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350 Phil. 380
FIRST DIVISION
[ G.R. No. 117610, March 02, 1998 ]
KATHY-O ENTERPRISES,
PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER NIEVES DE
CASTRO AND ERNESTO C. ARUTA, RESPONDENTS.
D E C I S I O N
DAVIDE, JR., J.:
This special
civil action for certiorari and prohibition with preliminary injunction
seeks the nullification of the 23 August 1994[1] order of public respondent National
Labor Relations Commission (NLRC) in NLRC NCR CA No. 006621-94 dismissing the
appeal of petitioner Kathy-O Enterprises (hereafter KATHY-O) from the 20
December 1993[2] order of public respondent Labor Arbiter Nieves V. De Castro in NLRC
NCR Case No. 00-12-06646-91 granting the motion for execution of judgment filed
by respondent Ernesto Aruta (hereafter ARUTA), and the NLRC resolution of 14
October 1994[3] denying the motion for
reconsideration of the 23 August 1994 order.
Petitioner
KATHY-O, a sole proprietorship, owned and operated by Mrs. Arlene Estrella,
employed respondent ARUTA in its garment factory on 1 March 1984 as a pattern maker and the operations
manager. ARUTA’s responsibilities included purchasing
materials, preparing patterns and delivering garments to Shoe Mart (hereafter
SM) department stores.
On 6 March 1991,
SM returned KATHY-O’s garments due to defects in material, wrong style and poor workmanship. To prevent further losses, Estrella advised
ARUTA to undertake corrective measures to improve KATHY-O’s operations. However, the flaws in KATHY-O’s operations
remained as the volume of merchandise returned for the period of March until
October 1991 continued to increase, costing KATHY-O an alleged total loss of P463,
085.00.
In October 1991,
ARUTA asked for a raise. However,
Estrella deferred his request until the company’s situation improved.
ARUTA then
applied for a vacation leave effective October 7 to 30 1991. But as Estrella badly needed ARUTA’s
services for the forthcoming holiday season, she denied the application and pleaded that ARUTA right the
inefficiencies in KATHY-O’s operations. However, ARUTA absented himself from work without Estrella’s approval.
On 9 October
1991, KATHY-O hired a new pattern maker in order to comply with its commitments
and the exigencies of work brought about by ARUTA’s absence.
In November
1991, when ARUTA reported for work, Estrella directed him to take the night
shift as she was still trying to adjust to the new pattern maker. Aruta insisted that he work the day shift,
but Estrella did not accede. Resentful,
ARUTA did not report for work that month.
Perceiving the
hiring of another pattern maker in his stead and his transfer to the night
shift as a dismissal, on 2 December 1991, ARUTA filed an illegal dismissal case against KATHY-O. In the proceedings before the Labor
Arbiter, Aruta alleged that he was denied due process as he was dismissed
without valid cause, written notice of termination nor investigation.[4]
On 30 July 1992,
public respondent Labor Arbiter Nieves de Castro rendered a decision[5] dismissing the charge of illegal
dismissal for lack of merit, and as to ARUTA, found him guilty of absence
without approved leave and defiance of a lawful and reasonable order, acts
inimical to the interest of KATHY-O. The Labor Arbiter ruled that ARUTA’s conduct could not be left
unpunished, otherwise he would set a “bad example and/or precedent” and that
“[o]ne year and 8 months’ suspension [from service would] certainly teach [him]
his lesson not to defy a lawful and reasonable order of the employer and not
absent himself without approved leave for no justifiable reason at all.” Nevertheless, the Labor Arbiter ordered
KATHY-O to reinstate ARUTA to his former position effective 1 September 1992.
The dispositive
portion of the Order reads as follows:
WHEREFORE, the charge of illegal termination is hereby DISMISSED for lack of merit.
Respondent is hereby directed to reinstate complainant to his former [position] as Operation’s [sic] Manager and Pattern Maker effective September 1, 1992 with warning that a repetition of similar misconduct shall be dealt with more severely.
Neither party
appealed from the decision.
Come 1 September
1992, however, ARUTA did not report back for work at KATHY-O. It was only sometime in March 1993, or after
a period of more than six months, that
ARUTA and his counsel informed KATHY-O of his desire to be reinstated or that
he be paid separation pay and back wages. However, KATHY-O rejected both options.
On 4 May 1993,
ARUTA moved[6] to execute the 30 July 1992
decision as regards his reinstatement. KATHY-O opposed,[7] contending that ARUTA had already
been replaced and invoking laches.
