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540 Phil. 172


[ G.R. NO. 166177, December 18, 2006 ]




This case is a Petition for Review under Rule 45 of the 1997 Revised Rules of Civil Procedure seeking to set aside the Court of Appeals Decision,[1] dated 31 August 2004, in CA-G.R. SP No. 73421 entitled, Herbert Williams v. National Labor Relations Commission (2nd Division), and Days Hotel Philippines Inc., Omnisource Management Inc., and Reynaldo Concepcion and its Resolution,[2] dated 23 November 2004, which annulled the Decision and Resolution of the National Labor Relations Commission (NLRC), dated 26 March 2002[3] and 30 May 2002,[4] respectively, thereby reinstating with modification the Labor Arbiter's Decision,[5] dated 1 June 2001 as to the amount of backwages awarded to herein petitioner.

The antecedent facts of the case are as follows:

Herein petitioner Herbert Williams is an Indian national and an experienced hotelier with 25 years of extensive working knowledge of hotel and restaurant management in senior positions. He was enticed by private respondent Reynaldo Concepcion (Concepcion) into joining Days Hotel Philippines Inc., as Executive Vice-President and Chief Operating Officer (EVP-COO). He worked as such from 24 May 1999 up to the time of his dismissal on 21 September 1999.

Herein respondents are Days Hotel Philippines, Inc. (Days Hotel), a domestic corporation engaged in hotel business; Omnisource Management, Inc. (Omnisource), likewise a domestic corporation, which operates the chain of hotels of respondent Days Hotel; and Concepcion, the chairperson of the board of directors of both corporations.

Petitioner was summoned to the office of respondent Concepcion on 7 September 1999, and allegedly verbally dismissed by the latter in the presence of Lettie Delarmente (Delarmente), respondent corporations' Vice-President for Human Resources, and Matthew Reeves, Sales and Marketing Manager, for having purportedly uttered derogatory remarks against the person of respondent Concepcion. Petitioner claimed that respondent Concepcion screamed at him and told him to "get out," "you're fired," "I don't need you anymore," and afterwards slammed the door.[6]

On 8 September 1999, petitioner received a letter[7] from Delarmente asking, on behalf of the Board of Directors of respondent Days Hotel, for an explanation within 48 hours why he should not be given disciplinary action. Said letter also informed him of his preventive suspension. Petitioner sent a reply to the said letter on 10 September 1999.

On 17 September 1999, a notice[8] of termination of employment on the ground of loss of trust and confidence was issued to petitioner. Petitioner's termination of employment was made effective on 21 September 1999.

Consequently, on 11 November 1999, petitioner lodged with the Labor Arbiter a Complaint for Illegal Dismissal and Non-Payment of Benefits with Claim for Moral and Exemplary Damages and Attorney's Fee against herein respondents.

As a defense against the Complaint filed by petitioner, respondents asserted that the dismissal of the petitioner was due to a valid cause, i.e., loss of trust and confidence. They contended that contrary to company policy, petitioner meddled in the negotiation process with a prospective client, a function that lies exclusively with respondent Concepcion as Chairperson and Chief Executive Officer; that petitioner even uttered unpleasant comments against respondent Concepcion; and that during petitioner's stint with Days Hotel, he was not able to contribute any significant improvement to the operation of their hotels.

On 1 June 2001, Labor Arbiter Isabel G. Panganiban-Ortiguerra rendered a Decision in favor of herein petitioner. The decretal portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring respondent Days Hotel Inc., Omnisource Management Inc., and Reynaldo A. Concepcion guilty of illegal dismissal, and they are hereby ordered as follows:
  1. To pay [petitioner] backwages reckoned from his dismissal up to the date of this [D]ecision in the amount of P2,033,000.00;
  2. To pay [petitioner] separation pay in an amount equivalent to one half month pay for every year of service reckoned from the time he was employed up to the time he will actually be paid his separation pay in accordance with the doctrine of imputed service, which as of this date is in the amount of P100,000.00;
  3. To pay money claims of [petitioner] in the amount of P751,286.00;
  4. To pay moral and exemplary damages in the amount of P500,000.00; and
  5. To pay [petitioner] attorney's fee in an amount equivalent to 10% of whatever he may receive by virtue of this [D]ecision.[9]
Respondents appealed the Labor Arbiter's Decision to the NLRC. On 26 March 2002, the NLRC reversed the aforesaid Decision and sustained the dismissal of petitioner. The dispositive portion thereof reads as follows:
WHEREFORE, all the foregoing duly considered, the decision appealed from is hereby REVERSED and SET ASIDE and a new one entered DISMISSING the [C]omplaint for lack of merit.[10]
The NLRC ratiocinated:
To begin with, there has been no denial emanating from the [petitioner] as to the utterances made by him to third persons concerning the management style, i.e. work habits or decision making processes of [respondent] Mr. Reynaldo Concepcion. All that is heard from him is that his statements were without malice and taken out of context.

