SAMASAH-NUWHRAIN vs. Magsalin

Decisions or awards of voluntary arbitrators are appealable to the Court of Appeals via petition for review under Rule 43 of the 1997 Rules of Civil Procedure, not via petition for certiorari under Rule 65; and an employee validly dismissed for serious misconduct is not entitled to financial assistance or separation pay on grounds of social justice or equity.

Petitioner Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL is a duly registered labor union and the certified bargaining representative of the rank-and-file employees of Hyatt Regency Manila, a five-star hotel owned and operated by respondent Hotel Enterprises of the Philippines, Inc. The hotel maintained a Code of Discipline governing employee conduct, including provisions on security inspections, insubordination, and a provision (OSDA 4.32) treating the commission of three different acts of misconduct within a twelve-month period as serious misconduct warranting dismissal. The dispute arose from the dismissal of Angelito Caragdag, a hotel waiter and union director, whose termination was upheld by a Voluntary Arbitrator but who was nonetheless awarded ₱100,000 in financial assistance on humanitarian grounds.

Petitioner Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL is a duly registered union and the certified bargaining representative of the rank-and-file employees of Hyatt Regency Manila, a five-star hotel owned and operated by respondent Hotel Enterprises of the Philippines, Inc. On January 31, 2001, Hyatt's General Manager, David C. Pacey, issued a Memorandum informing all hotel employees that hotel security had been instructed to conduct thorough bag inspection and body frisking at every entrance and exit of the hotel, and enjoined employees to comply. Copies were furnished the petitioner.

On February 3, 2001, Angelito Caragdag, a waiter at the hotel's Cafe Al Fresco restaurant and a union director, refused to be frisked by security personnel. The Human Resources Department (HRD) issued a Memorandum on February 5, 2001 requiring him to explain in writing within 48 hours why no disciplinary action should be taken. The following day, February 6, 2001, Caragdag again refused to be frisked, prompting another Memorandum from the HRD on February 8, 2001. On February 14, 2001, the HRD imposed on Caragdag the penalty of reprimand for the February 3 incident (first offense) and a three-day suspension for the February 6 incident (second offense), both in accordance with the hotel's Code of Discipline.

On February 22, 2001, another incident occurred. When Mike Moral, manager of Cafe Al Fresco and Caragdag's immediate superior, was about to counsel two staff members, Larry Lacambacal and Allan Alvaro, at the training room, Caragdag suddenly opened the door and yelled at the two with an enraged look, saying, "Ang titigas talaga ng ulo n'yo. Sinabi ko na sa inyo na huwag kayong makikipagusap sa management habang ongoing pa ang kaso!" Moral informed Caragdag that he was simply talking to his staff and that Caragdag had no right to interrupt and intimidate him during the counseling session. Caragdag was required to explain, and he submitted a written explanation on February 25, 2001, narrating that he had been informed someone told him Lacambacal and Alvaro were requesting assistance because Moral had invited them to the training room. He went to advise them that they should be accompanied by a union officer before giving any statement. Moral found the explanation unsatisfactory and, on February 28, 2001, held Caragdag liable under OSDA 3.01 of the hotel's Code of Discipline for "threatening, intimidating, coercing, and provoking to a fight your superior for reasons directly connected with his discharge of official duty," imposing a seven-day suspension.

On March 2, 2001, Caragdag committed yet another infraction: he left his work assignment during official hours at 9:35 a.m. without prior permission from his Department Head. His explanation was found unsatisfactory, and on March 17, 2001, Moral found him liable for violating OSDA 3.07, "leaving work assignment during official working hours without prior permission from the department head or immediate superior," and suspended him for three days. Because of the succession of infractions, the HRD required Caragdag on May 11, 2001 to explain why OSDA 4.32 — committing offenses penalized with three suspensions during a 12-month period — should not be enforced against him. An investigation board was formed, and a hearing was set for May 19, 2001, but despite notice, both Caragdag and the Union President failed to attend. The investigating board resolved on that date to dismiss Caragdag for violation of OSDA 4.32. His appeal was heard on May 24, 2001, but the board affirmed its resolution. On June 1, 2001, the hotel sent Caragdag a Notice of Dismissal.

