GREGORIO GELITO, ALEX[] REYES, NARCISO TAN AND ERNAN MALALUAN, PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION, HON. ELIAS H. SALINAS, IN HIS CAPACITY AS LABOR ARBITER, AND…

Gelito versus National Labor Relations Commission

The Case

This is a petition for certiorari under Rule 65 brought by four dismissed employees, Gregorio Gelito, Alex Reyes, Narciso Tan and Ernan Malaluan, against the National Labor Relations Commission, the Labor Arbiter and their former employer, Monde M.Y. San Corporation. The petitioners had already won a final judgment declaring them illegally dismissed and awarding them full backwages, and they had already collected the money under a writ of execution. The employer then asked the Commission to correct the computation, and the Commission set the computation aside. The petitioners now ask the Supreme Court to strike down the Commission's rulings. The case matters because it teaches three enduring lessons: who may sign a verification for a corporation, how strictly verification rules apply in labor cases, and why full payment of a wrong computation does not make the correction of that computation moot.

Procedural History

The petitioners filed a complaint for illegal dismissal against Monde M.Y. San Corporation. The Labor Arbiter dismissed the complaint, and the National Labor Relations Commission affirmed the dismissal. The petitioners then went up to the Supreme Court, and the Supreme Court's Special Seventeenth Division reversed the Commission, awarded full backwages and other allowances without qualifications and diminutions, and remanded the case to the Labor Arbiter for proper computation. On reconsideration, the same Division declared the petitioners illegally dismissed, ordered their reinstatement without loss of seniority rights, awarded other benefits or their monetary equivalent, and granted attorney's fees equivalent to ten percent of the total monetary award. The employer sought relief from the Supreme Court, which found no reversible error, denied reconsideration, and the denial became final and executory.

The petitioners then moved for computation of the award. The Labor Arbiter approved the computation of the Commission's Examination and Computation Unit and ordered a writ of execution. The employer filed with the Commission a verified petition to modify the Labor Arbiter's order. The petitioners moved to dismiss that petition, and the Commission denied the motion to dismiss, then denied reconsideration. Meanwhile, because no temporary restraining order was issued, the Sheriff garnished the employer's funds and the petitioners received their awards. The Commission then gave due course to the employer's petition and nullified the Labor Arbiter's order, directing a recomputation. The petitioners came to the Supreme Court by petition for certiorari.

Facts

The petitioners claimed they were illegally dismissed by Monde M.Y. San Corporation. The Labor Arbiter dismissed their complaint, and the Commission affirmed. The Supreme Court reversed, and on reconsideration it declared them illegally dismissed, ordered reinstatement, and awarded full backwages, other benefits and attorney's fees. That ruling became final and executory in December 2011.

The petitioners then asked for computation of the award. The Labor Arbiter approved a computation totalling more than four million eight hundred thousand pesos, including attorney's fees, and issued a writ of execution. The employer protested that the computation included items that should not have been included, and filed a verified petition with the Commission to modify the order. The petitioners moved to dismiss, arguing that the verification and certification against forum shopping was signed by Keng Sun Mar, the employer's General Manager, who was not a real party in interest and had no board resolution, and that the verification was defective because he certified only that the contents were of his own knowledge.

The Commission denied the motion to dismiss, and denied reconsideration. Because no restraining order was issued, the Sheriff garnished the employer's funds and the petitioners received their awards. The Commission then gave due course to the employer's petition, ruled that the computation should be at the rate at the time of dismissal without salary increases or collective bargaining agreement benefits, nullified the Labor Arbiter's order, and ordered a recomputation. Hence this petition.

Issues

• Whether or not the National Labor Relations Commission committed grave abuse of discretion when it denied the petitioners' motion to dismiss on only one ground although two grounds were raised.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion when it denied reconsideration without passing upon the second ground, that the verification was fatally defective for failure to comply with the requirements for verification under the Rules of Court.
• Whether or not the National Labor Relations Commission committed grave abuse of discretion in granting the employer's petition despite the award having been fully satisfied, rendering the issue moot and academic.

