Var-Orient Shipping Co., Inc. vs. Achacoso

Due process in administrative proceedings is satisfied when parties are given a fair and reasonable opportunity to explain their side or seek reconsideration, and a decision rendered on the basis of position papers — in lieu of a formal hearing — does not violate due process where the parties themselves agreed to such procedure. Valid service of an administrative decision upon counsel is effected when the decision is delivered to counsel's receptionist at counsel's office address, and failure to produce contrary evidence renders the decision final and executory.

Petitioners Var-Orient Shipping Co., Inc. and Comninos Bros. are the employers of a crew of Filipino seafarers manning the MPV "Silver Reefer." The private respondents are crew members of that vessel. The dispute arose from the interdiction of the vessel by the International Transport Workers' Federation (ITF) at Kiel Canal, Germany, in March 1986, which petitioners attributed to the crew's alleged violation of their employment contracts. The Philippine Overseas Employment Administration (POEA), through its Workers' Assistance and Adjudication Office, exercises jurisdiction over disputes arising from overseas employment contracts, and its Administrator renders decisions in such cases subject to the POEA's rules on service, finality, and execution.

Petitioners Var-Orient Shipping Co., Inc. and Comninos Bros. are the employers of a crew of Filipino seafarers manning the MPV "Silver Reefer." The private respondents — Edgar T. Bunyog, Vedasto Navarro, Eugenio Capalad, Raul Tumasis, Antonio Tanioan, Celestino Cason, Danilo Manela, and Roberto Genesis — were crew members of that vessel. In March 1986, the vessel was interdicted by the International Transport Workers' Federation (ITF) at Kiel Canal, Germany. Petitioners attributed this interdiction to the crew's alleged violation of their employment contracts and consequently filed a complaint with the POEA Workers' Assistance and Adjudication Office seeking damages.

After joinder of issues, the case was heard on March 4, 1987, where the parties agreed to submit their respective position papers and thereafter consider the case submitted for decision. Only the private respondents submitted a position paper. On June 10, 1987, the respondents filed a motion to resolve the case. Petitioners' counsel did not oppose this motion. On the basis of the pleadings and memoranda on record, the POEA Administrator rendered a decision on September 9, 1987, dismissing the complaint against the crew members with a reprimand and warning, reprimanding petitioners for failure to comply with POEA rules, and ordering petitioners to pay the respondents various amounts representing deductions from allotments and unpaid salaries, plus attorney's fees.

A copy of the decision was sent by registered mail and delivered by the postman to petitioners' then counsel, Attorney Francisco B. Figura, at his office on the 4th Floor, TRC Building, Sen. Gil Puyat Avenue, Makati, Metro Manila. The delivery was made through the receptionist, Marlyn Aquino, on the ground floor of the building on September 21, 1987. Attorney Figura claimed he never received the envelope containing the decision. On October 19, 1987, the respondents filed a motion for execution of the decision, which was likewise not opposed by petitioners' counsel.

Petitioners allegedly learned of the decision only when the writ of execution was served on November 20, 1987, by NLRC Deputy Sheriff Rene Masilungan and Attorney Wilfredo Ong. On November 23, 1987, petitioners, through new counsel, filed an urgent motion to recall the writ of execution, arguing that the decision had not been received and was therefore not yet final and executory. The POEA Administrator denied the motion on January 19, 1988, sustaining the position that the decision had been properly served on petitioners' counsel through his receptionist. Petitioners then elevated the matter to the Supreme Court via certiorari, imputing grave abuse of discretion to the POEA Administrator.

• Denial of Due Process: Petitioners alleged that they were denied due process of law because the respondent Administrator resolved the case without any formal hearing.
• Grave Abuse of Discretion — Denial of Right to Appeal: Petitioners argued that the respondent Administrator gravely abused his discretion in denying their right to appeal, contending that the decision was not yet final and executory because no copy had been received by their counsel.
• Excessive and Unfounded Damages: Petitioners maintained that the damages awarded to the private respondents were excessive and unfounded.
• Premature Execution: Petitioners asserted that the writ of execution was premature because the decision had not been received by their counsel, rendering it not yet final and executory.

• Due Process in Administrative Proceedings: Whether the POEA Administrator's rendition of a decision without a formal hearing, based solely on position papers, constituted a denial of due process.
• Validity of Service and Finality of Decision: Whether the decision of the POEA Administrator was properly served on petitioners' counsel through delivery to the receptionist, such that it became final and executory and the writ of execution was not premature.
• Propriety of Damages Award: Whether the POEA Administrator gravely abused his discretion in awarding damages to the private respondents, particularly the payment of salaries for the unserved portion of the employment contract to respondent Bunyog.