The dismissal was questioned by the petitioner, and the dispute was referred to voluntary arbitration. On May 6, 2002, the Voluntary Arbitrator ruled that the three separate suspensions were valid, the dismissal was legal, and OSDA 4.32 was reasonable, but ordered the hotel to grant ₱100,000 in financial assistance to Caragdag on humanitarian considerations. Both parties sought reconsideration, which was denied on May 26, 2003. Petitioner then filed a petition for certiorari before the CA, which was dismissed outright as an improper mode of appeal. Separately, respondent filed a petition for review with the CA, which affirmed the Voluntary Arbitrator's decision but deleted the financial assistance award. The Voluntary Arbitrator found that Caragdag's various violations — refusal to submit to security inspections, threatening and intimidating a superior, and leaving his work assignment without permission — constituted serious misconduct under OSDA 4.32, committed within a period of a little over one month.

• Proper Mode of Appeal: Petitioner argued that because decisions rendered by voluntary arbitrators are issued under Title VII-A of the Labor Code, they are not covered by Rule 43 of the 1997 Rules of Civil Procedure by express provision of Section 2 thereof, which states that Rule 43 "shall not apply to judgments or final orders issued under the Labor Code of the Philippines." Hence, a petition for certiorari under Rule 65 is the proper remedy, and the CA erred in declaring the petition was filed out of time since it was filed within the 60-day reglementary period for Rule 65 petitions.
• Entitlement to Financial Assistance: Petitioner maintained that Caragdag is entitled to financial assistance in the amount of ₱100,000 on humanitarian considerations, stressing that his infractions were due to his being a union officer and his acts did not show moral depravity. Petitioner also argued that while financial assistance is typically given only for dismissals under Articles 283 and 284 of the Labor Code, the Court has by way of exception allowed the grant of financial assistance to an employee dismissed for just causes based on equity.

• Proper Mode of Appeal: Respondent maintained that the CA acted correctly in dismissing the petition for certiorari for being the wrong mode of appeal, stressing that Section 1 of Rule 43 clearly states it is the governing rule for appeals from awards, judgments, final orders, or resolutions of voluntary arbitrators, who are considered included in the term "quasi-judicial instrumentalities."
• No Financial Assistance for Serious Misconduct: Respondent asserted that the CA correctly deleted the award of financial assistance, considering that Caragdag was found guilty of serious misconduct and other acts adversely reflecting on his moral character. Respondent stressed that Caragdag's willful defiance of the hotel's security policy, disrespect and intimidation of a superior, and unjustifiable desertion of his work assignment during working hours without permission patently showed serious and gross misconduct as well as amoral character.

• Proper Mode of Appeal: Whether the Court of Appeals erred in dismissing outright the petition for certiorari filed before it on the ground that the same is an improper mode of appeal from a voluntary arbitrator's decision.
• Financial Assistance: Whether the Court of Appeals erred in deleting the award of financial assistance in the amount of ₱100,000 to Angelito Caragdag.

• Proper Mode of Appeal: No. The CA correctly dismissed the petition for certiorari as an improper mode of appeal. Decisions or awards of voluntary arbitrators are appealable to the CA via petition for review under Rule 43, not via petition for certiorari under Rule 65, and the petition was filed beyond the 15-day reglementary period.
• Financial Assistance: No. The CA correctly deleted the financial assistance award. An employee validly dismissed for serious misconduct, or for causes reflecting adversely on moral character, is not entitled to financial assistance or separation pay on grounds of social justice or equity.

