Larkins vs. NLRC

No jurisdiction over the person or the subject matter is acquired where summons is not served in accordance with Article XIV of the R.P.-U.S. Military Bases Agreement and where the real employer is the United States Government, whose labor disputes with Filipino employees are governed exclusively by the Base Labor Agreement grievance and arbitration procedures. Applied to Filipino dormitory attendants dismissed at Clark Air Base, the Labor Arbiter's judgment against individual USAF personnel was therefore null and void.

T/Sgt Aldora Larkins was a member of the United States Air Force assigned to oversee the dormitories of the Third Aircraft Generation Squadron at Clark Air Base, Pampanga. The Filipino dormitory attendants involved were employed in connection with the maintenance and upkeep of those dormitories under contracts servicing the United States Armed Forces. Their employment relations inside the bases were governed by the Agreement Between the Republic of the Philippines and the United States of America Concerning Military Bases and by the Agreement Relating to the Employment of Philippine Nationals in the United States Military Bases in the Philippines, otherwise known as the Base Labor Agreement of May 27, 1968.

Petitioner was a member of the United States Air Force assigned to oversee the dormitories of the Third Aircraft Generation Squadron (3 AGS) at Clark Air Base, Pampanga. On August 10, 1988, 3 AGS terminated its contract for the maintenance and upkeep of the dormitories with the De Guzman Custodial Services. The employees thereof, including private respondents, were allowed to continue working for 3 AGS, with the new contractor, JAC Maintenance Services owned by Joselito Cunanan, left to decide whether to retain their services.

Cunanan chose to bring in his own workers. As a result, the workers of De Guzman Custodial Services were requested to surrender their base passes to Lt. Col. Frankhauser or to petitioner. Thereafter, on August 12, 1988, private respondents filed a complaint with Regional Arbitration Branch No. III of the NLRC at San Fernando, Pampanga, against petitioner, Lt. Col. Frankhauser, and Cunanan for illegal dismissal and underpayment of wages. On September 9, 1988, they amended the complaint to add claims for emergency cost of living allowance, thirteenth-month pay, service incentive leave pay and holiday premiums. With private respondents' conformity, the Labor Arbiter ordered Cunanan dropped as party respondent.

Petitioner and Lt. Col. Frankhauser failed to answer the complaint, to appear at the hearings, and to submit their position paper, which the Labor Arbiter deemed a waiver. The case was thus submitted for decision on the basis of private respondents' position paper and supporting documents. On November 21, 1988, the Labor Arbiter granted all claims, found Lt. Col. Frankhauser and petitioner guilty of illegal dismissal, and ordered reinstatement with full back wages or, if no longer possible, separation pay. On appeal, petitioner claimed no summons or copies of the original and amended complaints were ever served on her, and that attempted service of hearing notices did not comply with the R.P.-U.S. Military Bases Agreement of 1947. The NLRC nevertheless affirmed, while finding the United States Government the real employer and real party respondent.

• Lack of Jurisdiction — Absence of Service of Summons: Petitioner argued that the Labor Arbiter never acquired jurisdiction over her person because no summons or copies of the original and amended complaints were ever served on her.
• Non-Compliance with Bases Agreement: Petitioner maintained that the attempts to serve her with notices of hearing were not in accordance with Article XIV of the R.P.-U.S. Military Bases Agreement of 1947.

• Notices of Hearing as Service: Respondents did not dispute that no summons was issued and served on petitioner, but countered that notices of the hearings were sent to her.

• Service of Process under the Bases Agreement: Whether the Labor Arbiter acquired jurisdiction over the person of petitioner where no summons was served and service was not coursed through the Base Commander in accordance with Article XIV of the R.P.-U.S. Military Bases Agreement.
• Voluntary Submission by Appeal: Whether petitioner's appeal to and participation in oral argument before the NLRC constituted waiver of lack of summons and voluntary submission to jurisdiction.
• Real Employer, Sovereign Immunity and Exclusive Grievance Procedure: Whether the Labor Arbiter acquired jurisdiction over the case where the real employer was the United States Government and disputes were subject to settlement under the Base Labor Agreement.

