United CMC Textile Workers Union vs. Clave

A voluntary arbitrator's award or decision is final, unappealable, and executory pursuant to Article 263 of the New Labor Code, and once the reglementary period for appeal has lapsed without an appeal being perfected, the award becomes final and executory and may no longer be reversed or set aside by any appellate authority.

The petitioners are a labor union and thirty-five individual employees of Central Textile Mills, Inc., a private corporation. The employees were covered by a collective bargaining agreement that provided for a grievance procedure and voluntary arbitration as the mechanism for resolving disputes arising from the agreement. The dismissals occurred in 1974, and the applicable statutory framework was governed by the transition from Presidential Decree No. 21, which allowed appeals from voluntary arbitration awards, to the New Labor Code (P.D. 442), which took effect on November 1, 1974, and declared such awards final and unappealable.

Petitioner United CMC Textile Workers Union and thirty-five individual employees of Central Textile Mills, Inc. were covered by a collective bargaining agreement that provided for a grievance procedure and voluntary arbitration. On different dates in 1974, the private respondent placed thirty-five of its employees under preventive suspension for alleged violation of company rules and regulations. Eventually, these employees were dismissed by the private respondent, which invoked the Termination Pay Law and the collective bargaining contract, but without obtaining the necessary clearance for dismissal required by Section 11 of P.D. 21.

On August 28, 1975, after discussing the dismissal through the grievance procedure provided by the collective bargaining agreement and failing to arrive at a mutually acceptable solution, the petitioner union, in behalf of the affected employees, filed a complaint for unfair labor practice with the Department of Labor. On September 10, 1975, pursuant to Article VI, Section 5 of the collective bargaining agreement, the parties met in conference before Atty. Sagun of Regional Office No. IV, Department of Labor, where they agreed to choose Atty. George A. Eduvala as their voluntary arbitrator.

On March 18, 1976, voluntary arbitrator Eduvala rendered a decision ordering that the thirty-five employees be immediately reinstated and paid their back wages equivalent to one year of service, without deductions. The private respondent received its copy of the decision on March 27, 1976. On April 26, 1976, instead of filing an appeal, the private respondent filed a motion for reconsideration, which the voluntary arbitrator denied on July 7, 1976, affirming the previous decision except with respect to thirteen employees who voluntarily resigned.

The private respondent then appealed to the National Labor Relations Commission, which dismissed the appeal on November 2, 1976, holding that the case was submitted for voluntary arbitration under the collective bargaining contract whose decision is final, unappealable, and executory, and that the Commission had no jurisdiction over the subject matter. The private respondent received the NLRC resolution on December 29, 1976, and on January 14, 1977, appealed to the Secretary of Labor, who dismissed the appeal for lack of merit on November 23, 1977. From this order, the private respondent appealed to the Office of the President, where public respondent Jacobo C. Clave rendered a decision on March 28, 1980, setting aside the Secretary of Labor's decision and dismissing the petitioners' complaint. The petitioners' motion for reconsideration was denied on March 3, 1981, prompting the instant petition.

• Applicable Law — New Labor Code: Petitioners maintained that since the voluntary arbitrator's decision was rendered on March 18, 1976, when the New Labor Code was already in force, the law applicable is the New Labor Code, which provides that decisions on awards of voluntary arbitrators are final, unappealable, and executory under Article 263.

• Finality of the Arbitral Award: Petitioners argued that the decision of voluntary arbitrator Eduvala dated March 18, 1976, had attained finality, and public respondent Clave had no authority to reverse it.

• Applicable Law — Presidential Decree No. 21: Respondents contended that since the cause of action accrued in 1974, at the latest on October 29, 1974, before the New Labor Code took effect on November 1, 1974, the law applicable is P.D. 21, dated October 14, 1972, which allows an appeal from the decision of a voluntary arbitrator.

• Finality of the Voluntary Arbitrator's Decision: Whether the decision of voluntary arbitrator George A. Eduvala dated March 18, 1976, attained finality such that public respondent Jacobo C. Clave had no authority to reverse it.

• Applicable Law on Appeal: Whether the New Labor Code or Presidential Decree No. 21 governs the private respondent's appeal from the voluntary arbitrator's decision.

• Grave Abuse of Discretion: Whether public respondent Clave committed grave abuse of discretion in setting aside the order of the Secretary of Labor and dismissing the petitioners' complaint.

