PIGLAS NFWU-KMU, Sammy Malunes, et al. vs. Light Rail Transit Authority

The principle of res judicata does not apply where there is no identity of parties between the first and second actions, and the separate and distinct juridical personalities of two entities preclude the judgment against one from binding the other. A government-owned and controlled corporation with an original charter is subject to the Civil Service Law, not the Labor Code, and is beyond the jurisdiction of the labor arbiter and the NLRC.

The petitioners are members of PIGLAS-NFWU-KMU, the exclusive bargaining agent of the rank-and-file employees of Metro Transit Organization, Inc. (METRO), a private corporation originally organized under the Corporation Code. The respondent Light Rail Transit Authority (LRTA) is a government-owned and controlled corporation with an original charter under Executive Order No. 603, s. 1980. The Court's ruling in LRTA vs. Venus established that LRTA and METRO are separate and distinct entities, with employment in LRTA governed by civil service rules and beyond the reach of the Department of Labor and Employment, while METRO's employees are covered by the Labor Code.

The individual petitioners, members of PIGLAS-NFWU-KMU, the exclusive bargaining agent of the rank-and-file employees of Metro Transit Organization, Inc. (METRO), filed a complaint on October 7, 2003 against METRO and the Light Rail Transit Authority (LRTA) for illegal dismissal, unfair labor practice, and nonpayment of 13th month pay with claims for damages and attorney's fees. On September 13, 2004, Labor Arbiter Ellas H. Salinas rendered a Decision finding the individual petitioners illegally dismissed and ordering METRO and LRTA to jointly and severally pay P208,235,682.72 in backwages and separation pay.

LRTA appealed to the NLRC and posted a real property bond covered by six Transfer Certificates of Title, which the NLRC conditionally accepted pending submission of several documents. METRO also appealed but did not post an appeal bond; the NLRC allowed METRO to appeal without a separate bond, reasoning that the property bond put up by LRTA would already be equivalent to the monetary award. The individual petitioners moved to reconsider, imputing grave abuse of discretion on the NLRC's failure to dismiss the appeals for METRO's lack of the required appeal bond and for insufficiency of the LRTA's real property bond worth only P5,000,000.00. On May 19, 2006, the NLRC issued a Resolution dismissing both appeals for non-perfection, reasoning that the parties failed to comply with the conditions required in the earlier Resolution allowing the posting of property bond.

METRO and LRTA separately pursued remedies from the NLRC ruling. METRO, without filing a motion for reconsideration, filed a Rule 65 petition with the CA, docketed CA-G.R. SP. No. 95665. The CA dismissed METRO's petition for failure to first move to reconsider the NLRC ruling, a precondition for filing a Rule 65 petition. METRO elevated the dismissal to the Supreme Court via a Rule 45 petition, assigned to the Third Division, which denied the petition in its Decision dated April 14, 2008, finding no reversible error in the CA's conclusion. The Third Division also concluded that the NLRC did not err in denying METRO's appeal for failure to file a bond in accordance with the NLRC Rules of Procedure. The judgment was entered in the Book of Entries of Judgment on September 3, 2008.

LRTA, likewise without filing a motion for reconsideration, elevated the case to the CA via a Rule 65 petition, docketed CA-G.R. SP. No. 95578, claiming that the NLRC gravely abused its discretion in ruling that it had jurisdiction over LRTA and in dismissing LRTA's appeal. The CA found the petition meritorious and annulled the labor arbiter's and NLRC's rulings insofar as they held LRTA jointly and severally liable with METRO, finding that LRTA, as a government-owned and controlled corporation with an original charter, is subject to the Civil Service Law and not the Labor Code. The CA relaxed the appeal bond requirement and excused the failure to move for reconsideration, finding the labor arbiter's decision and the NLRC's actions void for lack of jurisdiction over LRTA. The individual petitioners moved to reconsider, but their motion was denied, prompting the present petition.

In the present case, the Second Division denied the petition on October 6, 2008, and denied the motion for reconsideration on February 4, 2009. The petitioners then filed the various pleadings under consideration: a Motion to Admit Attached Supplemental Motion for Reconsideration with Leave of Court dated February 8, 2009; a Supplemental Motion for Reconsideration dated February 9, 2009; a Motion for Clarification with Prayer to Set Case for Oral Argument dated March 30, 2009; and an Open Letter dated February 3, 2009 to the Chief Justice.

