Silva vs. National Labor Relations Commission

A motion for reconsideration of an NLRC resolution must be filed within the 10-day reglementary period; a late motion is a jurisdictional and mandatory defect that does not prevent the resolution from becoming final, and the NLRC commits grave abuse of discretion in entertaining it. RA 6715’s re-apportionment of jurisdiction over CBA-related ULP cases is not a curative statute and is not applied retroactively to a complaint filed before its effectivity, so the Labor Arbiter and NLRC retain jurisdiction.

Petitioners were former rank-and-file employees of Philtread and members of the Philtread Workers Union; their retrenchment was governed by a CBA that contained a priority re-employment clause. The dispute required the SC to apply the Labor Code’s 10-day finality rule for NLRC resolutions and to determine whether RA 6715, the Herrera-Veloso Amendments, retroactively re-apportioned jurisdiction over CBA-related ULP cases to the voluntary arbitrator.

In 1985, petitioners were rank-and-file employees of Philtread and members of the Philtread Workers Union when they volunteered for the company’s retrenchment program. They availed of the program on the understanding that they would have priority in re-employment if the company recovered, in accordance with Section 4, Article III of the CBA concluded on July 5, 1983.

In November 1986, Philtread expanded operations and hired new personnel. Petitioners applied, but Philtread merely agreed to consider them for future vacancies; their demands and the incumbent union’s request to stop hiring new personnel until petitioners were first hired were ignored. On December 5, 1988, petitioners lodged a complaint with the NCR Arbitration Branch of the NLRC for unfair labor practice, damages, and attorney’s fees, docketed as NLRC-NCR Case No. 12-04975-88.

Philtread moved to dismiss on the grounds that the NLRC lacked jurisdiction because there was no employer-employee relationship and the basic issue was CBA interpretation cognizable by regular courts, and that petitioners lacked locus standi as they were not privy to the CBA. Petitioners countered that the complaint was for ULP arising from Philtread’s unjust and unreasonable refusal to re-employ them under Section 4, Article III of the 1986 and 1983 CBAs, and that the NLRC had jurisdiction under Article 217(a)(1) of the Labor Code.

On August 31, 1989, Labor Arbiter Edgardo M. Madriaga dismissed the complaint but directed Philtread to give petitioners priority in hiring, as well as similarly situated former employees, for available positions provided they met current qualifications. The Labor Arbiter did not tackle the jurisdictional issue and ruled solely on whether petitioners were entitled to priority under the CBA. Petitioners appealed to the NLRC; Philtread did not appeal. On April 15, 1992, the NLRC reversed the Labor Arbiter and directed Philtread to re-employ petitioners and other similarly situated employees regardless of age qualifications and other pre-employment conditions, subject only to existing vacancies and a finding of good physical condition. The resolution was received by Atty. Abraham B. Borreta of Borreta, Gutierrez and Leogardo on May 5, 1992, as shown by the bailiff’s return.

On May 20, 1992, Atty. Borreta filed an ex parte manifestation returning the copy and claiming it was erroneously served on him; he alleged that Atty. Daniel C. Gutierrez had exclusively handled the case for Philtread and that the law firm had been dissolved. On June 5, 1992, Philtread filed a motion for reconsideration. Petitioners, believing the April 15 resolution had been properly served on the firm and that no timely motion for reconsideration had been filed, moved for execution.

On November 18, 1992, the NLRC, acting on Atty. Gutierrez’s motion for reconsideration, issued a resolution dismissing the complaint. Petitioners moved for reconsideration. On April 7, 1993, the NLRC affirmed its November 18, 1992 resolution. Hence, this petition.

• Finality of the April 15, 1992 Resolution: Petitioners argued that the April 15, 1992 resolution became final and executory because Philtread failed to file a motion for reconsideration within the 10-day reglementary period under Article 223 of the Labor Code; the bailiff’s return showed receipt by the law firm of Borreta, Gutierrez and Leogardo on May 5, 1992, so the period expired on May 15, 1992, and the NLRC acted irregularly and capriciously in still allowing reconsideration.
• NLRC Jurisdiction over the ULP Complaint: Petitioners maintained that their complaint was for unfair labor practice arising from Philtread’s unjust and unreasonable refusal to re-employ them under Section 4, Article III of the 1986 and 1983 CBAs, and that the NLRC had jurisdiction under Article 217(a)(1) of the Labor Code.
• Non-Retroactivity of RA 6715: Petitioners argued that the NLRC’s reliance on Article 261 was erroneous because it cited the amended provision; RA 6715 took effect only on March 21, 1989, after the complaint was filed on December 5, 1988, and the amendment could not retroactively divest the Labor Arbiter of jurisdiction already acquired under Articles 217 and 248 of the Labor Code.

