SAMAHAN NG MGA MANGGAGAWA SA HYATT – NUWHRAIN-APL, PETITIONER, VS. VOLUNTARY ARBITRATOR FROILAN M. BACUNGAN AND HYATT REGENCY MANILA, RESPONDENTS.

Samahan ng mga Manggagawa sa Hyatt versus Voluntary Arbitrator Bacungan

The Case

This is a petition for review on certiorari brought by a legitimate labor union of rank-and-file hotel employees against a voluntary arbitrator and the hotel that employed them. The union had lost before the voluntary arbitrator on the status of four workers, then lost again before the Court of Appeals, which dismissed its special civil action for certiorari as the wrong remedy and as filed out of time. The case matters for two reasons: it settles the procedural question of how a party may challenge a voluntary arbitrator's award, and it illustrates the substantive rules on independent contracting and project employment in the hotel industry.

Procedural History

The dispute began in the grievance machinery under the collective bargaining agreement. When the parties could not settle it, they elevated it to voluntary arbitration and selected Dean Froilan Bacungan as voluntary arbitrator. On 11 January 2000, the voluntary arbitrator rendered a decision holding that Mario Dacles and Teodoro Valencia were employees of City Service Corporation, not of the hotel, and that Amelia Dalmacio and Renato Dazo were project employees who could not be terminated on the dates stated but could be terminated upon closure of the flower shop or for cause provided by law. The union's motion for reconsideration was denied on 10 July 2000.

The union then went to the Court of Appeals by a special civil action for certiorari. In a resolution dated 16 November 2000, the Court of Appeals dismissed the petition outright: certiorari was the wrong remedy because the correct recourse was a petition for review under Rule 43; the docket fees paid were short; the petition lacked a certified true copy of the motion for reconsideration; and, treated as a petition for review, it was filed forty-five days beyond the reglementary period. The motion for reconsideration was denied on 10 July 2001. The union then came to the Supreme Court by petition for review on certiorari.

Facts

In 1995 and 1996, Mario Dacles and Teodoro Valencia respectively assumed their duties as glass cleaners at Hyatt Regency Manila, pursuant to a cleaning service contract between the hotel and City Service Corporation. In April 1998, the hotel hired Amelia Dalmacio and Renato Dazo on a casual basis as florist and sales clerk, and as helper and driver, respectively. After their contracts expired on 30 August 1998, they continued reporting for work, and on 16 September 1998 they signed another employment contract with the hotel.

During a Labor Management Committee meeting, the union questioned the status of these four workers as non-regular employees. On 19 April 1999, the union and the hotel agreed to submit the matter to the grievance machinery. The union claimed the four were regular employees given the nature of their functions and the length of their service. The hotel maintained that Dalmacio and Dazo were project employees whose employment was co-terminous with the flower shop outlet, and that Dacles and Valencia were employees of City Service Corporation, an independent contractor.

On 16 September 1999, the hotel dismissed Dacles and Valencia and disallowed them from reporting for work, on the ground that the service contract with City Service Corporation had been terminated. Unable to settle the dispute through grievance, the parties went to voluntary arbitration, which produced the decision now under review.

Issues

• Whether or not the proper remedy to assail a decision of a voluntary arbitrator is a special civil action for certiorari under Rule 65 rather than a petition for review under Rule 43.
• Whether or not the Court of Appeals erred in dismissing the petition for failure to comply with the requirements of Rule 43.

Applicable Provisions

Section 2 of Rule 43 of the 1997 Rules of Civil Procedure, as quoted in the decision, provides:

This Rule shall not apply to judgments or final orders issued under the Labor Code of the Philippines.

The union invoked this exception to argue that a voluntary arbitrator's award, being issued under the Labor Code, cannot be appealed by petition for review.

Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, as quoted in the decision, provides:

Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees' Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

This is the statutory exception the Court examined in holding that voluntary arbitrators nonetheless fall within the appellate reach of the Court of Appeals.

Ruling

On the first issue, the Court held that the petition lacks merit. The question had already been settled in Luzon Development Bank versus Association of Luzon Development Bank Employees: the decision or award of a voluntary arbitrator is appealable to the Court of Appeals under the procedure now embodied in Rule 43, just like the awards of the quasi-judicial agencies, boards, and commissions, consistent with the original purpose of providing a uniform procedure for appellate review of adjudications of all quasi-judicial entities. The Court reiterated this in Alcantara versus Court of Appeals and Nippon Paint Employees Union versus Court of Appeals, and explained that notwithstanding Section 2 of Rule 43, the Luzon Development Bank ruling still stands, because that provision merely reiterates the exception in Section 9 of Batas Pambansa Blg. 129, which the Court had already taken into account.

On the second issue, the Court held that although rules of procedure may sometimes be relaxed, and the Court of Appeals could have treated the certiorari petition as a petition for review, the petition was filed beyond the reglementary period. The Court stressed that the use of an erroneous mode of appeal is a cause for dismissal, and that a petition for certiorari is not a substitute for a lost appeal.

Reaching the merits, the Court found no reversible error. Dacles and Valencia were employees of City Service Corporation, an independent contractor, whose services may be terminated upon expiration of the cleaning service contract, there being no evidence that City Service Corporation was engaged in labor-only contracting. Dalmacio and Dazo were project employees whose employment may be terminated only upon closure of the flower shop, in accord with their employment contracts. The Court also applied the settled rule that findings of fact of administrative agencies and quasi-judicial bodies which have acquired expertise are generally accorded not only great respect but even finality, unless grave abuse of discretion is shown or the findings were arrived at arbitrarily or in utter disregard of the evidence.

Doctrine

A decision or award of a voluntary arbitrator is appealable to the Court of Appeals by petition for review under Rule 43, not by a special civil action for certiorari under Rule 65. The exception in Section 2 of Rule 43 for judgments or final orders issued under the Labor Code does not exclude voluntary arbitrators, because that provision merely restates the exception in Section 9 of Batas Pambansa Blg. 129, which the Court already considered in Luzon Development Bank. The use of an erroneous mode of appeal is a cause for dismissal, and certiorari is not a substitute for a lost appeal. On the merits, workers supplied under a genuine service contract with an independent contractor are employees of that contractor, absent proof of labor-only contracting; and project employees may be terminated upon the completion of the project for which they were engaged.

Disposition

The petition was denied and the resolutions of the Court of Appeals were affirmed, with costs against the petitioner union.

Remember This

Memorize the line: a voluntary arbitrator's award is reviewed by the Court of Appeals through a petition for review under Rule 43, and certiorari is not a substitute for a lost appeal. Examiners use this case to test the proper remedy against voluntary arbitration awards and the finality accorded to the factual findings of labor quasi-judicial bodies.