• Inconsistency of Rulings: Petitioners argued that there is an inconsistency or conflict between the Second Division's ruling in the present case and the Third Division's ruling in METRO vs. PIGLAS (G.R. No. 175460).
• Res Judicata: Petitioners argued that the final and executory decision in METRO vs. PIGLAS operates as res judicata on the present case insofar as the former upheld the NLRC's dismissal of both LRTA's and METRO's appeals for non-perfection, citing identity of parties, causes of action, and subject matter.
• Appeal Bond Requirement: Petitioners argued that the CA erred in reversing the NLRC decision despite LRTA and METRO's non-compliance with the jurisdictional requirement of posting an appeal bond.
• Motion for Reconsideration: Petitioners argued that the CA erred in holding that LRTA need not file a motion for reconsideration of the NLRC decision before instituting the Rule 65 petition.
• Non-Legal Considerations: Petitioners posited that funds previously allocated for the payment of METRO employees' claims were reverted to the National Treasurer, and any future allocation would be in jeopardy because of the Court's contrasting rulings.

N/A — The decision does not recount the respondent's arguments in the incidents under consideration.

• Conflict of Rulings: Whether there is an inconsistency or conflict between the Second Division's ruling in the present case and the Third Division's ruling in METRO vs. PIGLAS (G.R. No. 175460).
• Res Judicata: Whether the final and executory decision in METRO vs. PIGLAS (G.R. No. 175460) has res judicata effect on the present case (G.R. No. 182928).

• Conflict of Rulings: No. The Third Division ruling in METRO vs. PIGLAS is not contradictory to or in conflict with the Second Division's ruling in the present case, given the distinctions between the two cases and the separate juridical personalities of METRO and LRTA.
• Res Judicata: No. The principle of res judicata is inapplicable for lack of identity of parties, as METRO and LRTA are separate and distinct entities, and METRO litigated for its own interests, not for LRTA's.

• Conflict of Rulings: The Court's starting point was its ruling in LRTA vs. Venus, which held that LRTA and METRO are two separate and distinct entities, and that legal consequences flow from their existence as different personalities. Employment in LRTA is governed only by civil service rules and is beyond the reach of the DOLE, since LRTA is a government-owned and controlled corporation with an original charter. METRO, on the other hand, is covered by the Labor Code despite LRTA's subsequent acquisition thereof, as it was originally organized under the Corporation Code and became a government corporation only after LRTA's acquisition, and even then, METRO is without an original charter. The Court rejected pleas to pierce the corporate veil of METRO in LRTA vs. Venus, finding no badges of fraud or any wrongdoing. Under the prism of this ruling, the Court concluded that the Third Division ruling is not contradictory to or in conflict with the present ruling, and vice versa.

• Res Judicata: The Court found the principle of res judicata inapplicable. The doctrine applies if the following requisites are present: (a) the former judgment must be final; (b) the court which rendered it had jurisdiction over the subject matter and the parties; (c) the judgment must be on the merits; and (d) there must be between the first and second actions identity of parties, subject matter and causes of action. The Court found no identity of parties in METRO vs. PIGLAS and the present case, given the distinctive personalities of METRO and LRTA as discussed in LRTA vs. Venus. METRO litigated for its own interests, not for LRTA's, in CA-G.R. SP. No. 95665, and could not have spoken in representation of LRTA. METRO assailed via a Rule 65 certiorari petition the dismissal of its own appeal, a remedy separate and distinct from LRTA's. Any decision that the CA would render in CA-G.R. SP. No. 95665 would bind only the parties to the proceedings — METRO and PIGLAS, et al. — and no other.

• Jurisdiction over LRTA: The Court emphasized that the LRTA, as shown in LRTA vs. Venus, is beyond the labor arbiter's jurisdiction, a situation peculiar to LRTA. As the labor arbiter had no jurisdiction over LRTA when he heard the illegal dismissal case, the NLRC also has no jurisdiction over LRTA at the appellate level. Any act done without jurisdiction is void and has no legal effect. The patent nullity of the NLRC's action exempts the LRTA from the traditional requirement of filing a motion for reconsideration before recourse to a Rule 65 certiorari petition may be made validly. This is a circumstance peculiar to LRTA that METRO cannot validly invoke to justify its failure to file the required motion for reconsideration.

• Appeal Bond Requirement: The Court found it unnecessary to discuss LRTA's compliance with the appeal bond requirement, given the conclusion that the labor arbiter and the NLRC have no jurisdiction over LRTA. The nullity of the labor arbiter's decision and the resulting nullity of all NLRC actions on the case for lack of jurisdiction over LRTA effectively rendered the appeal bond issue moot. Any ruling on the issue, separately from the jurisdictional considerations, would have no practical value.

• Non-Legal Considerations: The Court responded to the petitioners' non-legal sentiment by reiterating that no conflict exists between the Third Division's ruling and the Second Division's ruling. The Court ruled differently because it was faced by different factual and legal situations. The Court stated that it does not decide legal controversies on non-legal considerations, and its task is to say what the law is on every case that comes before it.