• Proper Mode of Appeal: The Court reaffirmed the settled doctrine, tracing from Luzon Development Bank vs. Association of Luzon Development Bank Employees and reiterated in Alcantara, Jr. vs. Court of Appeals and Nippon Paint Employees Union-Olalia vs. Court of Appeals, that decisions or awards of voluntary arbitrators are appealable to the CA via petition for review under Rule 43, consistent with the purpose of providing a uniform procedure for the appellate review of adjudications of all quasi-judicial entities. Petitioner's reliance on Section 2 of Rule 43, which excludes judgments or final orders issued under the Labor Code, was rejected. The Court explained that Section 2 is a reiteration of the exception to the exclusive appellate jurisdiction of the CA under Section 9 of Batas Pambansa Blg. 129, as amended, but the decisions of voluntary arbitrators issued pursuant to the Labor Code do not come within the ambit of that exception. Sections 1, 3, and 4 of Rule 43 expressly include voluntary arbitrators authorized by law among the quasi-judicial agencies whose decisions are appealable under that Rule, with a 15-day reglementary period from notice of the award, judgment, final order, or resolution, or from the denial of a motion for new trial or reconsideration. Since petitioner received the Voluntary Arbitrator's Resolution denying its motion for reconsideration on May 26, 2003, it should have filed a petition for review within 15 days, not a petition for certiorari under Rule 65. The Court declined to apply a liberal interpretation of the rules, emphasizing that procedural rules exist for a noble purpose and must be conscientiously observed.

• Financial Assistance: The Court applied the doctrine established in Phil. Long Distance Telephone Co. vs. NLRC, holding that separation pay or financial assistance as a measure of social justice shall be allowed only when the employee is validly dismissed for causes other than serious misconduct or those reflecting on the employee's moral character. A contrary rule would reward rather than punish the erring employee. The Court found that Caragdag's dismissal was due to several instances of willful disobedience to reasonable rules and regulations prescribed by his employer: refusal to submit to bag inspection and body frisking, threatening and intimidating a superior, and leaving his work assignment without permission. The Voluntary Arbitrator found these constituted serious misconduct under OSDA 4.32, committed not even over twelve months but in a little over one month. Applying Piedad vs. Lanao del Norte Electric Cooperative, Inc., the Court ruled that a series of irregularities when put together may constitute serious misconduct, which under Article 282 of the Labor Code is a just cause for dismissal. Because the dismissal was due to serious misconduct, Caragdag was not entitled to financial assistance, as social justice is extended only to those who deserve its compassion.

• Appeal from Voluntary Arbitrator Decisions — Decisions or awards of voluntary arbitrators are appealable to the Court of Appeals via petition for review under Rule 43 of the 1997 Rules of Civil Procedure, not via petition for certiorari under Rule 65. This is consistent with the purpose of providing a uniform procedure for the appellate review of adjudications of all quasi-judicial entities. Section 2 of Rule 43, which excludes judgments or final orders issued under the Labor Code, does not apply to voluntary arbitrator decisions because the exception under Section 9 of B.P. Blg. 129 does not encompass decisions of voluntary arbitrators issued pursuant to the Labor Code. The reglementary period is 15 days from notice of the award, judgment, final order, or resolution, or from denial of a motion for reconsideration.

• Financial Assistance for Employees Dismissed for Just Cause — Separation pay or financial assistance as a measure of social justice shall be allowed only when the employee is validly dismissed for causes other than serious misconduct or those reflecting adversely on the employee's moral character. Where the reason for valid dismissal is serious misconduct or an offense involving moral turpitude, the employer may not be required to give separation pay or financial assistance. Social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged; compassion for the poor is imperative only when the recipient is not a rascal claiming an undeserved privilege.

• Serious Misconduct as Just Cause for Dismissal — Under Article 282 of the Labor Code, serious misconduct is a just cause for dismissal. A series of irregularities, when put together, may constitute serious misconduct. An employer's Code of Discipline provision treating the commission of three different acts of misconduct within a twelve-month period as serious misconduct is a reasonable rule that may validly serve as basis for dismissal.

• "The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty." — This passage, quoted from PLDT vs. NLRC, articulates the canonical formulation of the principle that social justice cannot shield employees dismissed for serious misconduct from the consequences of their wrongdoing, and is frequently cited in subsequent labor jurisprudence on financial assistance.

• "The provisions may be new to the Rules of Court but it is far from being a new law. Section 2, Rules 42 of the 1997 Rules of Civil Procedure, as presently worded, is nothing more but a reiteration of the exception to the exclusive appellate jurisdiction of the Court of Appeals, as provided for in Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902." — This passage, quoted from Alcantara, Jr. vs. Court of Appeals, explains why Section 2 of Rule 43 does not exclude voluntary arbitrator decisions from its coverage, resolving the persistent misconception that Labor Code-issued judgments are exempt from Rule 43 appeals.

