TOYOTA ALABANG, INC., PETITIONER, VS. EDWIN GAMES, RESPONDENT.

Toyota Alabang versus Games

The Case

This is a labor case in which Toyota Alabang, Incorporated, the employer, asks the Supreme Court to reverse the rulings that found it liable for illegally dismissing its former foreman, Edwin Games. The employer lost before the labor arbiter, lost on appeal before the National Labor Relations Commission, and lost again before the Court of Appeals. What reaches the Supreme Court is not the merits of the dismissal but a narrower and very examinable question: may a case that has already become final and executory be reopened on the ground that the employer's own counsel was negligent? The case matters because it fixes the boundaries of the appeal bond requirement, the finality of labor arbiter decisions, and the rule that the negligence of counsel binds the client.

Procedural History

Edwin Games filed a complaint for illegal dismissal, nonpayment of benefits, and damages before the labor arbiter. Toyota Alabang failed to file its position paper despite several resettings, and the case was declared submitted for decision. The labor arbiter ruled against the employer, ordering it to pay a monetary award. No motion for reconsideration was filed, so the decision became final and executory. A writ of execution followed, which the employer sought to quash while praying that the proceedings be reopened. The labor arbiter denied the motion.

Toyota Alabang appealed to the National Labor Relations Commission. The Commission denied due course to the appeal for failure to show proof of its security deposit for the appeal bond, and on the merits held that no appeal may be taken from an order of execution of a final judgment. The employer then went to the Court of Appeals by petition for certiorari. The Court of Appeals dismissed the petition, holding that the Commission did not gravely abuse its discretion, that a final judgment is no longer appealable, and that the employer's own negligence caused it to lose its right to appeal.

Toyota Alabang filed a petition for review on certiorari with an urgent prayer for injunctive relief before the Supreme Court. The Court denied the petition by minute resolution for failure to show reversible error. The employer moved for reconsideration, and it is that motion which the Court resolves in this decision.

Facts

Edwin Games worked as a foreman for Toyota Alabang. He was allegedly found with a box of the company's vehicle lubricants inside the car he was driving, and the company charged him with qualified theft before the trial court. Almost two years later, Games filed a complaint for illegal dismissal, nonpayment of benefits, and damages against the company.

The company, through counsel, failed to file its position paper on the date set. Several resettings followed. At one hearing the company manifested that its handling lawyer was no longer connected with it. At the next hearing it failed to appear and again did not submit its pleading. The case was then declared submitted for decision, and the labor arbiter ruled against the company, ordering it to pay separation pay, back wages, service incentive leave pay, and attorney's fees. The company did not move for reconsideration, so the ruling became final and executory.

When the labor arbiter issued a writ of execution, the company sought to quash it and asked that the proceedings be reopened, blaming its counsel's negligence. The labor arbiter refused. The company appealed to the National Labor Relations Commission, which denied the appeal for failure to comply with the appeal bond requirement and because no appeal lies from an order of execution of a final judgment. The Court of Appeals affirmed, and the Supreme Court initially denied the petition before ruling on the motion for reconsideration.

Issues

• Whether or not the Court of Appeals committed a reversible error in refusing to reopen the proceedings below.
• Whether or not the appeal bond requirement applies to an appeal from a labor arbiter's denial of a motion to quash a writ of execution.
• Whether or not the negligence of the employer's counsel justifies reopening a case that has already become final and executory.

Applicable Provisions

Article 223 of the Labor Code, as echoed in Section 6, Rule VI of the NLRC Rules of Procedure, provides:

In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorney's fees.

This provision is the basis for denying due course to the employer's appeal, because the labor arbiter's decision involved a monetary award and no valid bond was posted.

Section 5, Rule V of the NLRC Rules of Procedure, on prohibited pleadings and motions, provides:

Appeal from orders issued by the Labor Arbiter in the course of execution proceedings.

This provision supports the Commission's refusal to entertain the appeal, since what was elevated was precisely an order issued in the course of execution.

Ruling

On the first issue, the Court held that the Court of Appeals correctly refused to reopen the proceedings. Reopening a case is an extraordinary remedy which, if abused, can make a complete farce of a decision that has long become final and executory. There must be good cause on the movant's part, and here the employer itself was negligent: it was present when told to file its position paper, it never filed one, it failed to appear at the later hearing despite manifesting that it no longer had counsel, and it absented itself from all subsequent proceedings. A party cannot claim denial of due process when it was itself less than vigilant of its rights.

On the second issue, the Court rejected the suggestion that an appeal bond is not required in appeals from a denial of a motion to quash a writ of execution. The rules do not limit the bond requirement to certain kinds of rulings; so long as the labor arbiter's decision involves a monetary award, the employer's appeal may be perfected only upon posting of a bond. The purpose of the bond is to ensure that the worker has property to execute upon, preventing empty or inconsequential victories. To construe otherwise would let a party avoid the bond simply by seeking quashal of the writ instead of appealing.

On the third issue, the Court held that the negligence of counsel binds the client. An exception arises only where the lawyer's gross negligence would result in grave injustice depriving the client of due process, and no such deprivation occurred here. Due process is satisfied when parties are given the opportunity to submit position papers, and the employer was given several chances but did not comply. The Court also stressed that its review of a labor case via petition for review is limited to legal errors in the Court of Appeals' decision, examined in the context of whether grave abuse of discretion attended the Commission's ruling, not whether the Commission was correct on the merits.

Doctrine

A labor arbiter's decision that has become final and executory can no longer be reversed or modified, and no appeal may be taken from an order issued in the course of execution. The winning party has a correlative right to enjoy the finality of the resolution of the case.

Under Article 223 of the Labor Code, whenever the labor arbiter's decision involves a monetary award, an employer's appeal may be perfected only upon posting of a bond equivalent to the monetary award, exclusive of damages and attorney's fees. The requirement is not limited to particular kinds of rulings and cannot be circumvented by seeking quashal of the writ of execution.

The reopening of a case is an extraordinary remedy requiring good cause. The negligence and mistakes of counsel bind the client; the exception lies only where the lawyer's gross negligence results in grave injustice depriving the client of due process.

Disposition

The Supreme Court denied with finality the petition for review filed by Toyota Alabang, Incorporated, and ordered that no further pleadings be entertained and that an entry of judgment be issued.

Remember This

Memorize this line: the negligence of counsel binds the client, and a final and executory labor arbiter decision cannot be reopened at will. Examiners use this case to test the appeal bond requirement under Article 223 and the rule against appealing orders issued in the course of execution.