Chris Garments Corporation vs. Sto. Tomas

A motion for reconsideration is dispensable and not necessary before filing a petition for certiorari from the decision of the Secretary of Labor and Employment when the governing administrative rules expressly prohibit the filing of such a motion.

Chris Garments Corporation is a manufacturer and exporter of garments and apparel. It maintained a collective bargaining agreement (CBA) with Samahan Ng Mga Manggagawa sa Chris Garments Corporation–Solidarity of Union in the Philippines for Empowerment and Reforms (SMCGC-SUPER), the certified bargaining agent of its rank-and-file employees, covering the period July 1, 1999 to June 30, 2004. Chris Garments Workers Union–PTGWO, Local Chapter No. 832, a legitimate labor organization holding a Certificate of Creation of Local/Chapter issued by the Bureau of Labor Relations on January 31, 2002, sought to represent rank-and-file employees not covered by that CBA. Department Order No. 40-03, Series of 2003, which amended the Implementing Rules of Book V of the Labor Code, governs certification election proceedings and provides that decisions of the Secretary of Labor and Employment shall become final and executory after ten days from receipt, with no motion for reconsideration allowed.

Chris Garments Corporation is a manufacturer and exporter of garments and apparel. It maintained a collective bargaining agreement (CBA) with SMCGC-SUPER, the certified bargaining agent of its rank-and-file employees, covering the period July 1, 1999 to June 30, 2004. On February 8, 2002, Chris Garments Workers Union–PTGWO, Local Chapter No. 832, holding a Certificate of Creation of Local/Chapter issued by the Bureau of Labor Relations on January 31, 2002, filed a petition for certification election before the Med-Arbiter, seeking to represent rank-and-file employees not covered by the existing CBA. Petitioner moved to dismiss, arguing that the CBA barred any certification election petition prior to the 60-day freedom period and that the union members were not its regular employees but direct employees of qualified and independent contractors. The union countered that its members were regular employees engaged in activities necessary and desirable to petitioner's main business, with an average length of service of four years, and that petitioner controlled their work and paid their salaries. The union further argued that other rank-and-file employees not covered by the CBA sought representation and that the contract bar rule did not apply.

The Med-Arbiter dismissed the petition, ruling that no employer-employee relationship existed since the union admitted its members were agency employees, and that even if they were considered direct employees, the petition was barred by the contract bar rule under Article 232 of the Labor Code, as it could only be filed during the 60-day freedom period from May 1 to June 30, 2004. On appeal, the Secretary of Labor and Employment affirmed the dismissal in a Resolution dated December 27, 2002, but on different grounds. She found that petitioner failed to prove the union members were employees of qualified and independent contractors with substantial capital, that petitioner had the right to control their work, and that the members performed activities directly related to petitioner's main business, thus potentially part of the bargaining unit. Nevertheless, she held the petition could not be entertained except during the 60-day freedom period and found no reason to split the bargaining unit.

On May 16, 2003, the union filed a second petition for certification election, which the Med-Arbiter dismissed on the ground that it was barred by prior judgment. The Secretary of Labor affirmed this dismissal on appeal. On June 4, 2004, the union filed a third petition for certification election. The Med-Arbiter again dismissed on the grounds of no employer-employee relationship and prior judgment bar. On appeal, however, the Secretary of Labor reversed the Med-Arbiter in a Decision dated January 18, 2005, granting the petition and ordering the immediate conduct of a certification election among the regular rank-and-file employees of Chris Garments Corporation, with choices among the PTGWO local chapter, SMCGC-SUPER, and No Union.

Petitioner received the Secretary's decision on January 25, 2005, and filed a petition for certiorari with the Court of Appeals on February 4, 2005, the tenth day from receipt. The Court of Appeals dismissed the petition for failure to file a motion for reconsideration of the Secretary's decision. Meanwhile, a certification election was conducted on June 21, 2005, in which SMCGC-SUPER emerged as the winning union, and was subsequently certified by the Med-Arbiter on January 20, 2006 as the sole and exclusive bargaining agent of all rank-and-file employees.