• Lack of Jurisdiction and Employer-Employee Relationship: Philtread moved to dismiss on the ground that the NLRC lacked jurisdiction because there was no employer-employee relationship between it and petitioners and the basic issue was the interpretation of a contract, the CBA, which was cognizable by the regular courts.
• Locus Standi: Philtread argued that petitioners had no locus standi because they were not privy to the CBA executed between the union and Philtread.
• Voluntary Arbitrator Jurisdiction and Void Judgment: Philtread claimed that jurisdiction lay with the voluntary arbitrator, so the Labor Arbiter and NLRC decisions were null and void and incapable of attaining finality; consequently, the 10-day period could not have started running and its motion for reconsideration was not late.
• Improper Service on Counsel: Philtread claimed that Atty. Gutierrez exclusively represented it and that the law firm of Borreta, Gutierrez and Leogardo had been dissolved, making service on Atty. Borreta improper.

• Finality and Late Motion for Reconsideration: Whether the NLRC gravely abused its discretion in entertaining a motion for reconsideration filed 31 days after receipt of its April 15, 1992 resolution.
• Jurisdiction over the ULP Complaint: Whether the Labor Arbiter and NLRC had jurisdiction over petitioners’ ULP complaint, rather than the voluntary arbitrator.
• Retroactive Application of RA 6715: Whether RA 6715 applies retroactively to divest the Labor Arbiter and NLRC of jurisdiction over the complaint filed on December 5, 1988.
• Propriety of Service on Counsel: Whether service of the April 15, 1992 resolution on the law firm of Borreta, Gutierrez and Leogardo was proper.

• Finality and Late Motion for Reconsideration: Yes. The NLRC gravely abused its discretion. Philtread’s motion for reconsideration was filed on June 5, 1992, 31 days after receipt on May 5, 1992, beyond the 10-day period under Article 223 of the Labor Code and Section 14, Rule VII of the NLRC Rules; the late motion did not forestall finality.
• Jurisdiction over the ULP Complaint: Yes. The Labor Arbiter and NLRC had jurisdiction. The voluntary arbitrator’s jurisdiction over CBA interpretation or implementation requires a dispute between the union and the employer; petitioners are individual employees, not the union.
• Retroactive Application of RA 6715: No. RA 6715’s re-apportionment of jurisdiction over CBA-related ULP cases is not a curative statute and is not applied retroactively; the Labor Arbiter’s jurisdiction attached when the complaint was filed on December 5, 1988.
• Propriety of Service on Counsel: Yes. Service on the law firm of Borreta, Gutierrez and Leogardo was proper because the firm remained counsel of record; Philtread did not withdraw the firm’s appearance, and its notice of change of address still used the firm’s name.