• Due Process in Administrative Proceedings: No. The decision rendered on the basis of position papers, without a formal hearing, did not violate due process, the parties having agreed to submit the case for decision on the basis of their respective memoranda.
• Validity of Service and Finality of Decision: No. The decision was properly served on petitioners' counsel through delivery to the receptionist at counsel's office, and petitioners failed to rebut this with contrary evidence; the decision was thus final and executory and the writ of execution was not premature.
• Propriety of Damages Award: No. The Administrator did not abuse his discretion in ordering payment of Bunyog's salaries for the unserved portion of his contract, the Administrator having found that Bunyog did not sign the letter to the ITF and was therefore deemed not to have committed any offense warranting dismissal.

• Due Process in Administrative Proceedings: The essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain one's side or to seek reconsideration of the action or ruling complained of. At the hearing on March 4, 1987, the parties agreed to file their respective memoranda and thereafter submit the case for decision. This procedure is authorized by law to expedite the settlement of labor disputes. Only the private respondents submitted memoranda; the petitioners did not. Moreover, petitioners' counsel failed to oppose either the respondents' motion to resolve or the motion for execution of decision, both of which were furnished to them through counsel. Had petitioners genuinely believed they were denied due process, they should have opposed those motions. The petition for certiorari also did not allege that petitioners possessed any additional evidence that, if produced, would have altered the outcome. The absence of a formal hearing therefore did not constitute a due process violation.

• Validity of Service and Finality of Decision: The decision was sent by registered mail and delivered by the postman to petitioners' counsel through the receptionist, Marlyn Aquino, at the ground floor of the building where counsel's office was located, on September 21, 1987. Attorney Figura's affidavit claiming non-receipt was deemed self-serving. Petitioners failed to submit an affidavit from the receptionist explaining what she did with the decision she received on counsel's behalf. Under these circumstances, the Administrator's ruling that the decision had been properly served and was final and unappealable was sustained. The writ of execution was therefore not premature.

• Propriety of Damages Award: The Administrator did not abuse his discretion in ordering petitioners to pay respondent Edgar Bunyog's salaries for the unserved portion of his contract plus attorney's fees. The Administrator found that Bunyog did not sign the letter of the other defendants to the ITF, and was therefore deemed not to have committed any offense or act warranting his dismissal. This factual finding supported the award of unpaid salaries for the unexpired portion of the contract.

• Due Process in Administrative Proceedings — The essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek reconsideration of the action or ruling complained of. A formal hearing is not indispensable; the submission of position papers or memoranda in lieu of a trial-type hearing satisfies due process where the parties agreed to such procedure. The Court applied this doctrine by holding that the parties' agreement on March 4, 1987 to submit position papers and consider the case submitted for decision, coupled with petitioners' failure to oppose subsequent motions, negated any due process violation.

• Validity of Service Through Counsel's Representative — Service of an administrative decision upon counsel is validly effected when the decision is delivered to a person at counsel's office, such as a receptionist, in the absence of contrary evidence showing non-receipt. The Court applied this principle by sustaining the POEA Administrator's finding that delivery to the receptionist Marlyn Aquino constituted valid service, petitioners having failed to produce the receptionist's affidavit or any other evidence rebutting the presumption of proper service.

• "The essence of due process is simply an opportunity to be heard (Bermejo vs. Banjos, 31 SCRA 764), or, as applied to administrative proceedings, an opportunity to explain one's side (Tajonera vs. Lamaroza, 110 SCRA 438; Gas Corporation of the Phil. vs. Hon. Inciong, 93 SCRA 653; Cebu Institute of Technology vs. Minister of Labor, 113 SCRA 257), or an opportunity to seek a reconsideration of the action or ruling complained of (Dormitorio vs. Fernandez, 72 SCRA 388)." — This passage articulates the controlling formulation of due process in administrative proceedings, distinguishing it from the more stringent requirements of judicial due process and establishing that an opportunity to be heard, not a formal hearing, is the essential element.

• "Petitioners failed to submit an affidavit of the receptionist Marlyn Aquino explaining what she did with the decision which she received for Atty. Figura. Under the circumstances, the respondent Administrator's ruling that the decision had been properly served on petitioners' counsel and that it is now final and unappealable, should be sustained." — This passage establishes the evidentiary burden on a party claiming non-receipt of a decision validly delivered to counsel's office through a representative, and the consequence of failing to discharge that burden.

• Bermejo vs. Banjos, 31 SCRA 764 — Cited for the proposition that the essence of due process is an opportunity to be heard. Followed.
• Tajonera vs. Lamaroza, 110 SCRA 438 — Cited for the proposition that due process in administrative proceedings requires an opportunity to explain one's side. Followed.
• Gas Corporation of the Phil. vs. Hon. Inciong, 93 SCRA 653 — Cited in support of the administrative due process standard. Followed.
• Cebu Institute of Technology vs. Minister of Labor, 113 SCRA 257 — Cited in support of the administrative due process standard. Followed.
• Dormitorio vs. Fernandez, 72 SCRA 388 — Cited for the proposition that due process includes an opportunity to seek reconsideration of the action or ruling complained of. Followed.

Narvasa, Cruz, Gancayco, and Medialdea, JJ., concurred.