AGG TRUCKING AND/OR ALEX ANG GAEID, PETITIONERS, VS. MELANIO B. YUAG, RESPONDENT.

AGG Trucking versus Yuag

The Case

This is a petition for review on certiorari brought by Alex Ang Gaeid, doing business as AGG Trucking, against his former driver Melanio Yuag. The dispute began as a complaint for illegal dismissal filed by Yuag after his employer told him to "take a rest." The case matters for two reasons: it is a clean illustration of the narrow office of the petition for certiorari under Rule 65, which corrects errors of jurisdiction and grave abuse of discretion but never errors of judgment; and it teaches that the finality of a labor tribunal's resolution is jurisdictional, so that a motion for reconsideration filed out of time cannot reopen a judgment that has already become final and executory.

Procedural History

Yuag filed a complaint for illegal dismissal, separation pay, and 13th month pay before the Regional Arbitration Branch of the Department of Labor. The labor arbiter ruled in his favor, declared the dismissal illegal, and awarded separation pay in lieu of reinstatement, together with proportionate 13th month pay and a 13th month pay differential. Gaeid appealed to the National Labor Relations Commission, which reversed the labor arbiter. The Commission held that Yuag had failed to prove that he was dismissed at all, and that at best he was on leave of absence without pay pending a new assignment. Yuag's motion for reconsideration was filed out of time, and the Commission denied it on that ground. Yuag then went to the Court of Appeals by petition for certiorari under Rule 65. The Court of Appeals brushed aside the timeliness issue, reversed the Commission, reinstated the labor arbiter's finding of illegal dismissal with modification, and added awards of full backwages, separation pay, temperate damages, and exemplary damages. Its motion for reconsideration having been denied, Gaeid came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

Alex Ang Gaeid operated a trucking business with forty-one delivery trucks and forty-one drivers, serving Busco Sugar Milling Company in Quezon, Bukidnon, and Coca-Cola Bottlers in Davao City and Cagayan de Oro City. Melanio Yuag had been employed as a driver since February 2002. He was paid on a commission basis of nine percent of his gross delivery per trip, was assigned a ten-wheeler truck, and delivered sacks of sugar from the Busco Sugar Mill to the port of Cagayan de Oro.

Beginning in late 2004, Gaeid noticed substantial shortages in Yuag's deliveries: thirty-two bags on one occasion and fifty bags on another. It was also reported that Yuag had sold bags of sugar along the way at a lower price and had been banned from the premises of the Busco Sugar Mill. Gaeid asked him for an explanation, and Yuag remained silent. Alarmed, Gaeid required his drivers to report their location by mobile phone and to travel in convoy. On the fourth of December 2004, twenty-one drivers, including Yuag, were sent to deliver sugar to the Coca-Cola plant in Davao City. Every driver reported his location and completion of delivery except Yuag, who could not be reached. The plant later reported an enormous shortage.

On the sixth of December 2004, Yuag reported to the office. Gaeid asked him to explain why he had not made contact and had not gone in convoy. Yuag answered that his cellphone battery had broken down. When confronted about the shortages, he again said nothing. Gaeid then told him to "just take a rest," or in the vernacular, "pahulay lang una." Yuag treated this as a dismissal, demanded that it be put in writing, and asked for separation pay. Gaeid asked him to come back the next day. Instead, Yuag went that very day to the Department of Labor and filed a complaint for illegal dismissal. When the delivered goods were later weighed, the shortage at the Coca-Cola plant was found to be one hundred eleven bags of sugar.

Issues

• Whether or not the Court of Appeals erred in reversing the National Labor Relations Commission without any finding of grave abuse of discretion amounting to lack or excess of jurisdiction.
• Whether or not the Court of Appeals erred in entertaining Yuag's petition notwithstanding that his motion for reconsideration before the Commission was filed out of time.
• Whether or not the Court of Appeals erred in granting awards beyond what was prayed for in the complaint, such as temperate and exemplary damages.

Applicable Provisions

Rule 65, Section 8 of the Rules of Court, on proceedings after comment is filed, provides:

Section. 8. Proceedings after comment is filed. After the comment or other pleadings required by the court are filed, or the time for the filing thereof has expired, the court may hear the case or require the parties to submit memoranda. If after such hearing or filing of memoranda or upon the expiration of the period for filing, the court finds that the allegations of the petition are true, it shall render judgment for such relief to which the petitioner is entitled.

This provision defines what relief a court may grant in a certiorari proceeding, and the Court used it to show that the Court of Appeals could have granted other relief only if the Commission's resolution had not yet become final.