• Finality and Late Motion for Reconsideration: The SC began from the rule that the seasonable filing of a motion for reconsideration within the 10-day reglementary period from receipt of an NLRC order, resolution, or decision is mandatory to forestall finality. The statutory bases are Article 223 of the Labor Code and Section 14, Rule VII of the New Rules of Procedure of the NLRC. The bailiff’s return showed that Atty. Borreta of Borreta, Gutierrez and Leogardo received the April 15, 1992 resolution on May 5, 1992. Philtread filed its motion for reconsideration only on June 5, 1992, or 31 days after receipt. The NLRC should have dismissed the motion outright. Its contrary act was whimsical and capricious and showed disregard for its own rules, so certiorari lay. While the NLRC is not bound by rigid technical rules under Article 221, the filing of a motion for reconsideration and filing it on time are jurisdictional and mandatory requirements, not mere technicalities; no peculiar circumstances warranted departure.
• Jurisdiction over the ULP Complaint: The SC rejected the simplistic view that a CBA interpretation or implementation issue automatically falls under the voluntary arbitrator. Under Sanyo Philippines Workers Union-PSSLU vs. Canizares, the voluntary arbitrator’s jurisdiction over CBA grievances requires that the disputants be the union and the employer; only disputes involving the union and the company are referred to the grievance machinery or voluntary arbitrators. Here, the contending parties were petitioners, individual former employees, and Philtread, not the union and Philtread. Thus, despite Philtread’s claim that the real issue was the CBA re-employment clause, the voluntary arbitrator could not assume jurisdiction. The Labor Arbiter and NLRC had jurisdiction over the ULP complaint.
• Retroactive Application of RA 6715: The SC reviewed the jurisdiction provisions. At the time of the December 5, 1988 complaint, Article 217(a)(1) gave Labor Arbiters original and exclusive jurisdiction over ULP cases, and Article 248(i) made violation of a CBA an employer ULP. RA 6715, effective March 21, 1989, amended Articles 217, 261, and 262. It narrowed the Labor Arbiter’s jurisdiction over CBA violations: non-gross CBA violations became grievances, and for a ULP case to be cognizable by the Labor Arbiter and NLRC, the complaint must prima facie show (1) a gross violation of the CBA and (2) that the violation pertains to the CBA’s economic provisions. The SC had held in Briad Agro Development Corporation vs. Dela Cerna that RA 6715 is curative and retroactive where it cured overlapping jurisdiction between Labor Arbiters and Regional Directors over money claims. But the SC found Briad’s rationale inapplicable. Following Erectors, Inc. vs. National Labor Relations Commission, jurisdiction over the subject matter is determined by the law in force at the commencement of the action; laws are applied prospectively unless retroactivity is expressly declared or necessarily implied. Here, there was no defect or overlapping jurisdiction to cure: CBA interpretation and implementation and company personnel policies were always with the voluntary arbitrator, while ULP cases were exclusively with the Labor Arbiter. RA 6715 merely re-apportioned jurisdiction over ULP cases not involving gross violation of a CBA economic provision—a change in policy, not a curative statute. The SC also noted that petitioners’ allegations of bad faith and unjust refusal to re-employ were unsubstantiated conclusions, not a gross CBA violation, and it was doubtful whether the re-employment clause was an economic provision; but because RA 6715 was not retroactive here, the Labor Arbiter’s jurisdiction attached at filing on December 5, 1988.
• Propriety of Service on Counsel: The SC found the claim that Atty. Gutierrez exclusively represented Philtread and that the firm had been dissolved to be lame excuses. The record contained a Notice of Change of Address dated March 12, 1990, filed by Atty. Gutierrez, stating that Philtread’s counsel was Borreta, Gutierrez and Leogardo with address at 3rd Floor, Commodore Condominium Arquiza corner M. Guerrero Streets, Ermita, Manila. If Atty. Gutierrez had exclusively represented Philtread, he would not have used the firm’s name and new address. Atty. Borreta took 15 days to file his manifestation and did not immediately object to service. As former partners, Borreta should have advised Gutierrez of receipt. As a lawyer, receipt of the adverse resolution should have alerted him to the consequences of inaction. If the firm was dissolved, Gutierrez should not have used its name or should have withdrawn the firm’s appearance and entered his own. Having failed to do either, Philtread could not blame the NLRC for serving at the firm’s address still on record. The excuses could not camouflage a ploy to gain a last chance to move for reconsideration.

• Seasonable motion for reconsideration as jurisdictional and mandatory — Under Article 223 of the Labor Code and Section 14, Rule VII of the NLRC Rules, a motion for reconsideration of an NLRC resolution must be filed within 10 calendar days from receipt; the period is not a mere technicality, and a late motion does not forestall finality. The SC applied this because Philtread filed its motion 31 days after receipt, so the NLRC gravely abused its discretion in entertaining it.
• Voluntary arbitrator jurisdiction limited to union-employer disputes — A CBA interpretation or implementation issue does not automatically fall within the voluntary arbitrator’s jurisdiction; the disputants must be the union and the employer. The SC applied this because petitioners were individual former employees, not the union, so the Labor Arbiter and NLRC had jurisdiction.
• Prospective application of jurisdiction laws; curative statute exception — Jurisdiction over the subject matter is determined by the law in force at the commencement of the action, and a later law is not applied retroactively unless it is curative or retroactivity is expressly declared or necessarily implied. The SC applied this by holding that RA 6715’s re-apportionment of CBA-related ULP jurisdiction was a change in policy, not a curative statute, so it did not divest the Labor Arbiter of jurisdiction over the complaint filed on December 5, 1988.
• Requisites for Labor Arbiter jurisdiction over CBA-related ULP after RA 6715 — For a ULP case to be cognizable by the Labor Arbiter and NLRC after RA 6715, the complaint must prima facie show (1) a gross violation of the CBA and (2) that the violation pertains to the economic provisions of the CBA. The SC discussed this but did not apply it retroactively to the present complaint.
• Void judgment cannot attain finality only if the tribunal lacks jurisdiction — The rule that a void judgment cannot attain finality applies only where the tribunal or body taking cognizance indeed lacks jurisdiction. The SC applied this by holding that the Labor Arbiter and NLRC had jurisdiction, so Philtread’s void-judgment argument failed and the April 15, 1992 resolution could become final.
• Service on counsel of record; withdrawal of appearance — Service on the law firm of record is proper until the firm withdraws its appearance or the client enters a new counsel; a party cannot benefit from its own failure to withdraw. The SC applied this by upholding service on Borreta, Gutierrez and Leogardo despite the claim that the firm had been dissolved and that Atty. Gutierrez exclusively represented Philtread.

