PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, EFREN MANABO AND IRENEO SORIANO, RESPONDENTS.

Philippine National Construction Corporation versus National Labor Relations Commission

The Case

This is a special civil action of certiorari brought by the Philippine National Construction Corporation, a government owned and controlled corporation engaged in general construction here and abroad, against the National Labor Relations Commission and two of its former workers, Efren Manabo and Ireneo Soriano. The company asks the Supreme Court to annul the labor commission's decision, which had reversed the Labor Arbiter, declared the two men regular rather than project employees, and awarded them separation pay. The case matters far beyond the money involved: it is the Court's sharp reminder that the constitutional right to due process belongs to the employer as much as to the employee, and that a labor tribunal which decides an appeal without ever notifying the other side renders a judgment that is void.

Procedural History

The two workers filed separate complaints for illegal dismissal and separation pay before the Labor Arbiter. On June 26, 1990, the Labor Arbiter dismissed both complaints for lack of merit, holding that the men were project employees. The workers appealed to the National Labor Relations Commission. On January 13, 1992, the Commission reversed the Labor Arbiter, found the men to be regular employees, and ordered the payment of separation pay to each. The company did not move for reconsideration, explaining that it had never been furnished a copy of the workers' memorandum of appeal and did not even know an appeal had been taken. Instead, it went straight to the Supreme Court on certiorari. The Solicitor General, asked to comment, recommended that the Commission's decision be set aside for denial of due process and that the case be remanded so the company could be heard.

Facts

Efren Manabo was hired as a laborer in July 1976 at the company's local project. In October 1977 he was transferred to the company's international operation in Najran, Kingdom of Saudi Arabia, first as a shovel raker and later as an asphalt distributor. When that project was completed he was repatriated to the Philippines in August 1983, and after his return he was given no new assignment, which he took to be illegal dismissal.

Ireneo Soriano was hired in November 1975 as a lead mechanic in the company's equipment and management department. In August 1981 he too was transferred to the Najran project as a lead mechanic. Upon completion of the project he was repatriated in June 1984, and he likewise claimed that the company failed to assign him to any local project, which to him amounted to separation from employment. Between them the two men had served roughly seven and nine years.

The company's position was that both were project employees, hired for specific projects whose tenure was fixed for the duration of those projects, so that it was the completion of the project that ended their employment and no separation pay was due under Policy Instruction Number 20. The Labor Arbiter agreed with the company. The Commission disagreed, found them regular employees, and awarded Manabo seventy four thousand six hundred ninety two pesos and eighty centavos, and Soriano one hundred eleven thousand one hundred ninety six pesos and eighty centavos. What the record never showed was that the company was ever told of the appeal.

Issues

• Whether or not the National Labor Relations Commission violated the company's right to due process when it resolved the workers' appeal without furnishing the company a copy of the memorandum of appeal or giving it any opportunity to be heard.
• Whether or not the company's failure to file a motion for reconsideration before coming to the Supreme Court barred its petition for certiorari.
• Whether or not the workers' own failure to serve a copy of their appeal on the company prevented the appeal from being perfected or deprived the Commission of jurisdiction.

Applicable Provisions

The decision does not quote a constitutional text but rests on the due process guarantee, which the Court states in its own words:

In its most basic sense, the right to due process is simply that every man is accorded a reasonable opportunity to be heard.

This is the measure against which the Commission's conduct is judged, and it is the reason the judgment below cannot stand.

On the procedural point, the Court cites the rule of the Commission's own New Rules of Procedure requiring proof of service of the appeal on the other party:

While the New Rules of Procedure of the NLRC require proof of service on the other party of the appeal, non-compliance thereof will present no obstacle to the perfection of the appeal nor does it amount to a jurisdictional defect to the NLRC's taking cognizance thereof.

This distinguishes the workers' procedural lapse, which is excused, from the Commission's own omission, which is not.

Ruling

On the first issue, the Court ruled for the company. The record was bereft of any indication that the company was ever informed or notified of the appeal. There was no proof it was furnished a copy of the memorandum of appeal, it was never required to comment, and the Commission's decision made no reference to any argument, position, or comment from the company. The Court held that the Commission's grave omission to afford the company a chance to be heard on appeal was a clear violation of its constitutional right and had the effect of rendering its judgment null and void. It laid down the governing principle:

It is a cardinal rule in law that a decision or judgment is fatally defective if rendered in violation of a party-litigant's right to due process.

On the second issue, the Court held that the company's failure to move for reconsideration was understandable, because it had been deprived of due process. A motion for reconsideration may be dispensed with before an action for certiorari where the decision is a patent nullity or where the petitioner was deprived of due process.

On the third issue, the Court held that the fault lay with the Commission, not with the workers. Non-compliance with the requirement of proof of service does not obstruct the perfection of the appeal nor create a jurisdictional defect. But while the law excuses the workers from notifying the other party, no reason could excuse the Commission from informing the company of the appeal and giving it an opportunity to be heard. Such an omission is of the gravest nature and cannot be sanctioned for whatever reason.

The Court closed with a warning that while the intendment of the laws is to favor the employee, this in no way implies that the employer is not entitled to due process, and it strongly reminded the Commission of its duty to uphold and inspire confidence in the legal system.

Doctrine

First, due process is a two edged guarantee: the policy of favoring the working man does not strip the employer of the constitutional right to be heard. Second, a judgment rendered in violation of a party's right to due process is fatally defective and void, and may be attacked directly on certiorari. Third, a motion for reconsideration may be dispensed with before filing a petition for certiorari where the assailed decision is a patent nullity or where the petitioner was deprived of due process. Fourth, the appellant's failure to serve a copy of the appeal on the adverse party does not prevent perfection of the appeal or deprive the labor tribunal of jurisdiction, but the tribunal itself commits a grave violation when it fails to notify that party and give it an opportunity to be heard. The rule to write in an answer is the Court's own formulation: the right to due process is simply that every man is accorded a reasonable opportunity to be heard, and its very concept contemplates freedom from arbitrariness.

Disposition

The company won: the Supreme Court set aside the decision of the National Labor Relations Commission and remanded the case to it for further proceedings so that the company could be heard, with a strong reminder that all proceedings before it must satisfy the constitutional requirements of due process.

Remember This

Memorize the line that a decision rendered in violation of a party's right to due process is fatally defective and void, and that this protection belongs to the employer as well as the employee. Examiners use this case in labor procedure and constitutional law to test whether a labor tribunal's failure to notify the adverse party of an appeal voids its judgment, and whether a motion for reconsideration may be skipped on certiorari when due process was denied.