x x x x

Thus, with the bare answer of the [petitioner] to the charges, there was no need to secure and present the affidavits of either [respondent] Mr. Concepcion or Mr. Matthew Reeves, the latter being the person whom the [petitioner] dissuaded from joining the companies headed by [respondent] Mr. Concepcion.
x x x x

x x x. We can conceive of no justifiable reason why the [petitioner] should utter the remarks attributed to him to [sic] Ms. Cristy Bollos, President of Maria Plaza Suites and with whom the respondents were negotiating. By his actuation, [petitioner] has recklessly placed in disrepute the character and person of [respondent] Mr. Reynaldo Concepcion. x x x. By making known to other persons his misgivings about his immediate superior, [petitioner] has acted in a manner contrary to and inimical to the best interests of the hotel. Hence, it is Our view that the respondents were justified in discontinuing the services of the [petitioner].[11]
On 10 May 2002, petitioner filed a Motion for Reconsideration of the afore-quoted Decision. On 30 May 2002, the NLRC issued a Resolution denying petitioner's Motion for Reconsideration.

Petitioner filed a Petition for Certiorari before the Court of Appeals on 18 October 2002. On 31 August 2004, the appellate court rendered a Decision reinstating the Labor Arbiter's Decision declaring that petitioner has been illegally dismissed but modifying the same by limiting the award of backwages to P50,000.00, and separation/termination pay to a fixed amount of P100,000.00. The decretal portion of said Decision states that:
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the NLRC are ANNULED. The Labor Arbiter's Decision is hereby REINSTATED with MODIFICATION as follows:
(a). The award of backwages in the amount of P2,033,000.00 is DELETED and in lieu thereof, petitioner should be paid his unpaid salary in the amount of P50,000.00;

(b). The separation/termination pay payable to petitioner shall be in the fixed amount of P100,000.000 pursuant to the employment contract;

(c). The monetary value of petitioner's vacation, sick and rest/recreation leave benefits embedded in his money claims is DELETED.

All other orders of the Labor Arbiter stand.[12]
On 22 September 2004, petitioner filed a partial Motion for Reconsideration of the aforesaid Decision. Respondents also filed a Motion for Reconsideration of the said Decision. Nevertheless, the Court of Appeals denied both Motions in its Resolution, dated 23 November 2004.

Hence, this Petition.

Petitioner argues that the Court of Appeals erred in not giving him, in full, the claims awarded to him as stated in the Decision of the Labor Arbiter. Citing the case of Gelmart Industries (Phils.), Inc., v. Leogardo,[13] petitioner asserts that in determining the facts of the case and its merits and demerits, it is the Labor Arbiter who has the discretion to determine which party deserves credence on the basis of the evidence received. He further contends that the Court of Appeals discloses no justifiable reason, either based upon facts, or legal points, to reduce the awards granted by the Labor Arbiter. He avers that the Court of Appeals only justifies such reduction of award by the phrase "stipulations constitute the law of the contract," not taking into consideration that the subject matter of the case is an employment contract, which, by operation of law is deemed to include all labor provisions which are advantageous to the employee.

However, on 14 February 2005, this Court's Third Division, acting on the separate Petition for Review filed by herein respondents docketed, as G.R. No. 166178, entitled, Days Hotel Philippines, Inc., Omnisource Management, Inc., and Reynaldo Concepcion v. Herbert Williams, had rendered a Resolution[14] denying such Petition. The arguments raised therein by herein respondents are: (1) the petitioner was dismissed for just cause and it was done with due compliance to the requirements of due process, hence, the dismissal was legal; and (2) since the dismissal was legal, respondents cannot be held liable for the petitioner's alleged unpaid salary, termination pay, as well as claims for damages. Nonetheless, this Court's Third Division agrees in the findings of the Court of Appeals that, indeed, herein petitioner has been illegally dismissed. Furthermore, it also ruled on the amount of backwages and separation/termination pay that should be awarded to herein petitioner, to wit:
As correctly ruled by the appellate court, [petitioner] Williams is entitled only to an amount corresponding to his unpaid earned salary in the amount of P50,000.00 and separation/termination pay in the fixed amount of P100,000.00 pursuant to the parties' contract of employment.[15]
From the aforesaid Resolution, respondents and petitioner separately filed their Motions for Reconsideration but both motions were denied with finality by the Third Division in a Resolution dated 20 April 2005.[16]

In view of the Resolutions dated 14 February 2005 and 20 April 2005, issued by the Third Division of this Court in G.R. No. 166178, the issue presented by the petitioner in the present case has already been resolved. Considering that the Motions for Reconsideration of the Resolution dated 14 February 2005 filed by both parties had been denied with finality, thus, the said Resolution becomes final and executory and, therefore, also binding on this Division. The principle of res judicata is applicable herein.

