WILLIAM DAYAG,  EDUARDO CORTON, EDGARDO CORTON, LEOPOLDO NAGMA,  ALOY FLORES, ROMEO PUNAY AND EDWIN DAYAG, PETITIONERS, VS. HON. POTENCIANO S. CANIZARES, JR., NATIONAL LABOR REL…

Dayag versus Canizares

The Case

This is a special civil action for certiorari brought by seven construction workers against a labor arbiter and the National Labor Relations Commission. The workers were dismissed from a construction project in Cebu City and filed their complaint for illegal dismissal and money claims in Manila. The employer moved to transfer the case to Cebu, and the labor arbiter and the Commission both granted the transfer. The workers came to the Supreme Court to challenge that transfer. The case matters because it settles two questions every labor practitioner must know: whether a defective motion to transfer venue can be nullified on technical grounds, and whether the rule on venue in labor cases is mandatory or merely permissive.

Procedural History

The workers filed their complaint with the National Capital Region Arbitration Branch of the National Labor Relations Commission. The case was assigned to Labor Arbiter Potenciano Canizares, Junior. Instead of attending the initial hearings, the employer filed a motion to transfer the case to the Regional Arbitration Branch of Region Seven in Cebu City. The labor arbiter granted the motion and ordered the transmittal of the case to Cebu. The workers appealed to the Commission, which dismissed the appeal for lack of merit. On reconsideration, the Commission reversed itself and remanded the case to the National Capital Region for further proceedings. The employer then moved for reconsideration, and the Commission reversed itself again, reinstating the transfer to Cebu City and warning that no further motion of a similar nature would be entertained. The workers then came to the Supreme Court by petition for certiorari.

Facts

In 1990, Alfredo Young, a building contractor doing business under the firm name Young's Construction, hired the seven petitioners as tower crane operators. They first worked at his construction site at Platinum 2000 in San Juan, Metro Manila. In November 1991, they were transferred to Cebu City to work on his Shoemart Cebu project. They worked in Cebu until February 1993, except for Romeo Punay, who stayed only until September 29, 1992, and Leopoldo Nagma, who stayed until October 21, 1992.

In January 1993, William Dayag asked permission to go to Manila to attend to family matters. He was allowed to go but was not paid for that period, allegedly because of his accountability for the loss of certain construction tools. Eduardo Corton had earlier left on January 16, 1993, supposedly due to harassment by Young. In February 1993, Edgardo Corton, Aloy Flores, and Edwin Dayag also left Cebu for Manila, allegedly for the same reason.

The workers then banded together and, on March 11, 1993, filed a complaint for illegal dismissal, non-payment of wages, overtime pay, premium pay, holiday pay, service incentive leave, thirteenth month pay, and damages. Young moved to transfer the case to Cebu, claiming that the workplace where the workers were regularly assigned was Cebu City. He submitted a certificate of registration of business name showing his company's address in Cebu City, a business permit issued by the Cebu City mayor, and a police certification that the workers had been booked for qualified theft upon his complaint. The workers opposed, arguing that all of them except Punay were by then residents of Metro Manila and could not afford trips to Cebu, and that the employer had its main office in Quezon City. Young replied that the Corinthian Gardens address was his residence, which he also used as a correspondent office for his construction firm.

Issues

• Whether or not the labor arbiter acted with grave abuse of discretion in entertaining the motion to transfer venue even though it did not specify the time and date of hearing as required by the Rules of Court.
• Whether or not the employer waived his right to question venue by filing what was allegedly a position paper simultaneously with his motion to transfer.
• Whether or not the proper venue of the case is Cebu City, where the workers were assigned when the cause of action arose.

Applicable Provisions

Section 1, paragraph (a), of Rule Four of the New Rules of Procedure of the National Labor Relations Commission provides:

All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant or petitioner. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose.

This is the venue rule the labor arbiter applied when he ordered the transfer to Cebu City.

Section 1, paragraph (c), of the same Rule provides:

When improper venue is not objected to before or at the time of the filing of position papers, such question shall be deemed waived.

This answers the claim that the employer waived his objection to venue.