In its Order of
20 December 1993, the Labor Arbiter granted ARUTA’s motion on the ground that
the decision had become final and executory.
On 7 February
1994, KATHY-O filed its Notice of Appeal[8] and submitted a Memorandum on Appeal.[9] The appeal was docketed as NLRC NCR
CA No. 006621-94 and assigned to the Second Division of the National Labor
Relations Commission (NLRC).
On 26 August
1994, the NLRC denied KATHY-O’s appeal for having been filed out of time,
finding that the latter received a copy of the 20 December 1993 order on 25
January 1994 as shown in the “Notice of Resolution/Order,” and not on 28
January 1994 as claimed by KATHY-O; hence, it had only until 4 February 1994
within which to file its appeal. In its
Order of 14 October 1994,[10] the NLRC denied KATHY-O’s motion
for reconsideration for lack of merit. In said motion, KATHY-O’s counsel alleged that he was of the belief that
his office received the order in question on 28 January 1994 “as the date appearing
on the office stamp showing receipt of the Order was written by the receiving
clerk in such a way that the figure ‘5’ would easily be mistaken as ‘8’.”[11]
Unsatisfied,
KATHY-O instituted this petition alleging that:
1. RESPONDENT NATIONAL LABOR RELATIONS COMMISSION GRAVELY
ABUSED ITS DISCRETION WHEN IT DISMISSED PETITIONER’S APPEAL ON A MERE
TECHNICALITY ALTHOUGH THE APPEAL ITSELF IS CLEARLY MERITORIOUS;
2. RESPONDENT
COMMISSION SERIOUSLY ABUSED ITS DISCRETION WHEN IT FAILED TO CONSIDER THAT THE
SLIGHT DELAY IN THE FILING OF THE APPEAL WAS DUE TO AN EXCUSABLE AND HONEST
MISTAKE, WHICH CANNOT OVERRIDE AN OTHERWISE MERITORIOUS APPEAL;
3. RESPONDENT
LABOR ARBITER GRAVELY ABUSED HER DISCRETION WHEN SHE ORDERED THE ISSUANCE OF
[A] WRIT OF EXECUTION DESPITE SUPERVENING EVENTS ATTRIBUTED [sic] TO RESPONDENT
ARUTA HIMSELF WHICH RENDERED HIS REINSTATEMENT IMPRACTICABLE WITHOUT UNDUE
DAMAGE OR INJURY TO PETITIONER AND ITS EMPLOYEES.
KATHY-O concedes
that strict adherence to the Notice of Resolution/Order relied upon by the NLRC
would lead one to conclude that KATHY-O received the 20 December 1993 order on
25 January 1994, thus its appeal filed only on 7 February 1994 was indeed filed
late. Nevertheless, petitioner reiterates
its explanation that it committed an honest mistake when “it mistook the
figure ‘5’ written on the Notice of
Resolution (Annex ‘J’) by the office receptionist as ‘8’ because of an extra
stroke.” Petitioner thus pleads for
relaxation of the rule on the application of the reglementary periods of appeal
and that the appeal be decided on the merits, not dismissed on a mere
technicality.
KATHY-O further
avers that there is ostensible merit in its appeal for while the main decision
ordering ARUTA’s reinstatement had become final, supervening causes or reasons arose which rendered execution “no
longer possible without undue damage;” ARUTA’s reinstatement would have
impaired its operations and “the tenure and standing of the other employees
who, unlike [ARUTA], had remained faithful and responsible in the performance
of their assigned tasks;” moreover,
KATHY-O argues, ARUTA had abandoned his right and was guilty of laches.
In his comment
to the petition, ARUTA asks the Court
to dismiss the petition for lack of
merit; asserts that KATHY-O’s appeal
from the Labor Arbiter’s order was filed after the lapse of ten days from
receipt thereof and stresses that KATHY-O’s failure to send a notice signifying
its intention to accept him could not prejudice his reinstatement.
In its comment
to the petition, the Office of the Solicitor General (hereafter OSG) contends that the petition is impressed with
merit. While admitting that KATHY-O’s
appeal was filed late, i.e., 3 days beyond the 10-day reglementary
period provided in the Labor Code, KATHY-O’s counsel committed an honest
mistake in misreading the figure “5” in 25 January 1994 as an “8” because of an “extra upward
stroke.” Additionally, the OSG agrees
with KATHY-O that the appeal raised valid issues and should not have been
dismissed on technical grounds.