• Res Judicata — The doctrine of res judicata applies if the following requisites are present: (a) the former judgment must be final; (b) the court which rendered it had jurisdiction over the subject matter and the parties; (c) the judgment must be on the merits; and (d) there must be between the first and second actions identity of parties, subject matter and causes of action. In this case, the Court held the doctrine inapplicable for lack of identity of parties, as METRO and LRTA are separate and distinct juridical entities, and METRO could not have spoken in representation of LRTA.

• Separate Juridical Personality of Government Corporations — A government-owned and controlled corporation with an original charter is subject to the Civil Service Law and not the Labor Code, and is beyond the jurisdiction of the labor arbiter and the NLRC. METRO, originally organized under the Corporation Code, is covered by the Labor Code despite LRTA's subsequent acquisition thereof, as it is without an original charter. The distinctive personalities of METRO and LRTA mean that the LRTA cannot be held liable for employment-related obligations to METRO employees.

• Nullity of Acts Without Jurisdiction — Any act done without jurisdiction is void and has no legal effect. The NLRC's exercise of jurisdiction over LRTA cannot produce legal effects because they are patently null and void. The patent nullity of the NLRC's action exempts the LRTA from the traditional requirement of filing a motion for reconsideration before recourse to a Rule 65 certiorari petition may be made validly.

• "The doctrine of res adjudicata applies if the following requisites are present: (a) the former judgment must be final; (b) the court which rendered it had jurisdiction over the subject matter and the parties; (c) the judgment must be on the merits; and (d) there must be between the first and second actions identity of parties, subject matter and causes of action." — This passage states the canonical formulation of the requisites for res judicata, which the Court applied to find the doctrine inapplicable for lack of identity of parties.

• "To be sure, there is no identity of parties in METRO v. PIGLAS (decided by the Third Division of the Court) and the present case (PIGLAS v. LRTA), given the distinctive personalities of METRO and LRTA as discussed in LRTA v. Venus and explained above. METRO litigated for its own interests, not for LRTA's, in CA-G.R. SP. No. 95665, and could not have spoken in representation of LRTA." — This passage articulates the core reason for rejecting the petitioners' res judicata argument: the separate juridical personalities of METRO and LRTA preclude identity of parties.

• "Any act done without jurisdiction is void and has no legal effect." — This passage states the principle underlying the Court's conclusion that the NLRC's exercise of jurisdiction over LRTA cannot produce legal effects because they are patently null and void, which in turn exempted LRTA from the motion for reconsideration requirement.

• LRTA vs. Venus, G.R. Nos. 163782 and 163881, March 24, 2006, 485 SCRA 36 — Controlling precedent establishing that LRTA and METRO are two separate and distinct entities, that employment in LRTA is governed by civil service rules and not the Labor Code, and that the DOLE has jurisdiction over disputes arising from METRO's employment of its workers. The Court relied heavily on this ruling in resolving the present case.

• Miguel vs. JGT Group, Inc., G.R. No. 157752, March 16, 2005, 455 SCRA 529 — Cited by the CA in relaxing the appeal bond requirement, relied upon for the ruling that substantial justice is better served by ruling on the merits of the case.

• Cruz vs. Court of Appeals, G.R. No. 164797, February 13, 2006, 482 SCRA 379 — Cited as authority for the requisites of the doctrine of res judicata.

• Arcelona vs. Court of Appeals, G.R. No. 102900, October 2, 1997, 280 SCRA 20 — Cited for the principle that any act done without jurisdiction is void and has no legal effect.

• Article 223, Labor Code — Provides that in case of judgment involving a monetary award, an appeal by the employer would require a bond in the amount equivalent to the monetary award in the judgment appealed from. The NLRC relied on this provision in allowing METRO to appeal without a separate bond, reasoning that the property bond put up by LRTA would already be equivalent to the monetary award.

• Executive Order No. 603, s. 1980 — The original charter of the LRTA, which establishes it as a government-owned and controlled corporation subject to the Civil Service Law and not the Labor Code, placing it beyond the jurisdiction of the labor arbiter and the NLRC.

• Rule 39, Section 47(b) and (c), Rules of Court — Cited in support of the proposition that any decision rendered in CA-G.R. SP. No. 95665 would bind only the parties to those proceedings, and only those parties can appeal from an unfavorable decision.

The resolution was witnessed by Honorable Leonardo A. Quisumbing (Chairperson), Honorable Conchita Carpio Morales, Honorable Minita Chico-Nazario (designated additional member per S.O. No. 658), Honorable Arturo D. Brion, and Honorable Teresita L. De Castro (designated additional member per S.O. No. 635), Members, Second Division.

N/A — The text does not mention any dissenting opinion.