Rule VII, Section 14 of the 2005 Rules of Procedure of the National Labor Relations Commission, on motions for reconsideration, provides:

Rule VII, Section 14. Motions for Reconsideration. -- Motions for reconsideration of any order, resolution or decision of the Commission shall not be entertained except when based on palpable or patent errors, provided that the motion is under oath and filed within ten (10) calendar days from receipt of the order, resolution or decision, with proof of service that a copy of the same has been furnished, within the reglementary period, the adverse party and provided further, that only one such motion from the same party shall be entertained.

This is the ten-day period that Yuag missed, and it is the provision that made the Commission's resolution final and beyond modification.

Rule VIII, Section 2 of the same Rules, on the finality of decisions of the Commission, provides:

Rule VIII, Section 2. Finality of decisions of the Commission. -- (a) Finality of the decisions, resolutions or orders of the Commission. Except as provided in Rule XI, Section 10, the decisions, resolutions orders of the Commission/Division shall become executory after (10) calendar days from receipt of the same.

This provision fixes the moment the Commission's resolution became immutable, which the Court of Appeals disregarded.

Ruling

On the first issue, the Court held that the petition was impressed with merit. A writ of certiorari is a remedy to correct errors of jurisdiction, and it must clearly show that the public respondent acted with grave abuse of discretion amounting to lack or excess of jurisdiction. The Court of Appeals forgot that its function was to determine whether the Commission had gravely abused its discretion; instead, it reviewed the records and ruled on issues no longer disputed, such as the existence of an employer-employee relationship, while never discussing the pivotal issue of whether telling Yuag to take a rest was a positive act of dismissal. The Court found the Commission's resolution neither whimsical nor unreasonable, and it corrected the Court of Appeals' confusion of the labor terms "paid on commission," "pakyaw," and "seasonal worker," reminding that a regular status of employment is not based on how the salary is paid.

On the second issue, the Court held that when Yuag failed to file his motion for reconsideration within the reglementary period, the Commission's resolution attained finality and could no longer be modified by the Court of Appeals. The Court quoted its own settled rule:

[I]t is a fundamental rule that when a final judgment becomes executory, it thereby becomes immutable and unalterable. The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest Court of the land. The only recognized exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries which cause no prejudice to any party, and, of course, where the judgment is void. Any amendment or alteration which substantially affects a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose.

Prescriptive periods, the Court stressed, are not mere technicalities to be brushed aside at every cry of injustice; the winning party has a correlative right to enjoy the finality of the resolution of his case.

On the third issue, the Court held that since the Court of Appeals could no longer modify the Commission's resolution, it logically could not modify the awards either. Had the resolution not yet attained finality, the Court of Appeals could have granted other relief under Rule 65, Section 8, even if not specifically prayed for. But the resolution had become final and executory twenty-five days before Yuag filed his motion for reconsideration, so the subsequent proceedings and modifications were null and void.

Doctrine

First, the petition for certiorari under Rule 65 is narrow in scope and inflexible in character; it issues only to correct errors of jurisdiction and grave abuse of discretion amounting to lack or excess of jurisdiction, never to correct errors of judgment, which are reviewable only by appeal. Grave abuse of discretion means capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, exercised arbitrarily by reason of passion, prejudice, or personal hostility, and it must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined. Mere abuse of discretion is not enough.

Second, a motion for reconsideration filed out of time cannot reopen a final and executory judgment of the National Labor Relations Commission. Once the ten-day period under Rule VII, Section 14 lapses, the resolution becomes executory under Rule VIII, Section 2 and becomes immutable and unalterable; any alteration that substantially affects it is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. The only recognized exceptions are the correction of clerical errors, nunc pro tunc entries that cause no prejudice to any party, and judgments that are void.

Third, a regular status of employment is not based on how the salary is paid; an employee may be paid purely on commission and still be considered a regular employee, and a seasonal employee may likewise be considered regular.

Disposition

The petition was granted; the decision and resolution of the Court of Appeals were set aside, and the resolutions of the National Labor Relations Commission were affirmed and sustained, so that Gaeid won and Yuag recovered nothing.

Remember This

Memorize this line: certiorari corrects errors of jurisdiction, not errors of judgment, and a motion for reconsideration filed out of time cannot reopen a final and executory judgment of the National Labor Relations Commission. Examiners use this case to test the grave abuse of discretion standard under Rule 65 and the immutability of final judgments in labor proceedings.