G.R. No.

100342-44 October 29, 1999

RURAL BANK OF ALAMINOS EMPLOYEES UNION (RBAEU) and ISMAEL TAMAYO,

SR., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, Third Division, Exec. Labor Arbiter JOSE B.
BOLISAY and RURAL BANK OF ALAMINOS, Inc., respondents.
PURISIMA, J.:

Before The Court is a Petition for Certiorari under Rule 65 of the Revised Rules of Court to
nullify and set aside the Resolution of the National Labor Relations Commission, dated January
31, 1991, and the subsequent Resolution of March 26, 1991 denying petitioner's motion for
reconsideration, for being tainted with grave abuse of discretion amounting to lack or excess of
jurisdiction. The assailed Resolutions set aside the consolidated decision of Labor Arbiter
Ricardo N. Olairez and remanded the cases to the Regional Arbitration Branch of origin for
further proceedings.

The Petition stems from three cases originally instituted before Sub-Regional Arbitration Branch
No. 1 of the National Labor Relations Commission in Dagupan City. The first case, NLRC Case
No. 01-03-7-0049-89, was commenced by the herein petitioner, Ismael Tamayo, Sr., against
Rural Bank of Alaminos, Inc. (RBAI) for illegal dismissal and damages. The second case,
docketed as NLRC Case No. 01-04-7-0059-89, was filed by the herein private respondent, Rural
Bank of Alaminos, Inc., against the Rural Bank of Alaminos Employees Union for unfair labor
practice, declaration of illegality of strike and damages. While the third case, docketed as NLRC
Case No. 01-06-0097-89, was filed by the Employees Union against the Bank, charging the latter
with unfair labor practice and damages.

As gathered by the respondent National Labor Relations Commission, the facts of the
controversy litigated upon are as follows:

With the appointment of one Benefredo Quinto to the position of internal auditor, which
position he had held since January 1, 1976, Ismael P. Tamayo, Sr., who had been with
Rural Bank of Alaminos, Inc. (RBAI for brevity) since it started operations in September
of 1956, feeling shortchanged, filed on June 3, 1988 a complaint against RBAI for illegal
dismissal.

In an effort to buy peace, that is, to settle the case amicably, RBAI agreed on a
compromise agreement dated July 13, 1988 to reinstate Ismael P. Tamayo, Sr. to the
position of internal auditor.

Claiming that his services were not actually needed, RBAI terminated effective January
1, 1989 Ismael P. Tamayo, Sr.'s services. This led to the filing on March 27, 1989 of a
complaint for illegal dismissal by Ismael P. Tamayo, Sr. against Rural Bank of Alaminos,
Inc. docketed as NLRC Case No. SUB-RAB-01-03-7-0049-89.

Subsequent to its certification on December 12, 1989 as the sole bargaining agent of the
employees of RBAI, the Rural Bank of Alaminos Employees Union (hereinafter called
the Union) submitted sometime in February 1989 proposals with respect to salary/wage
increases.

RBAI's counter-proposals not (sic) acceptable to it, the Union, which had earlier filed a
notice of strike on March 3, 1989, went on strike on April 3, 1989.

Its position being that the strike staged by the Union is illegal and in violation of Article
248 (e) of the Labor Code, RBAI instituted a petition for the declaration of the strike as
illegal and for actual damages it incurred by way of loss of earnings to the tune of
P30,000.00 per day. This petition was docketed as NLRC CASE NO. SUB-RAB-01-04-
7-0059-89.

The Union, assailing the alleged constructive dismissal of its members brought about or
resulting from the strike, lodged against RBAI a complaint for unfair labor practice with
prayer for moral and exemplary damages. This complaint has been docketed as NLRC
CASE NO. SUB-RAB-01-06-7-0097-89.

The identity of the parties led the Labor Arbiter, Ricardo N. Olairez, to consolidate the
three (3) aforementioned cases.

On December 14, 1989, Labor Arbiter Ricardo N. Olairez rendered a consolidated

decision.

