Cathay Pacific Steel Corporation vs. Court of Appeals

A Petition for Certiorari under Rule 65 cannot substitute for a lost appeal under Rule 45, and where the Court of Appeals' decision is a disposition on the merits, the aggrieved party's remedy is a Petition for Review on Certiorari, not certiorari for grave abuse of discretion. A supervisory employee — one who effectively recommends managerial actions using independent judgment but lacks the power to lay down and execute management policies or to hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees — is not prohibited from joining, assisting, or forming a labor organization.

CAPASCO is a domestic corporation engaged in manufacturing steel products. Its corporate officers — Benjamin Chua, Jr. (President), Virgilio Agerro (Vice-President), and Leonardo Visorro, Jr. (Administrative-Personnel Manager) — were impleaded as petitioners alongside the corporation. Private respondent Enrique Tamondong III was hired on 16 February 1990 as Assistant to the Personnel Manager at CAPASCO's Cainta Plant and was later promoted to Personnel/Administrative Officer and then to Personnel Superintendent. Private respondent CUSE is a duly registered union of CAPASCO supervisory employees. The case originated from a Complaint for Illegal Dismissal and Unfair Labor Practice filed before the NLRC by four former CAPASCO employees, though three eventually executed quitclaims, leaving only Tamondong as the relevant private respondent.

Cathay Pacific Steel Corporation (CAPASCO) is a domestic corporation engaged in the manufacture of steel products. Among its corporate officers were Benjamin Chua, Jr., President; Virgilio Agerro, Vice-President; and Leonardo Visorro, Jr., Administrative-Personnel Manager. Enrique Tamondong III was hired on 16 February 1990 as Assistant to the Personnel Manager at CAPASCO's Cainta Plant. He was subsequently promoted to Personnel/Administrative Officer and then to Personnel Superintendent.

Sometime in June 1996, the supervisory personnel of CAPASCO launched a move to organize a union among their ranks, which later became the CAPASCO Union of Supervisory Employees (CUSE). Tamondong actively involved himself in the formation of the union and was elected as one of its officers. On 3 February 1997, CAPASCO sent Tamondong a memo requiring him to explain and to discontinue his union activities, warning that continuance would adversely affect his employment. Tamondong ignored the warning and replied on 5 February 1997, invoking his right as a supervisory employee to join and organize a labor union. On 6 February 1997, CAPASCO terminated Tamondong's employment through a memo, citing his union activities as acts constituting serious disloyalty to the company and grounding the dismissal on loss of trust and confidence.

Tamondong filed a Complaint for Illegal Dismissal and Unfair Labor Practice before the NLRC, Regional Arbitration Branch IV, alleging that his dismissal had no just cause and was anchored solely on his involvement in organizing the union of supervisory personnel. He admitted his active role in forming the union but contended that this was a legitimate exercise of his constitutionally guaranteed right to self-organization. CAPASCO countered that Tamondong, by virtue of his position as Personnel Superintendent and the functions he actually performed, was a managerial employee prohibited by law from joining a union or being elected as one of its officers, and that his dismissal was valid based on loss of trust and confidence.

Acting Executive Labor Arbiter Pedro C. Ramos rendered a Decision on 7 August 1998 in favor of Tamondong, finding CAPASCO guilty of unfair labor practice and illegal dismissal, and ordering reinstatement with backwages and benefits. On appeal, the NLRC modified the Labor Arbiter's Decision on 25 August 1999, dismissing the complaints for illegal dismissal and unfair labor practice for lack of merit and factual basis, respectively, and deleting most awards except for 13th month pay, holiday pay, and service incentive leave. Both parties' motions for reconsideration were denied. Tamondong and CUSE then filed a Petition for Certiorari before the Court of Appeals, which granted the petition on 28 October 2003, annulling the NLRC Decision and reinstating the Labor Arbiter's Decision. The Court of Appeals denied petitioners' Motion for Reconsideration on 3 June 2004. Petitioners received the denial on 9 June 2004 and had 15 days, or until 24 June 2004, to file a Petition for Review under Rule 45, but instead allowed the period to lapse and filed the present Petition for Certiorari under Rule 65 on the 61st day from receipt.

