St. Martin Funeral Home vs. NLRC

Petitions for judicial review of NLRC decisions must be filed initially with the CA as special civil actions for certiorari under Rule 65, not directly with the SC, to comply with the doctrine on hierarchy of courts.

The case arose from a dispute over the existence of an employer-employee relationship between St. Martin Funeral Home and its alleged operations manager. However, the SC treated the case as an opportunity to reassess the procedural mechanism for reviewing NLRC decisions, given the increasing volume of labor cases flooding the SC and the ambiguity introduced by RA 7902 regarding the proper appellate route.

• Filed with the NLRC Regional Arbitration Branch No. III, San Fernando, Pampanga (complaint for illegal dismissal by private respondent)
• Decision of the Labor Arbiter (October 25, 1996): Ruled no employer-employee relationship existed; dismissed the complaint for lack of jurisdiction
• Appealed to the NLRC: Private respondent appealed the Labor Arbiter's decision
• Decision of the NLRC (June 13, 1997): Reversed the Labor Arbiter, set aside the decision, and remanded the case to the Labor Arbiter for further proceedings
• Motion for Reconsideration (August 18, 1997): Filed by petitioner; denied by the NLRC for lack of merit
• Elevated to the SC: Petitioner filed a petition for certiorari directly with the SC under Rule 65

• Private respondent Bienvenido Aricayos allegedly worked as Operations Manager of St. Martin Funeral Home from February 6, 1995 to January 22, 1996
• No written contract of employment existed; private respondent's name was not included in the semi-monthly payroll
• Petitioner claimed private respondent was merely the uncle of owner Amelita Malabed who voluntarily helped oversee the business as gratitude for prior financial assistance
• Private respondent was allegedly dismissed for misappropriating P38,000.00 intended for VAT payment to the BIR
• In January 1996, after the death of Amelita's mother, Amelita took over management, discovered tax arrears, and excluded private respondent and his wife from management
• Private respondent filed a complaint for illegal dismissal with the NLRC

• The NLRC committed grave abuse of discretion in reversing the Labor Arbiter's decision
• No employer-employee relationship existed between the parties; private respondent was merely a volunteer/relative assisting in the business
• The NLRC erred in remanding the case when the Labor Arbiter correctly determined lack of jurisdiction due to the absence of an employer-employee relationship

• The Labor Arbiter erred in not giving credence to the evidence submitted by private respondent
• The Labor Arbiter erred in holding that he worked as a "volunteer" rather than as an employee for approximately one year
• The Labor Arbiter erred in ruling that no employer-employee relationship existed

• Procedural Issues:
  • Whether the SC should entertain the petition for certiorari filed directly with it, or whether it should be filed initially with the CA under the doctrine on hierarchy of courts
  • Whether the references to "appeals" from the NLRC in RA 7902 (amending BP 129) should be interpreted as referring to petitions for certiorari under Rule 65
• Substantive Issues:
  • N/A

• Procedural:
  • The SC interpreted the amendments introduced by RA 7902 to Section 9 of BP 129 and found that while the law used the term "appeals," legislative intent and practical considerations require that this be understood as referring to petitions for certiorari under Rule 65
  • The SC declared that all references in the amended Section 9 of BP 129 to supposed appeals from the NLRC to the SC are interpreted to mean and refer to petitions for certiorari under Rule 65
  • Consequently, all such petitions should henceforth be initially filed in the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum
  • The petition was remanded to the CA for appropriate action and disposition
• Substantive:
  • N/A

• Hierarchy of Courts — The SC will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate lower courts or where exceptional and compelling circumstances justify availment of a remedy within its primary jurisdiction. Litigants must follow the hierarchical order of courts.
• Judicial Review of NLRC Decisions via Certiorari — Since the elimination of appeals from the NLRC to the Secretary of Labor, and with no statutory provision for appellate review, the proper vehicle for judicial review is the special civil action of certiorari under Rule 65, limited to jurisdictional issues and grave abuse of discretion amounting to lack of jurisdiction.
• Interpretation of Statutes to Avoid Absurdity — The SC interpreted the term "appeals" in RA 7902 as actually referring to "certiorari" to avoid the absurd and impracticable situation where the CA would have no jurisdiction over NLRC decisions but the SC would supposedly hear "appeals" from them, despite the SC not being a trier of facts.
• SC as Not a Trier of Facts — The SC is not equipped to try cases and conduct hearings to resolve factual issues, unlike the CA which has the power to grant and conduct new trials or further proceedings.

• "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."
• "We, therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify availment of a remedy within and calling for the exercise of our primary jurisdiction."
• "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, or as better equipped to resolve the issues since this Court is not a trier of facts."

• Santiago vs. Vasquez — Cited for the doctrine on hierarchy of courts and the prohibition against direct resort to the SC when relief is available in lower courts.
• San Miguel Corporation vs. Secretary of Labor — Cited as early precedent establishing the SC's power to scrutinize acts of administrative agencies on questions of law and jurisdiction despite no statutory right of review.
• Zapata vs. NLRC — Cited for the rule that a motion for reconsideration is a precondition for filing certiorari.
• Mantrade vs. Bacungan — Cited for the rule that the SC may take cognizance of petitions for certiorari within the 60-day period under Rule 65 even if the 10-day period for finality of NLRC decisions has lapsed.

• Batas Pambansa Blg. 129, Section 9 (as amended by RA 7902) — The SC analyzed the amendments deleting the exclusion of Labor Code cases from CA jurisdiction and the transposition of the Labor Code reference to the exception clause. It interpreted the term "appeals" in this provision as actually referring to certiorari under Rule 65.
• Presidential Decree No. 442 (Labor Code), Article 223 — Cited to show that NLRC decisions are final and executory after 10 days from receipt, with no provision for appeal, only the remedy of certiorari.
• Rules of Court, Rule 65 — Established as the proper vehicle for judicial review of NLRC decisions, with a 60-day reglementary period.