With respect to Ismael P. Tamayo's complaint for illegal dismissal against RBAI, the
Labor Arbiter held that complainant, whose nature of work, that of internal auditor, was
usually necessary and desirable in the business engaged in by the respondent, was a
regular employee whose summary discharge from the service effective January 1, 1989,
was illegal.

The dismissal being illegal, complainant should have ordinarily been reinstated to his
former position. However, the Labor Arbiter, finding the complainant to have reached the
retirable age, opted instead to award the latter the following amounts, to wit: P63,442.56
representing full backwages/benefits; P29,822.80 as retirement pay; and P9,326.53 as
attorney's fees, or a grand total of P102,591.89 plus one (1) percent interest per month
until actually paid.

Regarding the bank's petition, NLRC Case No. SUB-RAB-01-04-7-0059-89, the Labor
Arbiter disposed of the same by holding that the strike staged by the Union was legal and
not in violation of any provision of the Labor Code. Hence, the dismissal of the petition.

In the third case, NLRC CASE NO. SUB-RAB-01-06-0097-89, the Labor Arbiter held
the bank accountable for the full backwages and other benefits due the Union members
who he found to have been constructively dismissed during the strike.
 Moreover, the Labor Arbiter, on the Union's claim for damages of not less than
P200,000.00, ruled that the award of P10,000.00 moral damages and P5,000.00
exemplary damages to each of the union member is in order.

The Labor Arbiter disposed thus:

WHEREFORE, with all the foregoing considerations, judgment is hereby rendered as

follows:

1. In the first case, we find complainant Ismael Tamayo, Sr. illegally and unjustly
dismissed and we hereby order the respondent Rural Bank of Alaminos, Inc. to pay him
as follows:

P 63,442.56 — Total full backwages /benefits

29,822.80 — Retirement pay
——————
P 93,265.36
9,326.53 — 10% Attorney's fees
——————
P102,591.89 — Total award as of December 31, 1989

plus one (1) percent interest per month until the award is actually paid.

2. In the second case, we find the strike legal and the Union having violated no provision
of the Labor Code, the complaint of the Rural Bank of Alaminos, Inc. is hereby dismissed
for lack of merit.

3. In the third case, we find the respondent Rural Bank of Alaminos, Inc. guilty of unfair
labor practice, whose act is tantamount to an illegal lockout amounting to a constructive
dismissal of the Union members, and we hereby order the bank to pay them their full
backwages other benefits for the nine (9) months period from April to December 1989
with the computations to include the wage increase under R.A. 6727 effective July 1,
1989.

The Bank is hereby ordered to re-open and accept/reinstate the striking union members
without loss of seniority rights and the union members are likewise ordered to return to
work and may now claim their respective 13th month pay for 1989. In case they are not
immediately reinstated, their full backwages shall not exceed a maximum of three (3)
years.

The respondent bank is further ordered to pay the Union members P10,000.00 as moral
damages and P5,000.00 as exemplary damages to each of the Union members, plus
attorney's fees and litigation expenses of ten (10) percent of the total awards.

The order of reinstatement or return to work is immediately executory hence the Bank is
commanded to reopen its banking business immediately.
 SO ORDERED.

Dissatisfied with the disposition of the Labor Arbiter, the Rural Bank of Alaminos, Inc. appealed
to the National Labor Relations Commission, which promulgated, on January 31, 1991 its
assailed Resolution setting aside the ruling of the Labor Arbiter and ordering the remand of all
the three cases to wit:

. . . In the broader interest of justice, We deem it best to remand all the afore-numbered
cases to Regional Arbitration Branch of origin for further proceedings.

WHEREFORE, premises considered, all the aforenumbered cases are hereby remanded
to the Regional Arbitration Branch of origin for further proceedings.

SO ORDERED.

The reversal by the respondent Commission of the Labor Arbiter's original Resolution prompted
petitioners to bring the present petition imputing grave abuse of discretion amounting to lack of
or excess jurisdiction to the respondent Commission, particularly describing the errors under
attack:

A. Case No. 0059-89:

Whether or not the respondent NLRC Third Division committed grave abuse of
discretion and exceeded its jurisdiction amounting to lack of jurisdiction in remanding the
case for further proceedings, in spite of its finding which affirmed the ruling of the Labor
Arbiter that the strike is legal and where the complaint is for a declaration of illegality of
the strike.