Section 1, paragraph (d), of the same Rule provides:

The venue of an action may be changed or transferred to a different Regional Arbitration Branch other than where the complaint was filed by written agreement of the parties or when the Commission or Labor Arbiter before whom the case is pending so orders, upon motion by the proper party in meritorious cases.

This is the authority for transferring venue upon motion of a proper party.

Article 221 of the Labor Code provides:

Rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that 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 is the basis for relaxing technical rules in labor proceedings.

Ruling

On the first issue, the Court held that there was no grave abuse of discretion. The application of technical rules of procedure in labor cases may be relaxed to serve the demands of substantial justice, as Article 221 of the Labor Code commands. While a motion that does not comply with the notice requirements of the Rules of Court should not ordinarily be accepted for filing, the Court has held that where a rigid application of the rule will result in a manifest failure or miscarriage of justice, technicalities may be disregarded. Litigations should, as much as possible, be decided on the merits and not on technicalities. Moreover, the workers were able to file an opposition to the motion, which the labor arbiter undisputedly considered when he issued his order. There was therefore no showing that the workers were unduly prejudiced by the motion's failure to give notice of hearing.

On the second issue, the Court held that there was no waiver. Even if the motion was at the same time a position paper, Section 1, paragraph (c), of Rule Four provides that there is no waiver of improper venue if a party questions venue simultaneously with the filing of a position paper. Nowhere in the New Rules is there a requirement that a party must object solely to venue on penalty of waiving the same. The employer seasonably made representations to transfer the venue in a proper motion, and he consistently and persistently contested venue even before trial, so no waiver by estoppel of conduct can be attributed to him.

On the third issue, the Court held that the petition had been overtaken by events. In the recent case of Sulpicio Lines versus the National Labor Relations Commission, the Court held that the question of venue essentially pertains to the trial and relates more to the convenience of the parties than to the substance and merits of the case. The permissive rules on venue are intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice. With more reason does this apply in labor cases, because the State shall afford full protection to labor. The Court quoted Sulpicio Lines:

This provision is obviously permissive, for the said section uses the word may, allowing a different venue when the interests of substantial justice demand a different one. In any case, as stated earlier, the Constitutional protection accorded to labor is a paramount and compelling factor, provided the venue chosen is not altogether oppressive to the employer.

The rationale is that the worker, being the economically disadvantaged party, must have the nearest governmental machinery placed at his immediate disposal, and the other party is not to be given the choice of another competent agency sitting in another place, as this will unduly burden the worker. Here, the employer's residence in Corinthian Gardens also serves as his correspondent office. Filing the suit in Manila will not cause him as much inconvenience as it would the workers, now residents of Metro Manila, if the case were heard in Cebu. Hearing the case in Manila would clearly expedite proceedings and bring about the speedy resolution of the case.

Doctrine

First, the application of technical rules of procedure in labor cases may be relaxed to serve the demands of substantial justice, consistent with Article 221 of the Labor Code. A motion to transfer venue that fails to specify the time and date of hearing is not automatically void where the opposing party was heard and suffered no prejudice.

Second, there is no waiver of the defense of improper venue when a party questions venue simultaneously with the filing of his position paper, because Section 1, paragraph (c), of Rule Four of the New Rules of the National Labor Relations Commission requires the objection to be made before or at the time of the filing of position papers.

Third, the rule on venue in labor cases is permissive, not mandatory. The word "may" in Section 1, paragraph (a), of Rule Four allows a different venue when the interests of substantial justice demand it, provided the venue chosen is not altogether oppressive to the employer. The constitutional protection accorded to labor is a paramount and compelling factor in choosing venue.

Disposition

The Court granted the petition and set aside the Commission's resolution transferring the case to Cebu City, reinstating and affirming instead its earlier resolution remanding the case to the National Capital Region Arbitration Branch in Manila.

Remember This

The one line to memorize: the rule on venue in labor cases is permissive, and the constitutional protection accorded to labor is a paramount and compelling factor, provided the venue chosen is not altogether oppressive to the employer. Examiners like to use this case on the relaxation of technical rules in labor proceedings, on the waiver of venue under the Commission's rules, and on the worker's right to choose a venue convenient to him.