• Service of Process under the Bases Agreement: No. Jurisdiction over the person was not acquired, summonses for United States Armed Forces personnel inside a U.S. base being servable only with permission of the Base Commander and notices of hearing not being summonses.
• Voluntary Submission by Appeal: No. An appearance before the NLRC precisely to question jurisdiction over the person is not equivalent to service of summons nor a valid waiver thereof.
• Real Employer, Sovereign Immunity and Exclusive Grievance Procedure: No. The employer was the United States Government operating the dormitories by right of sovereign power, and disputes were to be settled under the grievance, labor relations and arbitration procedures of the Base Labor Agreement, rendering the Labor Arbiter's judgment null and void.

• Service of Process under the Bases Agreement: Under Article XIV, no civil or criminal process could be served within any base except with permission of the commanding officer; if permission was withheld, the commanding officer was to take the necessary steps to serve the process and provide attendance of the server or procure the affidavit to prove service. The Labor Arbiter did not follow this procedure, instead addressing summons to Lt. Col. Frankhauser and not the Base Commander. By analogy to civil procedure, made applicable to NLRC proceedings under Rule I, Sec. 3 of the Revised Rules of the NLRC, jurisdiction over the person of the respondent requires service of summons; absent such service or valid waiver, hearings and judgment are null and void.
• Voluntary Submission by Appeal: Although petitioner appealed to the NLRC and participated in oral argument, no waiver resulted because the sole issue raised was absence of jurisdiction over her person, with other grounds discussed only in relation to and as a result of that issue. Where appearance is precisely to question the agency's jurisdiction over the defendant, such appearance is not equivalent to service of summons.
• Real Employer, Sovereign Immunity and Exclusive Grievance Procedure: Even assuming valid waiver of service, the case could not prosper because petitioner and Lt. Col. Frankhauser were not sued in their personal capacities for tortious acts, while 3 AGS was named and the NLRC itself found the real party respondent and real employer to be the United States Government maintaining Clark Air Base. Private respondents were dismissed by Lt. Col. Frankhauser acting for and in behalf of the U.S. Government, which operated the dormitories by sovereign power; any monetary awards would be liabilities of the United States government, not of the individual respondents in their personal capacities. Under the Base Labor Agreement of May 27, 1968, disputes between the United States Armed Forces and Filipino employees were to be settled under grievance or labor relations procedures or by arbitration under the Romualdez-Bosworth Memorandum of Agreement of September 5, 1985, appealable to a Joint Labor Committee, to the exclusion of ordinary labor adjudication.

• Jurisdiction over the person through service of summons in labor cases — Jurisdiction over the person of the respondent requires service of summons, with civil procedure provisions applied by analogy to NLRC proceedings; absent service or valid waiver, hearings and judgment are null and void. Applied here to annul the Labor Arbiter's decision where no summons was served on petitioner.
• Notices of hearing are not summonses — Notices of hearing cannot substitute for the summons required to acquire jurisdiction over the person. Applied to reject respondents' contention that sending hearing notices cured the absence of summons.
• Service of process inside U.S. military bases under Article XIV — Summonses and other processes for United States Armed Forces personnel within a U.S. base could be served only with permission of the Base Commander, who if withholding permission must designate another to serve and obtain proof of service. Applied to find non-compliance where summons was addressed to Lt. Col. Frankhauser rather than the Base Commander.
• No waiver by appearance to contest jurisdiction — Appearance precisely to question jurisdiction over the person is not equivalent to service of summons, even if other grounds are raised in relation to that jurisdictional challenge. Applied to hold petitioner's appeal and oral argument did not submit her person to jurisdiction.
• Sovereign employer and exclusive Base Labor Agreement remedy — Where the United States Government, operating by sovereign power, is the real employer of Filipino base employees, individual USAF personnel are not personally liable and disputes must be settled through the grievance, arbitration, and Joint Labor Committee procedures of the Base Labor Agreement. Applied to hold the Labor Arbiter had no jurisdiction over the dismissal dispute involving 3 AGS dormitory attendants.

