St. Martin Funeral Home vs. NLRC

Petitions for certiorari under Rule 65 seeking judicial review of NLRC decisions must be initially filed with the Court of Appeals, not directly with the Supreme Court, in observance of the doctrine on hierarchy of courts, as all references to "appeals" from NLRC in amended Section 9 of B.P. Blg. 129 are deemed to mean such special civil actions.

The case emerges amid increasing labor disputes reaching the Supreme Court and legislative amendments to the Labor Code (P.D. No. 442) and the Judiciary Reorganization Act (B.P. Blg. 129), particularly R.A. No. 7902, which expanded the Court of Appeals' jurisdiction over quasi-judicial agencies but created ambiguity regarding review of NLRC decisions, prompting the Court to reassess the procedural mode of judicial review to alleviate its workload and ensure efficient adjudication.

Bienvenido Aricayos filed a complaint for illegal dismissal against St. Martin Funeral Home, claiming he started working as Operations Manager on February 6, 1995, without a formal contract or inclusion in payroll; he alleged dismissal on January 22, 1996, for misappropriating P38,000.00 intended for VAT payment to the BIR; St. Martin Funeral Home countered that Aricayos was not an employee but the uncle of owner Amelita Malabed, who voluntarily assisted in business operations out of gratitude after receiving financial aid from Malabed's mother while he was an overseas worker; after Malabed's mother died in January 1996, Amelita took over and discovered tax arrears despite records showing payments, leading to changes in operations that excluded Aricayos and his wife from management, prompting the complaint.

St. Martin Funeral Home argued that no employer-employee relationship existed with Aricayos, as he was merely a volunteer relative assisting the business without compensation or formal employment, and thus the labor arbiter correctly dismissed the complaint for lack of jurisdiction; it further contended that the NLRC committed grave abuse of discretion in setting aside the labor arbiter's decision and remanding the case without proper basis.

Bienvenido Aricayos argued that he was an employee as Operations Manager for nearly a year from February 6, 1995, to January 23, 1996, and his dismissal was illegal; he claimed the labor arbiter erred in disregarding his evidence, wrongly characterizing his work as voluntary, and ruling no employer-employee relationship existed, while the NLRC correctly remanded for further proceedings.

Procedural Issues: Whether petitions for certiorari under Rule 65 for judicial review of NLRC decisions should be filed directly with the Supreme Court or initially with the Court of Appeals, considering amendments under R.A. No. 7902 to B.P. Blg. 129 and the doctrine on hierarchy of courts. - Substantive Issues: Whether an employer-employee relationship existed between St. Martin Funeral Home and Bienvenido Aricayos, entitling him to remedies for alleged illegal dismissal.

Procedural: The Supreme Court ruled that all references to "appeals" from NLRC decisions in amended Section 9 of B.P. Blg. 129 mean petitions for certiorari under Rule 65, which must be initially filed with the Court of Appeals to observe the hierarchy of courts, as direct resort to the Supreme Court undermines efficiency and burdens its docket; the petition was remanded to the Court of Appeals for disposition, interpreting R.A. No. 7902's legislative intent to relieve the Supreme Court's workload by allowing the Court of Appeals to review factual issues. - Substantive: The Supreme Court declined to resolve the existence of an employer-employee relationship or the merits of the illegal dismissal claim, remanding the case to the Court of Appeals for appropriate action without prejudice, as the procedural issue took precedence.

• Doctrine on Hierarchy of Courts — This principle requires litigants to seek relief from lower courts first before escalating to higher courts unless exceptional circumstances exist, to promote orderly administration of justice and efficient case resolution; in this case, it was applied to mandate initial filing of certiorari petitions against NLRC decisions with the Court of Appeals, preventing direct access to the Supreme Court and aligning with the legislative goal of reducing its workload.
• Judicial Review of Administrative Agencies — Courts have inherent power to review acts of quasi-judicial agencies like the NLRC for jurisdictional errors or grave abuse of discretion, even absent statutory appeal provisions, to ensure due process and check administrative overreach; here, it was invoked to clarify that such review proceeds via certiorari under Rule 65, not ordinary appeal, and must follow the hierarchy of courts post-R.A. No. 7902.
• Grave Abuse of Discretion — This occurs when an administrative body exercises its discretion in an arbitrary, capricious, or despotic manner amounting to lack or excess of jurisdiction; the Court examined the NLRC's actions under this standard but deferred merits resolution, using it to justify remand for proper forum.

• "The increasing number of labor disputes that find their way to this Court and the legislative changes introduced over the years into the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act of 1980) now stridently call for and warrant a reassessment of that procedural aspect."
• "Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should henceforth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired."
• "This practice must be stopped, not only because of the imposition upon the precious time of this Court but also because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case which often has to be remanded or referred to the lower court as the proper forum under the rules of procedure."

• San Miguel Corporation vs. Secretary of Labor — Cited as precedent establishing the Supreme Court's jurisdiction to review NLRC decisions via certiorari despite no statutory appeal, emphasizing judicial scrutiny for jurisdictional errors and protection of substantial rights.
• Santiago vs. Vasquez — Referenced to reiterate the policy against direct resort to the Supreme Court, bypassing lower courts, to avoid delays and respect the hierarchy of courts, applied here to justify remanding the petition.
• Pure Foods Corporation vs. NLRC — Cited illustratively as an example of the established mode of review via certiorari under Rule 65 for NLRC decisions, supporting the Court's clarification on procedural requirements.
• Mantrade vs. Bacungan — Referenced to affirm that the Supreme Court may take cognizance of certiorari petitions even after the NLRC decision's finality period lapses, if filed within Rule 65's 60-day period, on jurisdictional grounds.

• Article 223, Labor Code (P.D. No. 442, as amended) — Provides that NLRC decisions are final and executory after 10 days from receipt, with no appellate review to the Secretary of Labor post-P.D. No. 1391; relevant as it underscores the absence of ordinary appeals, necessitating certiorari for judicial review.
• Section 9, B.P. Blg. 129 (as amended by R.A. No. 7902) — Grants the Court of Appeals exclusive appellate jurisdiction over quasi-judicial agencies including NLRC, except those within the Supreme Court's jurisdiction per the Labor Code; interpreted here to mean initial certiorari petitions to the Court of Appeals.
• Section 17, Judiciary Act of 1948 — Referenced in the exceptive clause of Section 9, B.P. Blg. 129, to delineate cases appealable directly to the Supreme Court; used to clarify exclusions from Court of Appeals' jurisdiction but not extending to NLRC appeals.
• Rule 65, Rules of Court — Governs the special civil action of certiorari for reviewing jurisdictional errors or grave abuse; central to the ruling as the proper mode for NLRC review, with a 60-day filing period.