Res judicata literally means, "a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment." Res judicata lays the rule that an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit.[17]

The elements of res judicata are: (1) there is a final judgment or order; (2) the court rendering it has jurisdiction over the subject matter and the parties; (3) the judgment or order is on the merits; and (4) there is between the two cases identity of parties, subject matter and causes of action.[18]

This Court holds that the Resolution of this Court's Third Division dated 14 February 2005 in G.R. No. 166178 is a final judgment on the merits rendered by a court having jurisdiction over the subject matter and the parties. Moreover, the parties involve in the two cases, to wit: G.R. No. 166177, which is the case under consideration, and G.R. No. 166178 are identical, and this can be gleaned from the title of these two cases, i.e., the former is Herbert Williams v. Days Hotel Philippines, Inc., Omnisource Management, Inc., and Reynaldo Concepcion, while the latter is Days Hotel Philippines, Inc., Omnisource Management, Inc., and Reynaldo Concepcion v. Herbert Williams. There is no doubt that the above-mentioned cases involve exactly the same parties in the same capacity as employers and employee. Hence, the requisite of identity of parties is clearly established.

The two cases likewise involve the same subject matter and causes of action as they arise from the same set of facts, which is the dismissal from employment of herein petitioner that has been declared illegal by the Labor Arbiter and affirmed by the Court of Appeals, as well as the modification of the awards of backwages and monetary claims to herein petitioner by the Court of Appeals. Thus, the said Resolution dated 14 February 2005, rendered by this Court's Third Division is a bar to the continuation of the present Petition filed before Us.

Additionally, on 29 June 2005, herein petitioner already filed a Motion for Execution[19] of the Resolution of this Court's Third Division, dated 14 February 2005, praying for the issuance of a writ of execution for the enforcement of the said Resolution in his favor. He stated in the aforesaid Motion for Execution that:
6. The respondent's (sic) [P]etition for [R]eview on [C]ertiorari filed with the Supreme Court has been dismissed with the denial of respondent's (sic) [M]otion for [R]econsideration in a [R]esolution dated 20 April 2005. x x x.

7. The [D]ecision of the Court of Appeals affirming the [Labor] Arbiter's [D]ecision with modification has become final and executory;[20]
In so doing, this Court regards such act of the petitioner as an express relinquishment of his right to proceed with this Petition. Thus, petitioner is already estopped from pursuing his claim that the awards granted in his favor by the Labor Arbiter be affirmed in full.

WHEREFORE, premises considered, the Petition is hereby DENIED. Following the Resolution of this Court's Third Division, dated 14 February 2005, in G.R. No. 166178, the Decision and Resolution of the Court of Appeals dated 31 August 2004 and 23 November 2004, respectively, are hereby AFFIRMED.


Ynares-Santiago, (Chairperson), Austria-Martinez, and Callejo, Sr., JJ., concur.

* Retired as of 7 December 2006.

[1] Penned by Associate Justice Ruben T. Reyes with Associate Justices Perlita J. Tria Tirona and Jose C. Reyes, Jr., concurring; rollo, pp. 34-48.

[2] Id. at 50-51.

[3] Penned by Presiding Commissioner Raul T. Aquino with Commissioners Victoriano R. Calaycay and Angelita A. Gacutan, concurring; rollo, pp. 80-89.

[4] Id. at 90-91.

[5] Penned by Executive Labor Arbiter Isabel G. Panganiban-Ortiguerra; rollo, pp. 168-186.

[6] Records, p. 77.

[7] Rollo, p. 165.

[8] Id. at 166-167.

[9] Id. at 186.

[10] Id. at 88.

[11] Id. at 86-88.

[12] Supra note 1.

[13] G.R. No. L-70544, 5 November 1987, 155 SCRA 403, 409.

[14] CA rollo, pp. 247-253.

[15] Days Hotel Philippines, Inc., Omnisource Management, Inc., and Reynaldo Concepcion v. Herbert Williams, G.R. No. 166178, Supreme Court Third Division Resolution dated 14 February 2005.

[16] Records, p. 273.

[17] Oropeza Marketing Corporation v. Allied Banking Corporation, 441 Phil. 551, 563 (2002).

[18] Romero v. Tan, G.R. No. 147570, 27 February 2004, 424 SCRA 108, 122.

[19] Records, pp. 270-272.

[20] Id. at 271.

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