In its comment
on the petition (which this Court required in view of the stand of the OSG),
the NLRC maintains that it committed no abuse of discretion when it ordered
execution of the 30 July 1992 decision,
the same having long become final and executory; and asks for affirmance of its
challenged orders on the ground that the appeal was not filed within the
reglementary period.
Well settled is
the principle that the perfection of an appeal within the statutory or
reglementary period is not only mandatory, but jurisdictional, and failure to do so renders the questioned
decision final and executory and deprives the appellate court of jurisdiction
to alter the final judgment much less to entertain the appeal.[12] The underlying purpose of this
principle is to prevent needless delay,
a circumstance which would allow the employer to wear out the efforts and
meager resources of the worker to the point that the latter is constrained to
settle for less than what is due him.[13]
Article 223 of
the Labor Code, the governing law on the timeliness of an appeal from the
decisions, awards or orders of the Labor Arbiter, is explicit that the
aggrieved party has 10 calendar days from receipt thereof to appeal to the
Commission. In the instant case, the
records show that KATHY-O’s counsel actually received a copy of the challenged
Labor Arbiter’s order on 25 January 1994, thus pursuant to Article 223 of the
Labor Code, KATHY-O had only until 4 February 1994, the 10th calendar day from 25 January 1994, within which to appeal
therefrom. As the appeal was filed only
on 7 February 1994, plainly, KATHY-O’s appeal was filed three days late.
We are not
unaware of decisions of this Court allowing tardy appeals in judicious cases, e.g.,
in Reyes v. Court of Appeals,[14] where the presence of any
justifying circumstance recognized by law, such as fraud, accident, mistake or
excusable negligence, properly vested the judge with discretion to approve or
admit an appeal filed out of time; or in Ramos v. Bagasao,[15] where on equitable grounds, a
belated appeal was allowed as the questioned decision was served directly upon
petitioner Ramos instead of her counsel of record who at the time was already
dead. While in Rama v. Court of
Appeals,[16] the rule was relaxed to obtain a
complete and equitable resolution of the rights and obligations of the parties;
likewise in PNB v. Court of Appeals,[17] to arrive at a just and equitable
determination of the controversy and considering the appeal was impressed with
merit.
When proper, no
serious impediment bars the allowance of tardy appeals under the Rules of
Court, in recognition of this Court’s inherent power to suspend adjective
rules. It is a different matter,
however, when the period to appeal is provided by statute, as in labor
cases. For obvious reasons, this Court
cannot ordinarily suspend the statute’s operation. Article 223 of the Labor Code expressly provides that:
“[d]ecisions, awards, or orders of the Labor Arbiter are final and executory unless
appealed to the Commission by any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders.” While Section 1 of Rule VI of the New Rules of Procedure of the
National Labor Relations Commission provides that “[I]f the 10th … day … falls on a Saturday, Sunday
or a holiday, the last day to perfect the appeal shall be the next working
day.” Nevertheless, if only to be able
to dispense substantial justice, strict observance of the period to appeal may
not be exacted. Thus, in Firestone
Tire and Rubber Co. of the Philippines v. Lariosa,[18] an appeal in a labor dispute was
given due course despite the lapse of fourteen (14) days from notice of the
decision, due to the fact that the Notice of Decision received by Lariosa’s
lawyer advised the parties that the appeal could be taken to the NLRC within
ten (10) “working” days – not calendar days – from notice of the decision. For the same reason was the appeal in Chong
Guan Trading v. NLRC[19] allowed. While in City Fair Corporation v. NLRC,[20] we ruled that the NLRC did not
commit grave abuse of discretion when it entertained an appeal filed one (1)
day late considering that the “facts and circumstances of the case warrant
liberality considering the amount and the issue involved.”
In this case, we
find the reason for the 3-day delay justifiable, having been caused by
inadvertence amounting to excusable negligence. Due to the presence of an upward stroke, the 5 in 25
January appeared to be and could have been mistaken as an “8,” thus leading
counsel for KATHY-O to misread 25 January, the date of receipt stamped by his
receiving clerk on the copy of the decision intended for said counsel, as 28
January. We agree then with the
Solicitor General that the error was an honest mistake and may be excused.