Applicable Provisions

Section 4 of Rule 7 of the Rules of Court provides:

Sec. 4. Verification. - Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or accompanied by affidavit. A pleading is verified by an affidavit that the affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on authentic records. A pleading required to be verified which contains a verification based on "information and belief" or upon "knowledge, information and belief" or lacks a proper verification, shall be treated as an unsigned pleading.

This is the rule the petitioners invoke against the verification signed by the employer's General Manager.

Article 221 of the Labor Code, as quoted in the decision, provides:

the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process.

This provision supports the relaxation of technical rules in labor proceedings.

Section 1 of Rule XII of the 2011 National Labor Relations Commission Rules of Procedure provides:

SECTION 1. VERIFIED PETITION. – A party aggrieved by any order or resolution of the Labor Arbiter including those issued during execution proceedings may file a verified petition to annul or modify such or order or resolution. The petition may be accompanied by an application for the issuance of a temporary restraining order and/or writ of preliminary or permanent injunction to enjoin the Labor Arbiter, or any person acting under his/her authority, to desist from enforcing said resolution or order.

This is the remedy the employer used to challenge the computation, and it expressly reaches orders issued during execution proceedings.

Ruling

On the first issue, the Court found no grave abuse of discretion. The Court defined grave abuse of discretion as a capricious and arbitrary exercise of judgment equivalent to lack of jurisdiction, and noted that its meaning has been expanded to include any action contrary to the Constitution, the law or jurisprudence. On the verification signed by a corporate officer without a board resolution, the Court upheld its validity, citing its constant holding that while a corporate officer cannot exercise corporate powers without authority from the board, it has in many cases recognized the authority of corporate officers to sign verifications, including a general manager.

On the second issue, the Court held that even assuming the verification was defective, it would be improper to nullify the Commission's issuances on a mere technicality. The Court stressed that the requirement of verification is formal, not jurisdictional, and is simply intended to secure an assurance that the allegations are true and correct and not the product of imagination or speculation, and that the pleading is filed in good faith. Non-compliance does not necessarily render the pleading fatally defective, and the court may act on the pleading where strict compliance may be dispensed with in the ends of justice.

On the third issue, the Court held that the petition was not moot. An issue is moot when it ceases to present a justiciable controversy so that a declaration thereon would be of no practical use or value. Here, the fact that the petitioners had received their money claims based on an erroneous computation did not render the employer's petition moot, because the parties could still be afforded appropriate relief. To rule otherwise would be tantamount to injustice and unjust enrichment. The Court relied on its earlier rulings where employees who received backwages based on erroneous computations were ordered to refund the excess, and where records were remanded for correct computation with proper restitution.

Doctrine

A corporate officer, such as a general manager, may sign the verification and certification against forum shopping on behalf of the corporation even without a board resolution, because such officer is in a position to assure that the allegations are prepared in good faith and are true and correct.

Verification is a formal, not a jurisdictional, requirement. A defective verification does not render the pleading fatally defective, and in labor cases technical rules of procedure may be relaxed in the interest of substantial justice, consistent with Article 221 of the Labor Code.

Full satisfaction of a judgment award based on an erroneous computation does not render moot a timely petition to correct that computation. The correction may still be made, and any excess received must be restituted, lest the erroneous award result in unjust enrichment.

Disposition

The petition was denied, the Commission's resolutions and decision were affirmed, and the petitioners were ordered to make proper restitution to the employer for whatever excess amount may be determined under the new computation by the Labor Arbiter.

Remember This

Memorize this line: payment of an erroneous computation does not moot its correction, and the remedy is restitution of the excess. Examiners use this case to test verification by corporate officers without board resolution, the relaxation of technical rules in labor cases, and the moot and academic doctrine in execution proceedings.