SAMAHAN NG MGA MANGGAGAWA SA HYATT (SAMASAH-NUWHRAIN), PETITIONER, VS. HON. VOLUNTARY ARBITRATOR BUENAVENTURA C. MAGSALIN AND HOTEL ENTERPRISES OF THE PHILIPPINES, INC., RESPOND…

Samahan ng mga Manggagawa sa Hyatt versus Magsalin

The Case

This is a labor case that reached the Supreme Court through two consolidated petitions for review on certiorari. On one side is the Samahan ng mga Manggagawa sa Hyatt, the certified bargaining representative of the rank-and-file employees of the Hyatt Regency Manila. On the other side are the Voluntary Arbitrator Buenaventura C. Magsalin and Hotel Enterprises of the Philippines, Inc., the corporation that owns and operates the hotel. The dispute began with the repeated refusal of a union officer, Angelito Caragdag, to submit to the hotel's bag inspection and body frisking, and it ended with his dismissal. The case matters for two reasons. First, it settles the procedural question of how a party may challenge a decision of a voluntary arbitrator. Second, it fixes the limits of compassion in labor law, teaching that financial assistance grounded on social justice cannot be awarded to an employee validly dismissed for serious misconduct.

Procedural History

The union brought the dismissal of Caragdag to voluntary arbitration upon the agreement of the parties. On May 6, 2002, the Voluntary Arbitrator rendered a decision holding that the three separate suspensions were valid, that the dismissal was legal, and that the hotel's rule on repeated offenses was reasonable. For humanitarian considerations, however, the arbitrator ordered the hotel to grant Caragdag financial assistance of One Hundred Thousand Pesos. Both parties sought reconsideration, and the arbitrator denied both motions on May 26, 2003.

The union then went to the Court of Appeals by a petition for certiorari. The Court of Appeals dismissed the petition outright, ruling that the proper remedy was a petition for review under Rule 43 and that, even if treated as such, the petition was filed beyond the fifteen-day reglementary period. The union's motion for reconsideration was denied. Meanwhile, the hotel also filed its own petition for review with the Court of Appeals, arguing that the award of financial assistance was erroneous. The Court of Appeals affirmed the findings of the Voluntary Arbitrator but modified the decision by deleting the award of financial assistance. The union's motion for reconsideration was denied. The union then filed two petitions for review on certiorari before the Supreme Court, which were consolidated because they arose from the same origin, involved the same parties, and raised interrelated issues.

Facts

On January 31, 2001, the hotel's General Manager issued a memorandum informing all employees that security personnel had been instructed to conduct thorough bag inspection and body frisking at every entrance and exit of the hotel. On February 3, 2001, Caragdag, a waiter and a director of the union, refused to be frisked. He refused again on February 6, 2001. For these, the hotel imposed on him a reprimand for the first incident and a three-day suspension for the second, both in accordance with the hotel's Code of Discipline.

On February 22, 2001, while Caragdag's immediate superior was counseling two staff members in the training room, Caragdag opened the door and yelled at the two employees with an enraged look, telling them that they were stubborn and that he had told them not to speak to management while the case was ongoing. His superior required him to explain, found the explanation unsatisfactory, and held him liable for threatening and intimidating a superior. He was suspended for seven days. On March 2, 2001, Caragdag again left his work assignment during official hours without prior permission from his department head, and for this he was suspended for three days.

Because of the succession of infractions, the hotel required Caragdag to explain why its rule penalizing an employee who commits three suspensions within a twelve-month period should not be enforced against him. An investigation board was formed and a hearing was set, but neither Caragdag nor the union president attended despite notice. The board resolved to dismiss him, and on June 1, 2001, the hotel sent him a Notice of Dismissal. The union questioned the dismissal, and the dispute was referred to voluntary arbitration.

Issues

• Whether or not the Court of Appeals erred in dismissing outright the petition for certiorari on the ground that the same is an improper mode of appeal.
• Whether or not the Court of Appeals erred in deleting the award of financial assistance in the amount of One Hundred Thousand Pesos to Angelito Caragdag.

Applicable Provisions

Section 1 of Rule 43 of the 1997 Rules of Civil Procedure, as amended, provides:

SECTION 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the x x x, and voluntary arbitrators authorized by law.

This provision is the basis for the ruling that a decision of a voluntary arbitrator must be elevated to the Court of Appeals by petition for review, not by certiorari.

Section 3 of Rule 43 provides:

SEC. 3. Where to appeal. An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner therein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law.

This fixes the Court of Appeals as the proper forum for the appeal.

Section 4 of Rule 43 provides:

SEC. 4. Period of appeal. The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of the denial of petitioner's motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. x x x.

This is the fifteen-day period that the union failed to observe.

Article 282 of the Labor Code, as amended, is the provision on just causes for dismissal, and the Court cites it in ruling that a series of irregularities, when put together, may constitute serious misconduct.

Ruling

On the first issue, the Court held that the Court of Appeals did not err. A decision or award of a voluntary arbitrator is appealable to the Court of Appeals by petition for review under Rule 43. The Court explained that the question had already been settled, and that the ruling stands notwithstanding the exception in Section 2 of Rule 43 for judgments issued under the Labor Code. The Court quoted its earlier ruling:

The question on the proper recourse to assail a decision of a voluntary arbitrator has already been settled in Luzon Development Bank v. Association of Luzon Development Bank Employees, where the Court held that the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95 (now embodied in Rule 43 of the 1997 Rules of Civil Procedure), just like those of the quasi-judicial agencies, boards and commissions enumerated therein, and consistent with the original purpose to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities.

Since the union received the denial of its motion for reconsideration on May 26, 2003, it had fifteen days within which to file a petition for review. It filed a petition for certiorari only on August 1, 2003, beyond the reglementary period. The Court refused to relax the rules, stressing that procedural rules are not to be disdained as mere technicalities and may not be ignored to suit the convenience of a party.

On the second issue, the Court likewise held that the Court of Appeals did not err. The grant of separation pay or other financial assistance to an employee dismissed for just causes is based on equity, but it is allowed only when the cause of dismissal is other than serious misconduct or causes reflecting on the employee's moral character. The Court quoted its ruling:

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.

The Court found that Caragdag's dismissal was due to several instances of willful disobedience to reasonable company rules, all committed within a little over a month. These acts constituted serious misconduct. To award him financial assistance would be to reward him for the grave misconduct he committed. The Court closed with the reminder that social justice is extended only to those who deserve its compassion.

Doctrine

A Bar candidate should retain two rules. First, the decision or award of a voluntary arbitrator is appealable to the Court of Appeals by a petition for review under Rule 43, filed within fifteen days from notice of the award or of the denial of a motion for reconsideration. A petition for certiorari is the wrong remedy and will be dismissed. Second, separation pay or financial assistance as a measure of social justice may be granted only when the employee is validly dismissed for causes other than serious misconduct or causes reflecting on his moral character. A series of irregularities, when put together, may constitute serious misconduct, which under Article 282 of the Labor Code is a just cause for dismissal. Social justice is not a refuge for those who have tainted the cause of labor with the blemishes of their own character.

Disposition

The Supreme Court denied the petitions and affirmed the challenged resolutions and decision of the Court of Appeals, with costs against the union.

Remember This

The one line to memorize is this: separation pay as a measure of social justice is allowed only when the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Examiners use this case to test the correct mode of appeal from a voluntary arbitrator's award and the limits of compassion in labor law.