• Managerial Employee Status: Petitioners argued that Tamondong, as Personnel Superintendent, was performing functions of a managerial employee because he laid down major management policies on personnel relations, issued memos on company rules and regulations, and imposed disciplinary sanctions such as warnings and suspensions, executing the same with full power and discretion without need of further approval or review. The notations "NOTED BY" of Vice-President Agerro on the memos were mere notice, not approval.
• Confidential Employee Status: Petitioners additionally claimed that Tamondong was a confidential employee with knowledge of confidential information involving company policies on personnel relations, further disqualifying him from union activities.
• Valid Dismissal: Petitioners maintained that Tamondong was validly dismissed based on loss of trust and confidence, and that the nature of his position and functions as Personnel Superintendent was incompatible and in conflict with union activities.
• Grave Abuse of Discretion by the Court of Appeals: Petitioners asserted that the Court of Appeals gravely abused its discretion in holding that Tamondong was not a managerial employee but a supervisory employee, and in ruling that CAPASCO was guilty of illegal dismissal and unfair labor practice, and in reinstating the Labor Arbiter's awards for backwages, damages, and attorney's fees.

• Improper Remedy: Respondents asserted that the assailed Decision of the Court of Appeals, being a final disposition on the merits, was appealable to the Supreme Court by a Petition for Review on Certiorari under Rule 45, not under Rule 65.
• New Ground Barred: Respondents claimed that petitioners' new ground that Tamondong was a confidential employee was not a valid ground to be raised in a Petition for Certiorari seeking reversal of the Court of Appeals' Decision and Resolution, as it was raised for the first time on appeal.

• Propriety of Remedy: Whether a Petition for Certiorari under Rule 65 is the proper remedy to seek reversal of a Court of Appeals decision that is a disposition on the merits, where the reglementary period for a Petition for Review under Rule 45 has already lapsed.
• Employee Classification: Whether Tamondong was a managerial employee prohibited from joining a labor organization, or a supervisory employee entitled to participate in union activities.
• Confidential Employee Issue: Whether the allegation that Tamondong was a confidential employee may be raised for the first time in a Petition for Certiorari before the Supreme Court.

• Propriety of Remedy: No. The proper remedy was a Petition for Review on Certiorari under Rule 45, not a Petition for Certiorari under Rule 65, the questioned Decision being a disposition on the merits and the reglementary period having lapsed through petitioners' own negligence.
• Employee Classification: No, Tamondong was not a managerial employee. He was a supervisory employee who effectively recommended managerial actions but lacked the power to lay down and execute management policies or to hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees, making him eligible to join a labor organization.
• Confidential Employee Issue: No. An issue not raised in the lower court cannot be raised for the first time on appeal, and this principle applies to a special civil action for certiorari under Rule 65; moreover, petitioners failed to adduce evidence proving Tamondong was a confidential employee.

• Propriety of Remedy: The essential requisites for a Petition for Certiorari under Rule 65 include that there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. Petitioners merely alleged grave abuse of discretion without explaining why an appeal could not cure the alleged errors. The Court of Appeals' Decision was a disposition on the merits, making a Petition for Review under Rule 45 the proper remedy. The remedies of appeal and certiorari under Rule 65 are mutually exclusive, not alternative or cumulative. Certiorari cannot substitute for a lost appeal occasioned by one's own negligence or error in the choice of remedies. Petitioners received the Resolution denying their Motion for Reconsideration on 9 June 2004 and had until 24 June 2004 to file a Petition for Review under Rule 45, but instead allowed the 15-day period to lapse and filed the Petition for Certiorari on the 61st day. While the Court may, in the interest of justice, treat a Petition for Certiorari as a Petition for Review under Rule 45 if filed within the reglementary period — as it did in Delsan Transport Lines, Inc. vs. Court of Appeals — no compelling reason justified liberal application here, as the petition was filed well beyond the 15-day period. The arguments raised delved into the wisdom or legal soundness of the Court of Appeals' Decision, which is beyond the province of certiorari.

