BURGUNDY ASSETS DEVELOPMENT CORPORATION, ROGELIO SERAFICA, AND GREGG GREGONIA, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION (FOURTH DIVISION) AND BURGUNDY ASSETS DEV’T C…

Burgundy Assets Development versus National Labor Relations Commission

The Case

This is a petition for certiorari under Rule 65 brought by Burgundy Assets Development Corporation and its officers Rogelio Serafica and Gregg Gregonia against the National Labor Relations Commission, Fourth Division, and the members of the Burgundy employees union whom they had dismissed. The petitioners ask the Supreme Court to nullify the Commission's decision and resolution which found them guilty of unfair labor practice, declared seven union officers illegally and constructively dismissed, and ordered reinstatement with backwages and damages. The case matters because it gathers in one decision the working rules on forum shopping, on the conclusive effect of final judgments in earlier labor cases, on the effect of an employer's failure to file a position paper, and on constructive dismissal through unjustified transfer and isolation of union leaders.

Procedural History

The union, through its vice president Manolo Cabahug and six other officers, filed a complaint before the labor arbiter for unfair labor practice, illegal and constructive dismissal, damages, and attorney's fees. The employer never filed a position paper despite being given a last chance to do so. Labor Arbiter Vivian Magsino-Gonzalez dismissed the complaint. The complainants appealed to the National Labor Relations Commission, Fourth Division, which reversed the labor arbiter, vacated her decision, and entered a new one finding the employer guilty of unfair labor practice, declaring the seven officers illegally and constructively dismissed, and ordering reinstatement without loss of seniority rights, full backwages from the dismissal on 23 February 2013 until actual reinstatement, moral damages of 15,000 pesos to each complainant, exemplary damages, and attorney's fees equivalent to ten percent of the total judgment award. The employer's motion for reconsideration was denied. The employer then came to the Supreme Court by petition for certiorari, and the petition was submitted for decision.

Facts

The complainants had worked for Burgundy since 1997 as masons, carpenters, electricians, painters, and building maintenance personnel, assigned to the Burgundy Corporate Tower in Makati City, Burgundy McKinley Place in Parañaque City, and Burgundy Transpacific Place along Taft Avenue in Manila. In October 2012 the employees organized the Burgundy Asset Development Corporation Employees Labor Union, affiliated with the National Union of Building and Construction Workers, and filed a petition for certification election.

In early January 2013, after the employer noticed that the complainants were the leaders of the new union, they were transferred to the Burgundy Forbes Tower in Manila, an abandoned building where only security guards lived. The transfer memorandum and the transfer forms stated no reason for the transfer. About two weeks later they were placed on suspension for thirty days, from 24 January to 23 February 2013, allegedly because work was suspended, and then they were summarily dismissed on 23 February 2013.

In two earlier cases, one for regularization and money claims and another for service incentive leave and thirteenth month pay, the labor arbiters had already ruled that the complainants were regular employees of Burgundy, and those decisions had become final because the employer did not appeal them. In the present case, however, the employer filed no position paper at all, and raised its defenses for the first time in its motion for reconsideration before the Commission.

Issues

• Whether or not the private respondents committed forum shopping in filing the present complaint alongside the two earlier labor cases.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion in reversing the labor arbiter and finding the private respondents to be regular employees who were illegally and constructively dismissed.
• Whether or not the petition for certiorari was the proper and adequate remedy.

Applicable Provisions

Section 1 of Rule 9 of the Rules of Court, made applicable to labor proceedings through Section 3 of Rule 1 of the Rules of the National Labor Relations Commission, provides:

Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by the statute of limitations, the court shall dismiss the claim.

This is the rule the Court invokes in holding that the employer's failure to file a position paper amounted to an admission of the material averments of the complaint.

Ruling

On the first issue, the Court held that there was no forum shopping. Forum shopping is the institution of two or more actions involving the same parties for the same cause of action, simultaneously or successively, on the supposition that one or the other court would come out with a favorable disposition. The test is whether the elements of litis pendentia are present, or whether a final judgment in one case will amount to res judicata in the other. Here the causes of action were not identical: the present case concerned illegal dismissal of union officers amounting to unfair labor practice, while the earlier cases concerned regularization, unpaid wages, and money claims. The Court stressed, however, that the earlier decisions had already ruled the complainants to be regular employees, and those decisions had become final because the employer did not appeal them. A final judgment on the merits by a competent court is conclusive on the rights of the parties in all later suits.

On the second issue, the Court held that the Commission did not commit grave abuse of discretion. Grave abuse of discretion means judgment exercised in a capricious and whimsical manner tantamount to lack of jurisdiction, and in labor disputes it may be ascribed to the Commission when its findings are not supported by substantial evidence. Here the findings were supported. The employer, despite being given a last chance, filed no position paper, and under the rule quoted above its failure to specifically deny the material allegations of the complaint amounted to an admission of those allegations. Its explanation that a shooting incident at its former office made it lose track of its cases was insufficient.

On the merits of the dismissal, the Court found the hallmarks of constructive dismissal present. The transfer memorandum and the transfer forms stated no reason for the transfer, and no document explained the necessity of moving the complainants from workplaces busy with construction activity to an abandoned project. The unjustified transfer stripped the complainants of their functions, reducing them to doing nothing, and the suspension and dismissal followed. The Court also noted that the certification election had already been decided in the complainants' favor.

On the third issue, the Court held that certiorari was the proper remedy, but that the petition was bereft of merit, since the employer failed to show grave abuse of discretion.

Doctrine

First, forum shopping requires identity of parties, identity of rights asserted and reliefs prayed for founded on the same facts, and such identity that a judgment in one case would amount to res judicata in the other. Different causes of action, even between the same parties, do not constitute forum shopping.

Second, a final judgment on the merits is conclusive on the parties in all later suits as to every point determined in the former suit. An employer who fails to appeal an earlier ruling that its workers are regular employees cannot relitigate their status in a later case.

Third, material averments in a complaint are deemed admitted when not specifically denied, and an employer who fails to file a position paper is deemed to have admitted the allegations against it.

Fourth, constructive dismissal exists where an unjustified transfer strips an employee of his functions and isolates him, reducing him to doing nothing, especially where the transfer follows the organization of a union and targets its leaders.

Disposition

The petition was denied and the decision and resolution of the National Labor Relations Commission were affirmed, so the union and its seven officers won reinstatement, backwages, and damages.

Remember This

Memorize this line: an employer who sleeps on its case admits the complaint, and a final judgment on the workers' regular status binds it forever. Examiners use this case for forum shopping distinguished from litis pendentia, for the conclusive effect of final labor judgments, and for constructive dismissal through unjustified transfer of union leaders.