B. Case No. 0097-89:

Whether or not the respondent NLRC Third Division committed grave abuse of
discretion and exceeded its jurisdiction amounting to lack of jurisdiction in remanding the
case for further proceedings, despite the fact that the private respondent failed to appeal
the Labor Arbiter's finding that the respondent is guilty of unfair labor practice thus the
said issue not raised on appeal had become final.

Whether or not the respondent NLRC Third Division committed grave abuse of
discretion and exceeded its jurisdiction amounting to lack of jurisdiction in remanding the
case for further proceedings for the reason that it could not resolve the issues squarely
because it was at a loss as to the exact number of the bank's employees, but which is
contrary to the record of the case, as evidenced by the list of employees in private
respondent's Annex "A".

C. Case No. 0049-89:

 Whether or not respondent NLRC Third Division committed grave abuse of discretion
amounting to lack of jurisdiction where it ruled that private respondent was denied the
right to cross-examine petitioner Ismael Tamayo, in spite of the express mandate of
Article 221 of the Labor Code and the 90-day Rule under Executive Order No. 109 (1-23-
89)

D. In all three cases:

Whether or not the right of petitioners to speedy disposition of labor justice has been
violated in the remand of the cases for further proceedings and consequently, whether a
writ of prohibition shall lie.

Whether or not respondent NLRC Third Division committed grave abuse of discretion
amounting to lack of jurisdiction when it denied the motion for reconsideration for being
filed out of time, despite the fact that neither petitioner Ismael Tamayo, Sr. nor his
deceased counsel was furnished with a copy of the resolution, and likewise the copy for
the petitioner union was served to a stranger who is not an employee of the law office of
petitioner's counsel.

Respondent NLRC ordered the remand of all the three cases to the Labor Arbiter for further
proceedings: opining that with respect to NLRC Case No: 0049-89, respondent Bank should
have been given an opportunity to cross-examine the petitioner, Ismael Tamayo, Sr., as to the
veracity of the allegations contained in his unverified position paper, the lack or absence of
which amounted to a denial of due process. As regards, Case No. 097-89, the NLRC held that the
finding by the Labor Arbiter of an illegal lock-out was not substantiated by evidence, as it was
found out that no proof was ever adduced by the Union to show that the bank refused them
employment during the pendency of the strike, thus necessitating the remand of the case to the
Labor Arbiter for reception of evidence. So also, the NLRC ruled that a complete disposition of
the case could not be had since there was nothing in the record which indicates the number of
employees constructively dismissed by the respondent Bank.

Before delving into the merits of the case, it should be remembered that in the decision in the
case of St. Martin Funeral Homes vs. National Labor Relations Commission, G.R. No. 130866,
promulgated on September 16, 1998, this Court pronounced that petitions for certiorari relating
to NLRC decisions must be filed directly with the Court of Appeals, and labor cases pending
before this Court should be referred to the appellate court for proper disposition. However, in
cases where the Memoranda of both parties have been filed with this Court prior to the
promulgation of the St. Martin decision, the Court generally opts to take the case itself for its
final disposition.

With respect to the first assigned error, petitioners contend that it was an error for NLRC to
remand Case No. 0059-89 to the Labor Arbiter as the issue of legality of subject strike has been
resolved in favor of the Union by the Arbiter and the Commission.

There is merit in petitioners' contention. NLRC Case No. 0059-89 was filed by the respondent
Bank against the Union, for declaration of illegality of the strike, unfair labor practice and
damages. In the proceedings below, the Labor Arbiter found that the strike conducted by the
Union was legal and complied with all the requirements of law. Such finding was, in fact,
affirmed by the NLRC in the following Resolution, to wit:

. . . It appears that the Union filed its notice of strike on March 3, 1989 and that it
commenced its strike thirty (30) days thereafter, or on April 3, 1989.

Obviously, the Union had duly observed the mandatory cooling-off period such that the
strike it eventually undertook complied with what is required by the Labor Code. Hence,
Our finding that the strike is legal.