• Motion for Reconsideration Not Required: Petitioner argued that the Court of Appeals seriously erred in dismissing the petition for certiorari on the sole ground that no motion for reconsideration was filed, since Section 21, Rule VIII of Department Order No. 40-03 expressly prohibits the filing of a motion for reconsideration from a decision of the Secretary of Labor.
• Technicality Over Substance: Petitioner maintained that the Court of Appeals committed grave abuse of discretion in refusing to resolve the merits of the petition, dismissing it on a baseless technicality that frustrated rather than promoted substantial justice.
• Absence of Employer-Employee Relationship: Petitioner argued that the Secretary of Labor committed grave abuse of discretion in reversing the Med-Arbiter and giving due course to the certification election petition despite the absence of any employer-employee relationship between the company and the union members.
• Res Judicata and Conclusiveness of Judgment: Petitioner contended that the Secretary erred in reversing the Med-Arbiter's finding that the petition was barred by res judicata and/or the principle of conclusiveness of judgment.
• Failure to Submit Certification Against Forum Shopping: Petitioner argued that the Secretary erred in not dismissing outright the union's appeal for failure to submit a certification against forum shopping.

• Regular Employment Status: Respondent union countered that its members are regular employees of petitioner because they are engaged in activities necessary and desirable to its main business although called agency employees, their length of service spanned an average of four years, petitioner controlled their work attitude and performance, and petitioner paid their salaries.
• Employees Not Covered by CBA: Respondent argued that while there is an existing CBA between petitioner and SMCGC-SUPER, there are other rank-and-file employees not covered by the CBA who seek representation for collective bargaining purposes.
• Contract Bar Rule Inapplicable: Respondent contended that the contract bar rule does not apply to the petition.

• Motion for Reconsideration: Whether a motion for reconsideration is necessary before a party can file a petition for certiorari from the decision of the Secretary of Labor and Employment.
• Res Judicata: Whether the case is barred by res judicata or conclusiveness of judgment.
• Employer-Employee Relationship: Whether there is an employer-employee relationship between petitioner and the union members.

• Motion for Reconsideration: No. A motion for reconsideration is dispensable when the governing administrative rules expressly prohibit its filing; Department Order No. 40-03, Section 21, Rule VIII, provides that no motion for reconsideration of the Secretary's decision shall be entertained.
• Res Judicata: No. There is no identity of causes of action between the first and third petitions for certification election; the union had no cause of action in the first petition as it was filed outside the 60-day freedom period, while in the third petition a cause of action existed.
• Employer-Employee Relationship: Resolved by conclusiveness of judgment. The issue was already determined with finality in the December 27, 2002 Resolution of the Secretary of Labor, which petitioner did not appeal, precluding relitigation under the doctrine of conclusiveness of judgment.

• Motion for Reconsideration: It is settled that the filing of a motion for reconsideration is a prerequisite to a special civil action for certiorari to afford the lower court the opportunity to correct itself. This rule, however, admits of exceptions, such as when a motion for reconsideration would be useless under the circumstances. Department Order No. 40-03, Series of 2003, expressly provides that the decision of the Secretary of Labor shall become final and executory after ten days from receipt and that no motion for reconsideration shall be entertained. Petitioner received the January 18, 2005 Decision on January 25, 2005; it would have become final on February 4, 2005, the tenth day. Petitioner filed its certiorari petition on that same date. Because the administrative rules explicitly prohibit motions for reconsideration, such a motion is dispensable and not necessary. The Court of Appeals therefore erred in dismissing the petition on this ground.

• Res Judicata: The doctrine of res judicata requires four elements: (1) the judgment must be final; (2) rendered by a court of competent jurisdiction; (3) a judgment on the merits; and (4) identity of parties, subject matter, and causes of action. Res judicata has a dual aspect: "bar by prior judgment" under Rule 39, Section 47(b), requiring identity of parties, subject matter, and causes of action, and "conclusiveness of judgment" under Section 47(c), requiring only identity of issues between the same parties in a different cause of action. The first three elements were undisputed: the December 27, 2002 Resolution was final, rendered on the merits, and by a tribunal with jurisdiction. However, the fourth element—identity of causes of action—was absent. The first petition was dismissed because it was filed outside the 60-day freedom period, meaning the union had no cause of action at that time. The third petition was filed well within the 60-day freedom period, giving the union a cause of action to challenge the status of SMCGC-SUPER as exclusive bargaining representative. There being no identity of causes of action, res judicata does not bar the third petition.

• Employer-Employee Relationship: The matter of employer-employee relationship was resolved with finality by the Secretary of Labor in the Resolution dated December 27, 2002, which found that petitioner failed to prove the union members were employees of independent contractors, that petitioner had the right to control their work, and that they performed activities directly related to petitioner's main business. Because petitioner did not appeal this factual finding, it became the final resolution of the issue. Under the doctrine of conclusiveness of judgment, issues actually and directly resolved in a former suit cannot again be raised in any future case between the same parties, even involving a different cause of action. The preclusion of issues operates to bar relitigation of the employer-employee relationship question.