• "Procedural rules are not to be disdained as mere technicalities. They may not be ignored to suit the convenience of a party. Adjective law ensures the effective enforcement of substantive rights through the orderly and speedy administration of justice." — This passage states the Court's rationale for refusing to apply a liberal interpretation of procedural rules in favor of the petitioner, reinforcing the principle that rules of procedure must be conscientiously observed.

• Luzon Development Bank vs. Association of Luzon Development Bank Employees, 319 Phil. 262 (1995) — Controlling precedent establishing that decisions or awards of voluntary arbitrators are appealable to the CA via petition for review under Rule 43, in line with the procedure for uniform appellate review of quasi-judicial adjudications.
• Alcantara, Jr. vs. Court of Appeals, 435 Phil. 395 (2002) — Reiterated the Luzon Development Bank ruling and explained that Section 2 of Rule 43 does not exempt voluntary arbitrator decisions from Rule 43 coverage, as it merely restates the exception under Section 9 of B.P. Blg. 129.
• Nippon Paint Employees Union-Olalia vs. Court of Appeals, G.R. No. 159010, November 19, 2004, 443 SCRA 286 — Further reiterated the rule on the proper mode of appeal from voluntary arbitrator decisions.
• Phil. Long Distance Telephone Co. vs. NLRC, No. L-80609, August 23, 1988, 164 SCRA 671 — Controlling precedent establishing that separation pay or financial assistance as social justice is available only to employees validly dismissed for causes other than serious misconduct or those reflecting adversely on moral character.
• Piedad vs. Lanao del Norte Electric Cooperative, Inc., No. L-73735, August 31, 1987, 153 SCRA 500 — Applied to support the proposition that a series of irregularities when put together may constitute serious misconduct under Article 282 of the Labor Code.
• Philippine Commercial International Bank vs. Abad, G.R. No. 158045, February 28, 2005, 452 SCRA 579 — Cited by the CA as basis for deleting the financial assistance award, holding that such assistance is awarded only when the dismissal was not due to serious misconduct or causes reflecting adversely on moral character.
• Samahan ng mga Manggagawa sa Hyatt-NUWHRAIN-APL vs. Bacungan, G.R. No. 149050, March 25, 2009, 582 SCRA 369 — Cited by the Court as recent reiteration of the settled rule on the proper mode of appeal from voluntary arbitrator decisions.

• Section 1, Rule 43, 1997 Rules of Civil Procedure — Defines the scope of Rule 43 as applying to appeals from awards, judgments, final orders, or resolutions of quasi-judicial agencies, expressly including voluntary arbitrators authorized by law. Applied to establish that the proper mode of appeal from the Voluntary Arbitrator's decision is a petition for review under Rule 43.
• Section 2, Rule 43, 1997 Rules of Civil Procedure — Provides that Rule 43 shall not apply to judgments or final orders issued under the Labor Code. Petitioner invoked this provision, but the Court held it does not exempt voluntary arbitrator decisions from Rule 43 coverage.
• Sections 3 and 4, Rule 43, 1997 Rules of Civil Procedure — Provide that an appeal under Rule 43 shall be taken to the CA within 15 days from notice of the award, judgment, final order, or resolution, or from denial of a motion for new trial or reconsideration. Applied to determine that petitioner's petition was filed out of time.
• Article 282, Labor Code of the Philippines — Defines serious misconduct as a just cause for termination of employment. Applied to uphold the validity of Caragdag's dismissal and to deny financial assistance.
• Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902 — Defines the exclusive appellate jurisdiction of the CA over final judgments of quasi-judicial agencies, with an exception for those falling within the appellate jurisdiction of the Supreme Court under the Labor Code. The Court explained that this exception does not encompass decisions of voluntary arbitrators.

Conchita Carpio Morales (Chairperson), Arturo D. Brion, Lucas P. Bersamin, and Roberto A. Abad (designated additional member per Special Order No. 997 dated June 6, 2011). No separate concurring opinions were written.