with Noel appearing to have more than two-thirds (2/3) of the subscribed capital stock of the corporation.8 The remaining shares had been subscribed by Heidi and other members of the Awayan family.9cralawrednad
On March 8, 2010, respondents New ANJH and Noel filed before the NLRC Sub-Regional Arbitration Branch No. IV (NLRC-SRAB-IV), San Pablo City a "Letter Request for Intervention," which was docketed as SRAB-IV-03-5066-10-L. The letter request reads:cralawlawlibrary
Please be informed that the business operations of the New ANJH Enterprises, a single Proprietorship engaged in oil extraction situated in San Pablo City, will be permanently closed effective 15 March 2010 due to lack of capital caused by enormous uncollected receivables/debts and the necessity for the plant to undergo general repairs and maintenance.On March. 16, 2010, petitioners Lito Feliciano (Feliciano), Edgar Solis (Solis), and Nestor Salin (Salin) received their respective separation pays, signed the corresponding check vouchers and executed Quitclaims and Release before Labor Arbiter Melchisedek A. Guan (LA Guan) of NLRC SRAB-IV San Pablo Office.11cralawrednad
x x x x
In this connection, we respectfully request that we be allowed to effect the payment of the separation benefits to our employees before your Office and with your kind intervention to ensure that we are properly guided by the provisions of law in this undertaking.10 (Emphasis supplied)
The filing of a motion to reduce bond and compliance with the two conditions stop the running of the period to perfect an appeal. x x xIn this case, the NLRC had reconsidered its original position and declared that the 60% bond was reasonable given the merits of the justification provided by respondents in their Motion to Reduce Bond, as supplemented by their Motion for Reconsideration with Motion to Admit Additional Appeal Cash Bond. The CA affirmed the merits of the grounds cited by respondents in their motions and the reasonableness of the bond originally posted by respondents. This is in accord with the guidelines established in McBurnie v. Ganzon,33 where this Court declared that the posting of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal is sufficient provided that there is meritorious ground therefor, viz:cralawlawlibrary
x x x x
The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether the appellant's motion is indeed based on "meritorious ground" and whether the bond he or she posted is of a "reasonable amount." Thus, the appellant always runs the risk of failing to perfect an appeal.
x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of the Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion, then the decision of the labor arbiter becomes final and executory.
x x x
In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court held:cralawlawlibrary"Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be perfected only upon the posting of cash or surety bond. The Court, however, has relaxed this requirement under certain exceptional circumstances in order to resolve controversies on their merits. These circumstances include: (1) fundamental consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and the issue involved."32 (emphasis and underscoring supplied)
[O]n the matter of the filing and acceptance of motions to reduce appeal bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth, the following guidelines shall be observed:cralawlawlibraryIt is noted that the respondents have eventually posted the full amount of the award ordered by the labor arbiter. Thus, given the absence of grave abuse of discretion on the part of the NLRC and the affirmation of the CA of the reasonableness of the motions and the amount of bond posted, there is no ground for this Court to reverse the CA's finding that the appeal had been perfected.(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2), a motion shall be accompanied by the posting of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal, exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount of bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the provisional bond, the appellant shall be given a fresh period of ten (10) days from notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.34 emphasis and underscoring added)
Art. 224. Jurisdiction of the Labor Arbiters and the Commission.The invocation of the labor arbiter's jurisdiction by way of a letter request instead of a complaint is of no moment, as it is well-settled that the application of technical rules of procedure is relaxed in labor cases.
(a) Except as otherwise provided under this Code,the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non agricultural:ChanRoblesvirtualLawlibrary
1. Unfair labor practice cases;
2. Termination disputes;
x x x x
- Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (Emphasis supplied)
The conformity of the employees to the corporation's act of considering them as terminated and their subsequent acceptance of separation pay does not remove the taint of illegal dismissal. Acceptance of separation pay does not bar the employees from subsequently contesting the legality of their dismissal, nor does it estop them from challenging the legality of their separation from the service.38 (Emphasis supplied)In the absence of the third and fourth requisites, the appellate court should have proceeded to rule on the validity of petitioners' termination.
Nais po naming ipaabot sa inyo na ang New ANJH Enterprises ay ihihinto na ang operasyon dahil sa nagpasya ako bilang may-ari na ipagbili na ang ari-arian nito sa iba kung kayat magkakaroon ng pagpapalit sa pamumunuan nito.Subsequent events, however, revealed that the buyer of the assets of their employer was a corporation owned by the same employer and members of his family. Furthermore, the business re-opened in less than a month under the same management.
Kaugnay po nito at ayon sa itinatadhana ng batas ay nais kong ipaabot sa inyo na 30 araw matapos ninyong matanggap ang pasabing ito o simula sa Marso 15, 2010 ay ititigil na ang operasyon ng New ANJH Enterprises at sa nasabi ring petsa ay matatapos na rin ang pagtratrabaho o "employment" ninyo sa New ANJH Enterprises.40
Respondents did not allege that they informed complainants neither did they state in the notices of termination that the buyer in the "impending sale" is NH Oil Mill. Pondering on these observations, this Office finds it too difficult to surmise that respondents' omission was not deliberate, and so this Office holds that Noel was not in good faith in dealing with complainants. The information disclosed by the Certificate of Registration and Articles of Incorporation of NH Oil Mill explains respondents' motive. Its stockholders are members of [Noel's] family known to complainants, and Noel is the controlling stockholder and director. The immediate resumption of operation after cessation of operation on March 15, 2010 further explains it. While complainants failed to prove that the stockholders in NH Oil Mill were those who managed ANJH, respondents did not dispute that there was no change in the management people, premises, tools, devices, equipment, and machinery under NH Oil Mill. The buyer in the "impending sale" undisclosed in the notices to complainants is divulged by subsequent development to be practically the same as the seller. These things are inconsistent with good faith.Clearly, the milieu of the present case compels this Court to remove NH Oil's corporate mask as it had become, and was used as, a shield for fraud, illegality and inequity against the petitioners.