• Employee Classification: Even assuming the petition were proper, it would still be dismissible. The Court of Appeals did not act with grave abuse of discretion in finding Tamondong to be a supervisory employee. The Court of Appeals referenced a Memorandum dated 12 September 1996 requiring Tamondong to observe fixed daily working hours from 8:00 a.m. to 12:00 noon and 1:00 p.m. to 5:00 p.m., an imposition uncharacteristic of a managerial employee, as held in Engineering Equipment, Inc. vs. NLRC, where the Court stated that a managerial employee is not subjected to rigid observance of regular office hours. The Court of Appeals also found that while Tamondong possessed enormous powers and performed important functions, there was no clear showing he was at liberty to lay down and execute major business and operational policies using his own independent judgment. He did not possess the power to hire, transfer, terminate, or discipline erring employees; at most, he informed and warned rank-and-file employees regarding violations of company rules. The functions he performed — issuing warnings to employees with irregular attendance and requiring employees to explain charges of abandonment — are normally performed by a supervisor, not a manager. Article 212(m) of the Labor Code differentiates supervisory employees, who effectively recommend managerial actions using independent judgment, from managerial employees, who are vested with powers to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees. Tamondong did not perform any managerial functions as defined by the Code. Article 245's disqualification of managerial employees from joining labor organizations does not apply to supervisory employees. Dismissing Tamondong on account of his union activities constituted unfair labor practice under Article 248(a) of the Labor Code, curtailing his constitutionally guaranteed right to self-organization under Article XIII, Section 3 of the 1987 Constitution.

• Confidential Employee Issue: The allegation that Tamondong was a confidential employee cannot be validly raised in the Petition for Certiorari. It is settled that an issue not raised in the trial court cannot be raised for the first time on appeal, and this principle applies to a special civil action for certiorari under Rule 65. Furthermore, petitioners failed to adduce evidence proving that Tamondong was indeed a confidential employee.

• Certiorari as Substitute for Lost Appeal — A special civil action for certiorari under Rule 65 cannot be used as a substitute for a lost appeal where the latter remedy is available. The remedies of appeal in the ordinary course of law and certiorari under Rule 65 are mutually exclusive and not alternative or cumulative. Certiorari is intended for correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction, not for review of the wisdom or legal soundness of a decision. Where the Court of Appeals renders a disposition on the merits, the proper remedy is a Petition for Review on Certiorari under Rule 45. The Court may treat a Rule 65 petition as a Rule 45 petition in the interest of justice if filed within the reglementary period, but not where the period has lapsed through the petitioner's own negligence.

• Distinction Between Managerial and Supervisory Employees — Under Article 212(m) of the Labor Code, supervisory employees are those who, in the interest of the employer, effectively recommend managerial actions if the exercise of such authority is not merely routinary or clerical but requires the use of independent judgment. Managerial employees are those vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees. Only managerial employees are ineligible to join, assist, or form any labor organization under Article 245; supervisory employees may form separate labor organizations of their own. The essential characteristics of managerial rank include: (1) not subject to rigid observance of regular office hours; (2) work requires consistent exercise of discretion and judgment; (3) output cannot be standardized in relation to a given period of time; (4) manages a recognized department or subdivision, regularly directing the work of other employees; (5) authority to hire or discharge, or suggestions and recommendations as to hiring, discharging, advancement, promotion, or change of status are given particular weight; and (6) as a rule, not paid hourly wages nor subjected to maximum hours of work.

• Unfair Labor Practice — Dismissal for Union Activities — Dismissing a supervisory employee on account of his union activities constitutes unfair labor practice under Article 248(a) of the Labor Code, curtailing the employee's constitutionally guaranteed right to self-organization under Article XIII, Section 3 of the 1987 Constitution.