• Motion for Reconsideration as Prerequisite to Certiorari — The filing of a motion for reconsideration is generally a prerequisite to a special civil action for certiorari, to give the lower tribunal the opportunity to correct itself. This rule admits of exceptions, however, including when a motion for reconsideration would be useless under the circumstances, such as when the governing administrative rules expressly prohibit the filing of such a motion. The Court applied this exception because Department Order No. 40-03, Section 21, Rule VIII, explicitly states that no motion for reconsideration of the Secretary's decision shall be entertained.

• Res Judicata — A final judgment on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and matters determined. The four elements are: (1) final judgment; (2) jurisdiction over subject matter and parties; (3) judgment on the merits; and (4) identity of parties, subject matter, and causes of action. Res judicata has a dual aspect: "bar by prior judgment" (Rule 39, Section 47(b)), requiring identity of parties, subject matter, and causes of action, and "conclusiveness of judgment" (Rule 39, Section 47(c)), requiring only identity of issues between the same parties in a different cause of action. The Court found the fourth element absent because the union had no cause of action in the first petition (filed outside the freedom period) but had one in the third petition (filed within the freedom period).

• Conclusiveness of Judgment — Issues actually and directly resolved in a former suit cannot again be raised in any future case between the same parties involving a different cause of action. Identity of causes of action is not required, only identity of issues. The Court applied this doctrine to preclude relitigation of the employer-employee relationship issue, which had been resolved with finality in the December 27, 2002 Resolution and which petitioner had not appealed.

• "Clearly, petitioner availed of the proper remedy since Department Order No. 40-03 explicitly prohibits the filing of a motion for reconsideration. Such motion becomes dispensable and not at all necessary." — This passage states the ratio decidendi on the first issue: that the prohibition on motions for reconsideration in the governing administrative rules renders such a motion dispensable before filing certiorari.

• "There is no identity of causes of action to speak of since in the first petition, the union has no cause of action while in the third, a cause of action already exists for the union as they are now legally allowed to challenge the status of SMCGC-SUPER as exclusive bargaining representative." — This passage articulates the reasoning on the res judicata issue, explaining why the dismissal of the first petition does not bar the third.

• "The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and Employment in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then, it may be considered as the final resolution of such issue." — This passage applies the doctrine of conclusiveness of judgment to preclude relitigation of the employer-employee relationship issue.

• Abacan, Jr. vs. Northwestern University, Inc., G.R. No. 140777, April 8, 2005, 455 SCRA 136 — Cited for the settled rule that filing a motion for reconsideration is a prerequisite to certiorari.
• Santos vs. Cruz, G.R. Nos. 170096-97, March 3, 2006, 484 SCRA 66 — Cited for the exception that a motion for reconsideration is not necessary when it would be useless under the circumstances.
• Heirs of Rolando N. Abadilla vs. Galarosa, G.R. No. 149041, July 12, 2006, 494 SCRA 675 — Cited for the elements of res judicata and the doctrine of conclusiveness of judgment, including the distinction between identity of causes of action and identity of issues.
• Republic vs. Yu, G.R. No. 157557, March 10, 2006, 484 SCRA 416 — Cited for the definition of "bar by prior judgment" requiring identity of parties, subject matter, and causes of action.
• Rasdas vs. Estenor, G.R. No. 157605, December 13, 2005, 477 SCRA 538 — Cited for the principle that conclusiveness of judgment has the effect of preclusion of issues.

• Article 232, Labor Code — Prohibition on certification election: the Bureau shall not entertain any petition for certification election or any action which may disturb the administration of duly registered existing collective bargaining agreements except during the freedom period. Applied by the Med-Arbiter to bar the first petition, and by the Secretary to limit the timing of certification election petitions.
• Section 21, Rule VIII, Department Order No. 40-03, Series of 2003 — Provides that the decision of the Secretary of Labor shall become final and executory after ten days from receipt and that no motion for reconsideration shall be entertained. Applied by the Court to hold that a motion for reconsideration is dispensable before filing certiorari.
• Rule 39, Section 47(b), 1997 Rules of Civil Procedure — Provides for "bar by prior judgment," requiring identity of parties, subject matter, and causes of action. Applied to analyze whether res judicata bars the third petition; the Court found no identity of causes of action.
• Rule 39, Section 47(c), 1997 Rules of Civil Procedure — Provides for "conclusiveness of judgment," requiring only identity of issues between the same parties in a different cause of action. Applied to preclude relitigation of the employer-employee relationship issue.

Carpio, Carpio Morales, Tinga, and Velasco, Jr., JJ., concurred.