It is well-settled that when findings of fact by the labor arbiter are sufficiently supported by the
evidence on record, the same must be accorded due respect by this Court. 1 More so when such
findings by the Labor are affirmed by the NLRC on appeal. Since the NLRC found the strike
conducted by the Union legal, the Court finds no justifiable reason for the Commission to
remand Case No. 0059-89 to the Labor Arbiter for further proceedings. The allegation of unfair
labor practice and the claim for damages proceed from and are consequences of the strike, the
findings of which are based on the legality or illegality thereof. The strike thus being adjudged as
legal, the charges of unfair labor practice and damages are thereby negated and bereft of any
basis. Therefore, the NLRC gravely abused its discretion when it ordered the remand of NLRC
Case No. 0059-89 to the Labor Arbiter for further proceedings.

Anent the second assigned error which pertains to NLRC Case No. 0097-89, the case instituted
by the Union against the respondent Bank for unfair labor practice with damages, the Court
believes, and so holds, that the remand of said case was in order.

NLRC Case No. 0097-89 charged RBAI with unfair labor practice and the Labor Arbiter
concluded that the Bank employed all available means to further delay the resolution of the
dispute, thus creating a scenario of an illegal lock-out.

A "lock-out" means the temporary refusal of an employer to furnish work as a result of an

industrial or labor dispute. 2 As correctly found by the NLRC, in the case under consideration
evidence of illegal lock-out is wanting such that there can be no conclusive determination by the
NLRC as to the charge. Petitioners failed to present sufficient proof to support the allegation of
illegal lock-out. No evidence was adduced by the Union to show that the Bank really refused
them employment during the pendency of the strike. As to the allegation that the Bank was
interfering with and restraining the employees in the exercise of their right to self-organization,
suffice it to state that filing a petition for cancellation of the Union's registration is not per se an
act of unfair labor practice. It must be shown by substantial evidence that the filing of the
petition for cancellation of union registration by the employer was aimed to oppress the Union.
Consequently, the NLRC was right in ordering the remand of Case No. 0097-89 for further
proceedings.

Anent the observation of NLRC that it was at a loss as to the exact number of employees who
were constructively dismissed by the Bank, such claim is belied by the records clearly indicating
that in its Complaint in NLRC Case. 0059-89, petitioner Union did attach a letter addressed to
the respondent Bank containing a list of the bank's employees together with their length of
service and monthly basic salary. 3 Respondent avers that since the said list was presented in
evidence in Case No. 0059-89, the same could not be considered as evidence in Case No. 0097-
89 because these two cases are separate and distinct from each other.

The contention is untenable. It must be recalled that Case No. 0097-89 was filed in the nature of
a countercharge to Case No. 0059-89 by the petitioner Union against respondent Bank. Besides,
all the three cases were consolidated before the Labor Arbiter because of the identity of the
parties. Thus, the list, although introduced in Case No. 0059-89, could likewise be properly
considered as evidence in Case No. 0097-89. As held by this Court, proceedings before a labor
arbiter are non-litigious in nature in which, subject to the requirements of due process, the
technicalities of law and procedure and the rules obtaining in courts of law do not strictly apply. 4

Petitioners' stance that the finding of unfair labor practice already became final as the issue was
not raised on appeal, is untenable. The first, fourth and fifth issues raised by the Bank in its
Appeal Memorandum filed with the NLRC on December 24, 1989 theorized that:

1. The Labor Arbiter gravely abused his discretion in holding that appellant violated its
duty to bargain collectively.

xxx xxx xxx

4. The Labor Arbiter gravely abused his discretion in holding that appellant is guilty of
illegal lock-out.

5. The Labor Arbiter gravely abused his discretion in holding that appellant illegally
dismissed its employees.

xxx xxx xxx 5

Although the issue was not collectively appealed as unfair labor practice, the first, fourth and
fifth issues relate to acts which by themselves constitute unfair labor practice.