• "the seasonable filing of a motion for reconsideration within the l0-day reglementary period following the receipt by a party of any order, resolution or decision of the NLRC, is a mandatory requirement to forestall the finality of such order, resolution or decision." — The SC states the mandatory finality rule that Philtread’s late motion violated.
• "However, the filing of a motion for reconsideration and filing it ON TIME are not mere technicalities of procedure. These are jurisdictional and mandatory requirements which must be strictly complied with." — The SC rejects the NLRC’s relaxed procedure and treats the 10-day period as jurisdictional.
• "When the issue concerns an interpretation or implementation of the CBA, one cannot immediately jump to the conclusion that jurisdiction is with the voluntary arbitrator. There is an equally important need to inquire further if the disputants involved are the union and the employer; otherwise, the voluntary arbitrator cannot assume jurisdiction." — The SC limits voluntary arbitrator jurisdiction to union-employer disputes, which petitioners’ individual complaint was not.
• "There is here no overlapping of jurisdiction to speak of because matters involving interpretation and implementation of CBA provisions, as well as interpretation and enforcement of company personnel policies, have always been determined by the Voluntary Arbitrator even prior to RA 6715. Similarly, all ULP cases were exclusively within the jurisdiction of the Labor Arbiter. What RA 6715 merely did was to re-apportion the jurisdiction over ULP cases by conferring exclusive jurisdiction over such ULP cases that do not involve gross violation of a CBA's economic provision upon the voluntary arbitrator." — The SC explains why RA 6715 is not a curative statute and should not be retroactively applied to divest the Labor Arbiter.

• Sanyo Philippines Workers Union-PSSLU vs. Canizares, 211 SCRA 361 (1992) — Controlling precedent, followed; held that only disputes involving the union and the company are referred to the grievance machinery or voluntary arbitrators.
• Briad Agro Development Corporation vs. Dela Cerna, 179 SCRA 269 (1989) — Discussed and distinguished; held RA 6715 curative and retroactive where it cured overlapping jurisdiction over money claims, but its rationale was not applied because no such defect existed here.
• Erectors, Inc. vs. National Labor Relations Commission, 256 SCRA 629 (1996) — Followed; held that jurisdiction is determined by the law in force at the commencement of the action and that a later law not curative is not retroactively applied.

• Article 223, Labor Code — Provides that the NLRC decision is final and executory after 10 calendar days from receipt by the parties; applied to hold that the April 15, 1992 resolution became final because no timely motion for reconsideration was filed.
• Section 14, Rule VII, New Rules of Procedure of the NLRC — Requires a motion for reconsideration to be filed within 10 calendar days from receipt of the order, resolution, or decision; applied to Philtread’s June 5, 1992 motion, filed 31 days after the May 5, 1992 receipt.
• Article 221, Labor Code — States that the NLRC is not bound by rigid technical rules; invoked but held not to excuse the late motion for reconsideration, because the 10-day period is jurisdictional and mandatory.
• Article 217(a)(1), Labor Code (pre-RA 6715) — Vested Labor Arbiters with original and exclusive jurisdiction over ULP cases; applied because the complaint was filed on December 5, 1988, before RA 6715 took effect.
• Article 248(i), Labor Code — Made violation of a collective bargaining agreement an unfair labor practice of the employer; applied to characterize petitioners’ complaint at the time of filing.
• Articles 261 and 262, Labor Code (pre-RA 6715) — Governed grievance machinery and voluntary arbitration; construed in Sanyo to require a union-employer dispute, so they did not confer jurisdiction over petitioners’ individual complaint.
• Republic Act No. 6715 (Herrera-Veloso Amendments) — Effective March 21, 1989, amended Articles 217, 261, and 262 and re-apportioned jurisdiction over CBA-related ULP cases; held not curative and not retroactively applied to divest the Labor Arbiter of jurisdiction over the complaint filed on December 5, 1988.
• Article XIII, Section 3, 1987 Constitution — Adopts the preferential use of voluntary modes of dispute settlement; mentioned as the policy rationale for RA 6715’s re-apportionment, not as a basis for retroactive application.