• Issues Not Raised Below Cannot Be Raised on Appeal — An issue which was not raised in the trial court cannot be raised for the first time on appeal. This principle applies to a special civil action for certiorari under Rule 65.

• "Time and again this Court reminded members of the bench and bar that the special civil action of Certiorari cannot be used as a substitute for a lost appeal where the latter remedy is available. Such a remedy will not be a cure for failure to timely file a Petition for Review on Certiorari under Rule 45." — This passage articulates the fundamental rule that certiorari under Rule 65 is not a substitute for a lost appeal, a principle central to the dismissal of the petition.

• "[T]here was no clear showing that he is at liberty, by using his own discretion and disposition, to lay down and execute major business and operational policies for and in behalf of CAPASCO." — This passage, quoted from the Court of Appeals' Decision, captures the critical finding that Tamondong lacked the defining power of a managerial employee, supporting his classification as a supervisory employee eligible for union membership.

• "Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own." — This verbatim quotation of Article 245 of the Labor Code states the statutory basis for the right of supervisory employees to self-organization, the provision that the Court applied to uphold Tamondong's dismissal as illegal.

• Engineering Equipment, Inc. vs. NLRC, 218 Phil. 719 (1984) — Cited for the proposition that a managerial employee is not subject to rigid observance of regular office hours, one of the essential characteristics of managerial rank used to determine that Tamondong was supervisory, not managerial.
• Delsan Transport Lines, Inc. vs. Court of Appeals, 335 Phil. 1066 (1997) — Distinguished. In that case, the Court treated a Petition for Certiorari as a Petition for Review under Rule 45 because it was filed within the 15-day reglementary period. The present case was distinguished because the petition was filed on the 61st day, well beyond the reglementary period.
• Land Bank of the Philippines vs. Court of Appeals, 456 Phil. 755 (2003) — Cited for the definitions of excess of jurisdiction, absence of jurisdiction, and grave abuse of discretion, and for the rule that certiorari and appeal are mutually exclusive remedies.
• Rivera vs. Espiritu, 425 Phil. 169 (2002) — Cited for the essential requisites of a Petition for Certiorari under Rule 65.
• Buñag vs. Court of Appeals, 363 Phil. 216 (1999) — Cited for the principle that an issue not raised in the trial court cannot be raised for the first time on appeal, applicable to certiorari under Rule 65.

• Article 212(m), Labor Code — Defines supervisory employees as those who effectively recommend managerial actions using independent judgment, and managerial employees as those vested with powers to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign, or discipline employees. Applied to classify Tamondong as a supervisory employee.
• Article 245, Labor Code — Provides that managerial employees are not eligible to join, assist, or form any labor organization, while supervisory employees may join, assist, or form separate labor organizations of their own. Applied to hold that Tamondong, as a supervisory employee, could not be prohibited from union activities.
• Article 248(a), Labor Code — Defines unfair labor practice for employers, including interference with, restraint, or coercion of employees in the exercise of their right to self-organization. Applied to find CAPASCO guilty of unfair labor practice for dismissing Tamondong on account of his union activities.
• Article XIII, Section 3, 1987 Philippine Constitution — Guarantees the right of all workers to self-organization, collective bargaining, and peaceful concerted activities. Applied as the constitutional basis for Tamondong's right to participate in union activities.
• Rule 65, Rules of Court — Governs the special civil action for certiorari, requiring that there be no appeal or plain, speedy, and adequate remedy in the ordinary course of law. Applied to dismiss the petition as an improper remedy.
• Rule 45, Rules of Court — Governs Petition for Review on Certiorari to the Supreme Court from judgments or final orders of the Court of Appeals. Identified as the proper remedy that petitioners failed to timely invoke.

Chief Justice Artemio V. Panganiban (Chairperson), Associate Justice Consuelo Ynares-Santiago, Associate Justice Ma. Alicia Austria-Martinez, and Associate Justice Romeo J. Callejo, Sr. concurred in the decision. No separate concurring opinions were noted.