It thus follows
that the NLRC should be directed to decide the appeal on its merits. However, a remand of this case to the NLRC
would only further delay its termination. The issue on appeal is simple, i.e., whether or not the Labor
Arbiter committed any error in granting execution pending appeal. The records before us are complete and
readily suggest an answer in the negative. The decision of the Labor Arbiter of 30 July 1992 directed KATHY-O to
reinstate ARUTA on 1 September 1992. ARUTA had, therefore, five (5) years within which to secure execution of
judgment pursuant to Section 1 of Rule VIII of the New Rules of Procedures of
the NLRC. Clearly, the Labor Arbiter
acted correctly in granting the motion for execution filed six months after
ARUTA was to be reinstated, according to the decision.
As regards the
supervening events interposed by KATHY-O, which would have prevented execution,
the same were not duly proven. Nevertheless, it was established that ARUTA and his counsel informed
KATHY-O on 1 March 1993 of his intention to be reinstated or in lieu thereof,
his willingness to be paid separation pay with back wages. Under the circumstances here, reinstatement
would be impractical and hardly promotive of the best interests of the
parties. The resentment and enmity
between ARUTA and KATHY-O which culminated in and was compounded by the illegal
dismissal suit (NCR Case No. 00-12-06646-91), necessarily strained the
relationship between them or even provoked antipathy and antagonism. We have ruled that separation pay can be
awarded in lieu of reinstatement if reinstatement can no longer be had, as when
the position previously held by the employee no longer exists or when there is
strained relations as a result of loss of trust and confidence.[21]
Accordingly, we
rule that in lieu of reinstatement, ARUTA should instead be given separation
pay at the rate of one month pay for every year of service, with a fraction of
at least six months of service considered as one year of service, computed from
the time he was first employed until he shall be paid the separation pay due
him.
WHEREFORE, the instant petition is GRANTED IN PART. The challenged order of 23 August 1994 and
resolution of 14 October 1994 of public respondent National Labor Relations
Commission in NLRC NCR CA No. 006621-94 are set aside, and the Order of 20
December 1993 of Labor Arbiter Nieves V. De Castro in NLRC NCR Case No.
00-12-06646-91 is modified, and as modified, petitioner KATHY-O Enterprises is
hereby ORDERED to pay separation pay to respondent ERNESTO C. ARUTA at the rate
of one (1) month pay for every year of service, with a fraction of at least six
(6) months of service considered as one (1) year of service, computed from the
time he was first employed until he is paid the separation pay.
No pronouncement
as to costs.
SO ORDERED.
[1] Annex
“B,” of Petition; Rollo 33-35.
Per Presiding Commissioner Victoriano R. Calaycay, with Commissioner Rogelio I.
Rayala, concurring.
[2]Id., 31.
[3] Annex
“C,” Rollo, 36.
[4]Rollo, 46.
[5] Annex
“D,” of Petition; Rollo, 38-49.
[6] Annex “F”
of Petition; Rollo, 51- 52.
[7] Annex “G”
of Petition; Id., 53- 56.
[8] Annex “
K” of Petition; Id., 72.
[9] Annex “
K-1” of Petition; Id., 73- 82.
[10] Annex “B”
of Petition; Id., 32-35.
[11] Annex “L”
of Petition, Rollo, 83-84.
[12] Chong
Guan Trading v. NLRC, 172 SCRA 831, 839 [1989]; Imperial Textile Mills,
Inc. v. NLRC, 217 SCRA 237, 246 [1993]; Asuncion v. NLRC, G.R. No. 109311, 17 June 1997.
[13] Italian
Village Restaurant v. NLRC, 207 SCRA 204, 208 [1992].
[14] 74 Phil.
235, 237-238 [1943], citing Bustamante v. Tirona, No. 48813, 1 Off.
Gaz., 875.
[15] 96 SCRA
395, 397 [1980].
[16] 148 SCRA
496, 504 [1987].
[17] 246 SCRA
304,316-319 [1995], citing Republic v. Court of Appeals, 83 SCRA 453
[1978]; Siguenza v. Court of Appeals, 137 SCRA 570 [1985]; Pacific Asia
Shipping Corporation v. NLRC, 161 SCRA 122 [1988]; Cortes v.
Court of Appeals, 161 SCRA 444 [1988]; Olacao v. NLRC, 177 SCRA 38
[1989]; Legasto v. Court of Appeals, 172 SCRA 722 [1989]; City Fair
Corporation v. NLRC, G.R. No. 95711, 21 April 1995.
[18] 148 SCRA
187, 190 [1987].
[19] 172 SCRA
831, 839 [1989].
[20] 243 SCRA
572, 576 [1995].
[21]
Globe-Mackay Cable and Radio Corp.v. NLRC, 206 SCRA 701 [1992].