x x x x
Here, complainants' employment was terminated for the alleged sale of assets of ANJH to NH Oil Mill that would allegedly entail [a] change of management. The Deed of Sale dated March 5, 2010 [that] respondents presented (Annex "20", respondents position paper) to prove the "sale," states that [for] the consideration of Nine Hundred Fifty Thousand Pesos (Php950,000.00), Noel sold to NH Oil Mill the equipment, machines, tool and/or other devises being used by ANJH for manufacturing and/or extraction of coconut oil. This Office cannot simply accept it as sufficient proof of sale by the seller to a distinct and separate entity.
x x x x
The subscribed capital stock of Noel and Heidi [in NH Oil] are worth Php790,000.00 and Php190,000.00, respectively, or the total of Php980,000.00. Respondents claim that Noel was managing ANJH and Heidi was its Secretary. The Deed of Sale is signed by Noel and Heidi, Noel as [sellerl, and Heidi as representative of NH Oil Mill. Respondents did not enumerate what [were] the equipment etc. subject of the "sale," and how they were depreciated, and what [were] the equipment/machines owned by Avelino and rented by NH Oil Mill and for how much? Therefrom, it is extremely difficult to conclude by quantum of evidence acceptable to [a] reasonable mind, [that] the "sale to a distinct entity" is genuine. And while the notices of termination state that there would be [a] change in management, this Office notes that respondents do not deny that Noel and Heidi continue to manage NH Oil Mill. Therefore, as far as complainants' employment is concerned, this Office pierces the veil of corporate fiction of NH Oil Mill and finds that the purported sale thereto of the assets of ANJH is insufficient to validly terminate such employment. This Office cannot rule otherwise without running afoul to the mandate of the Constitution securing to the workingman his employment, and guaranteeing to him full protection. So this Office declares that complainants were illegally dismissed.42 (emphasis and underscoring supplied)
Endnotes:
1Rollo, pp. 44-67. Penned by Associate Justice Vicente S.E. Veloso, with Associate Justices Jane Aurora C. Lantion and Eduardo B. Peralta, Jr. concurring.
2 Id. at 100-110. Penned by NLRC Presiding Commissioner Herminia V. Suelo, with Commissioners Angelo Ang Palana and Numeriano D. Villena concurring, Fourth Division.
3 Id. at 111-115.
4 Id. at 192-194.
5 Id. at 195-196.
6 Id. at 435- 444.
7 Id. at 190-191.
8 Id. at 141-146. The following are the incorporators of NH Oil Mill Corporation with their respective subscribed and paid-up shares:ChanRoblesvirtualLawlibrary
Name No. of Shares Subscribed Paid-Up 1. Noel D. Awayan 7,900 P790,000.00 P237,000.00 2. Heide A. Ilagan 1,900 P190,000.00 P57,000.00 3. Marife D. Awayan 100 P10,000.00 P3,000.00 4. Jay Byron S. Ilagan 50 P5,000.00 P1,500.00 5. Imelda S. Awayan 50 P5,000.00 P1,500.00 TOTALP1,000,000.00 P300.000.00
[9 Id.
10 Id. at 307.
11 Id. at 447-448, 451-452, 455-456.
12 Id. at 445-446.
13 Id. at 449-450, 453-454, 457-464.
14 Id. at 184-189.
15 Id. at 182-183.
16 Id.at 183, 185, 187, and 189.
17 Id. at 116-121.
18 Id. at 238-251.
19 Id. at 254-274.
20 Id. at 275-277.
21 Id.
22 Id. at 286-288.
23 Id. at 290-297.
24 Id. at 296.
25cralawred Id. at 298-331.
26 Id. at 331.
27 Id. at 340-346.
28 Supra note 2.
29 Supra note 3.
30 Supra note 1.
31 G.R. No. 196830, February 29, 2012, 667 SCRA 396.
32 Id. at 409-411.
33 G.R. Nos. 178034 & 178117, G.R. Nos. 186984-85, October 17, 2013, 707 SCRA 646.
34 Id. at 693-694.
35Luzon Development Bank v. Conquilla, G.R. No. 163338, September 21, 2005, 470 SCRA 533, 545.
36 A judgment is "on the merits" when it amounts to a legal declaration of the respective rights and duties of the parties, based upon the disclosed facts. See Manalo v. CA, G.R. No. 124204, April 20, 2001, 357 SCRA 112, 121; Mendiola v. CA, G.R. No. 122807, July 5, 1996, 258 SCRA 492, 500-501.
37 G.R. No. 184517, October 8, 2013, 707 SCRA 35.
38 Id. at 57.
39Kukan International Corporation v. Reyes, G.R. No. 182729, September 29, 2010, 631 SCRA 596, 617.
40 Supra note 6.
41Prince Transport, Inc. v. Garcia, G.R. No. 167291, January 12, 2011, 639 SCRA 312.
42 Supra note 18 at 246-248.