• Finality of the Voluntary Arbitrator's Decision: Yes. The decision of voluntary arbitrator Eduvala dated March 18, 1976, is final and executory under both the New Labor Code and Presidential Decree No. 21, and public respondent Clave had no authority to reverse it.

• Applicable Law on Appeal: The New Labor Code governs the appeal. Since the decision of the voluntary arbitrator was rendered on March 18, 1976, long after the New Labor Code took effect on November 1, 1974, the decision is final and unappealable pursuant to Article 263 of the same Code, which provides that voluntary arbitration awards or decisions shall be final, unappealable, and executory.

• Grave Abuse of Discretion: Yes. Public respondent Clave committed grave abuse of discretion in setting aside the order of the Secretary of Labor and dismissing the petitioners' complaint, as the voluntary arbitrator's decision was supported by the evidence and the law.

• Finality of the Voluntary Arbitrator's Decision: The Court found that the decision of voluntary arbitrator Eduvala dated March 18, 1976, is final and executory under both the New Labor Code and Presidential Decree No. 21. Under the New Labor Code, Article 263 provides that voluntary arbitration awards or decisions shall be final, unappealable, and executory. Under Presidential Decree No. 21, Section 2 of Supplementary Rules and Regulations No. 1, dated January 26, 1973, provides that an appeal to the Commission must be filed within ten (10) days from receipt of the award of the aggrieved party. The records show that on March 27, 1976, private respondent received its copy of the decision, but instead of resorting to an appeal, it filed a motion for reconsideration on April 26, 1976, almost a month after receipt and long after the ten-day period for filing an appeal had lapsed. Furthermore, the private respondent's appeal from the NLRC to the Secretary of Labor was perfected out of time, as Section 6 of the rules implementing P.D. 21 provides that the appeal to the Secretary of Labor should be made within five (5) days upon receipt of the award or decision of the Commission. The NLRC resolution was received on December 29, 1976, and the appeal was filed on January 14, 1977, beyond the reglementary period.

• Applicable Law on Appeal: The Court held that the law that must govern the private respondent's appeal is the New Labor Code. Citing Bello vs. Fernando, 4 SCRA 138 (January 30, 1962), the Court declared that the right to appeal is not a natural right nor a part of due process; it is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of the law. The Court further cited Central Textile Mills Employees Welfare Union-PFL vs. Zamora, 19 SCRA 150 (September 28, 1977), which held that procedural laws, unlike substantive laws, may be applied retroactively as there can be no vested right in a rule of procedure. Since the decision of voluntary arbitrator Eduvala was rendered on March 18, 1976, long after the New Labor Code took effect on November 1, 1974, the decision is final and unappealable pursuant to Article 263 of the same Code.

• Grave Abuse of Discretion: The Court found that public respondent Clave's decision ignored the evidence adduced by the petitioners. The Court found no error in the decision of voluntary arbitrator Eduvala to call for its reversal and the dismissal of the petitioners' complaint. The voluntary arbitrator had ruled that a dismissed employee may question his dismissal on the ground that it is not legally justified, even if a clearance for his dismissal is issued, and more so if no clearance is issued at all. When the employee raises an issue on his dismissal, it becomes incumbent at once for the employer to prove that just causes exist to legalize the dismissal or, in cases of dismissal before P.D. 442, that separation pay has been given to the employee. In the case at bar, the employer had not satisfied this burden. The arbitrator also accepted the union's contention that as the recognized collective bargaining agent of the employees, it is entitled to notice and hearing on any case involving the employees, and that when a disciplinary action on employees is done behind it, unfair labor practice is committed. The Court found this logical analysis supported by the evidence and the law, and held that public respondent Clave committed grave abuse of discretion in setting aside the order of the Secretary of Labor and dismissing the petitioners' complaint.

• Finality of Voluntary Arbitration Awards — Under Article 263 of the New Labor Code, voluntary arbitration awards or decisions shall be final, unappealable, and executory. The Court applied this doctrine to hold that the voluntary arbitrator's decision rendered on March 18, 1976, after the New Labor Code took effect on November 1, 1974, was final and unappealable, and could not be reversed by the Presidential Executive Assistant.

• Right to Appeal as a Statutory Privilege — The right to appeal is not a natural right nor a part of due process; it is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of the law. The Court applied this doctrine to hold that the private respondent's failure to perfect its appeal within the reglementary periods under both the New Labor Code and Presidential Decree No. 21 rendered the voluntary arbitrator's decision final and executory.