• ". . . [N]o process, civil or criminal, shall be served within any base except with the permission of the commanding officer of such base; but should the commanding officer refuse to grant such permission he shall forthwith take the necessary steps . . . . to serve such process, as the case may be, and to provide the attendance of the server of such process before the appropriate court in the Philippines or procure such server to make the necessary affidavit or declaration to prove such service as the case may require." — States the controlling Article XIV procedure for service inside U.S. bases, non-compliance with which defeated jurisdiction over petitioner.
• "Notices of hearing are not summonses." — States the ratio rejecting substitution of hearing notices for jurisdictional summons in NLRC proceedings.
• "If an appearance before the NLRC is precisely to question the jurisdiction of the said agency over the person of the defendant, then this appearance is not equivalent to service of summons (De los Santos v. Montera, 221 SCRA 15 [1993])." — Defines the limited-appearance rule preserving petitioner's jurisdictional objection despite appeal and participation.
• "Unquestionably therefore, no jurisdiction was ever acquired by the Labor Arbiter over the case and the person of petitioner and the judgment rendered is null and void (Filmerco Commercial Co. v. Intermediate Appellate Court, supra.; Sy v. Navarro, 81 SCRA 458 [1978])." — States the ultimate conclusion that both personal and subject-matter jurisdiction were wanting.

• Vda. de Macoy vs. Court of Appeals, 206 SCRA 244 [1992] — Cited for the basic rule that the Labor Arbiter cannot acquire jurisdiction without service of summons and that absent service or valid waiver, proceedings and judgment are null and void.
• Filmerco Commercial Co., Inc. vs. Intermediate Appellate Court, 149 SCRA 193 [1987] — Cited for the same jurisdictional requirement and for the conclusion that no jurisdiction was acquired and the judgment was null and void.
• De los Santos vs. Montera, 221 SCRA 15 [1993] — Cited as authority that appearance to question jurisdiction is not equivalent to service of summons.
• United States of America vs. Guinto, 182 SCRA 644 [1990] — Cited to support that petitioner and Lt. Col. Frankhauser were not sued in personal capacities for tortious acts and that the U.S. Government operated the dormitories by sovereign power as employer.
• United States of America vs. Ruiz, 136 SCRA 487 [1985] — Cited to support that the employer of private respondents was the U.S. Government.
• Sanders vs. Veridiano II, 162 SCRA 88 [1988] — Cited for the rule that monetary awards, if proved and if jurisdiction were acquired, must be satisfied by the United States government and not by the individual officers in their personal capacities.
• Sy vs. Navarro, 81 SCRA 458 [1978] — Cited with Filmerco for the conclusion that no jurisdiction was acquired and the judgment was null and void.

• Article XIV, R.P.-U.S. Military Bases Agreement — Governs service of civil or criminal process within U.S. bases, requiring permission of the commanding officer or substituted service by him with proof; applied to invalidate service addressed to Lt. Col. Frankhauser instead of the Base Commander.
• Articles II and III, Base Labor Agreement of May 27, 1968; Romualdez-Bosworth Memorandum of Agreement dated September 5, 1985 — Require disputes between the United States Armed Forces and Filipino employees to be settled under grievance or labor relations procedures or arbitration, appealable to a Joint Labor Committee; applied to exclude Labor Arbiter jurisdiction where the U.S. Government was the real employer.
• Rule I, Sec. 3, Revised Rules of the NLRC — Allows application by analogy of civil procedure provisions to NLRC proceedings; applied to impose the summons requirement for jurisdiction over the person.
• Rule 65, Revised Rules of Court — Basis of the petition for certiorari to set aside the NLRC Resolutions for lack of jurisdiction.

Padilla, Davide, Jr., Bellosillo and Kapunan, JJ., concur. No separate concurring opinions with additional reasoning appear in the text.