As regards the third assigned error, petitioners maintain that the NLRC acted with grave abuse of
discretion in remanding NLRC Case No. 0049-89 for further proceedings because the Labor
Arbiter denied respondent Bank's right to cross-examine petitioner Ismael Tamayo, Sr.
Respondent NLRC, on the other hand, ruled that the Labor Arbiter should have granted
respondent Bank the right to cross-examine the said petitioner on the veracity of the allegations
in his unverified position paper, and it was grave abuse of discretion not to allow respondent
Bank to cross-examine petitioner Tamayo.

In a long line of cases, this Court has held that the holding of a trial is discretionary on the part of
the Labor Arbiter, and it cannot be demanded as a matter of right by the parties 6. The absence of
a formal hearing or trial before the Labor Arbiter is no cause for a party to impute grave abuse of
discretion. 7 The submission of position papers and memoranda in labor cases satisfies the
requirements of due process, and a decision rendered on the basis of the position papers which
were found to be sufficient, meets the requirements of a fair and open hearing. 8 Thus, in the case
under scrutiny, the Labor Arbiter did not act with grave abuse his discretion in not conducting a
formal hearing or trial and in basing his decision solely on the position papers submitted by the
parties. The fact that the position paper submitted by petitioner Tamayo was not verified is of no
moment. Succinct and clear is the ruling of this Court that the lack of a verification of a position
paper is only a formal and not a jurisdictional defect. 9 It is not fatal and could be easily corrected
by requiring an oath. 10

Petitioner Tamayo faults respondent NLRC for denying his motion for reconsideration for the
reason that it was filed out of time. He contends that neither he nor his deceased former counsel,
Atty. de Vera was furnished a copy of the NLRC's resolution.

Petitioner's allegation is not meritorious. It is axiomatic that notice to counsel is notice to parties
and when a party is represented by the counsel, notices should be made upon the counsel of
record at his given address, to which notices of all kinds emanating from the court should be
sent. 11 In the appeal before the respondent Commission, it was Atty. Toefilo Humilde who
entered appearance in behalf of the Union and petitioner Tamayo. It was thus reasonable for the
NLRC to send a copy of the NLRC Resolution to the said lawyer. Since the said resolution was
received by counsel on February 26, 1991 and the motion for reconsideration was filed only on
March 13, 1991, the denial by the NLRC was in order, the ten-day period for filing a motion for
reconsideration having lapsed.

WHEREFORE, the petition is partly GRANTED in that the Order of the NLRC remanding
NLRC Cases No. 0049-89 and No. 0059-89 to the Labor Arbiter is SET ASIDE but, the Order
remanding NLRC Case No. 0097-89 to said Labor Arbiter for further proceedings, is UPHELD.
No pronouncement as to costs.

SO ORDERED.

Melo, Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.

Footnotes
1 CDCP Tollways Operation Employees and Workers Union vs. National Labor Relations Commission, 211 SCRA 58, 63.
2 Art. 212, (p) Labor Code of the Philippines.
3 Rollo, pp. 27-28, 34.
4 Shoemart, Inc. vs. National Labor Relations Commission, 225 SCRA 311.
5 Rollo, p. 118.
6 Pacific Timber Export Corp. vs. NLRC, 224 SCRA 860; Commando Security Agency vs. NLRC, 211 SCRA 645; National Federation of Labor vs. NLRC, 283
SCRA 275; Llora Motors, Inc. vs. Hon. Franklin Drilon, G.R. No. 82895, November 7, 1989, 179 SCRA 175.
7 PMI Colleges vs. NLRC, 277 SCRA 462.
8 St. Mary's College (Tagum, Davao) vs. NLRC, 181 SCRA 62.
9 Pampanga Sugar Develoment Co., Inc. vs. NLRC, 272 SCRA 737, G and P Manpower Services vs. NLRC, 208 SCRA 166.
10 Murillo vs. Sun Valley Realty, Inc., G.R. No. 67272, June 30, 1988, 163 SCRA 271.
11 UERM Employees Union — FFW vs. Ministry of Labor, G.R. No. 75838, Aug. 31, 1989; 177 SCRA 165 NIA Consult, Inc. V. NLRC, 266 SCRA 17.