• Retroactive Application of Procedural Laws — Procedural laws, unlike substantive laws, may be applied retroactively as there can be no vested right in a rule of procedure. The Court applied this doctrine to hold that the New Labor Code, which was already in force when the voluntary arbitrator rendered his decision, governed the appeal, notwithstanding that the cause of action accrued before the Code took effect.

• Employer's Burden of Proof in Illegal Dismissal Cases — When an employee raises an issue on his dismissal, it becomes incumbent at once for the employer to prove that just causes exist to legalize the dismissal or, in cases of dismissal before P.D. 442, that separation pay has been given to the employee. The Court applied this doctrine in affirming the voluntary arbitrator's finding that the employer had not satisfied this burden.

• "The right to appeal is not a natural right nor a par of due process: it is merely a statutory privilege, and may be exercised only in the manner and in accordance with the of the law (Aguila v. Navarro, 55 Phil. 898, Santiago vs. Valenzuela, 78 Phil. 397)." — This passage, quoted from Bello vs. Fernando, establishes the principle that the right to appeal is a mere statutory privilege, which the Court applied to hold that the private respondent's failure to perfect its appeal within the reglementary period rendered the voluntary arbitrator's decision final and executory.

• "Procedural laws, unlike substantive laws, may be applied retroactively as there can be no vested right n a rule of procedure." — This passage, quoted from Central Textile Mills Employees Welfare Union-PFL vs. Zamora, establishes the doctrine of retroactive application of procedural laws, which the Court applied to hold that the New Labor Code governed the appeal since the voluntary arbitrator's decision was rendered after the Code took effect.

• "There can be no doubting that a dismissed employee may question his dismissal on the ground that it is not legally justified. This the employee can do even if a clearance for his dismissal is issued. More so if, as in the case at bar, no clearance is issued at all." — This passage from the voluntary arbitrator's decision articulates the principle that a dismissed employee may question the legality of his dismissal, and that the employer bears the burden of proving just causes for the dismissal, which the Court found supported by the evidence and the law.

• Bello vs. Fernando, 4 SCRA 138 (January 30, 1962) — Cited as controlling authority for the principle that the right to appeal is merely a statutory privilege, not a natural right or part of due process, and may be exercised only in the manner and in accordance with the provisions of the law.

• Central Textile Mills Employees Welfare Union-PFL vs. Zamora, 19 SCRA 150 (September 28, 1977) — Cited as controlling authority for the doctrine that procedural laws, unlike substantive laws, may be applied retroactively as there can be no vested right in a rule of procedure.

• Mercury Drug Co., Inc. vs. Court of Industrial Relations, 56 SCRA 694 — Cited as the policy basis for awarding a maximum of three (3) years back wages without qualification and deduction, to do away with the attendant delay in awarding back wages because of the extended hearing to prove the earnings elsewhere of each and every employee.

• Article 263, New Labor Code (P.D. 442) — Provides that voluntary arbitration awards or decisions shall be final, unappealable, and executory. The Court applied this provision to hold that the voluntary arbitrator's decision rendered on March 18, 1976, after the New Labor Code took effect on November 1, 1974, was final and unappealable.

• Section 11, Presidential Decree No. 21 — Requires clearance for dismissal of employees. The Court noted that the private respondent dismissed the thirty-five employees without obtaining the necessary clearance as required by this provision.

• Section 2, Supplementary Rules and Regulations No. 1, Presidential Decree No. 21 (January 26, 1973) — Provides that an appeal to the National Labor Relations Commission must be filed within ten (10) days from receipt of the award of the aggrieved party. The Court applied this provision to hold that the private respondent's motion for reconsideration, filed almost a month after receipt of the voluntary arbitrator's decision, was filed long after the ten-day period for filing an appeal had lapsed.

• Section 6, Rules Implementing Presidential Decree No. 21 — Provides that the appeal to the Secretary of Labor should be made within a period of five (5) days upon receipt of the award or decision of the Commission. The Court applied this provision to hold that the private respondent's appeal to the Secretary of Labor, filed on January 14, 1977, was beyond the reglementary period of five days from receipt of the NLRC resolution on December 29, 1976.

Concepcion, Jr., Escolin, De la Fuente, Cuevas, and Alampay, JJ., concurred. Aquino and Abad Santos, JJ., took no part.