NATHANIEL OLACAO, ALBERTO AGUILON, AMADO AGUILON, LIBERATO AGUILON, VENANCIO AGUILON, CENON AGUILON, CESAR ALCANTARA, FRANCISCO ALERIA, FRUCTUOUSO ALERIA, PEDRO ALERIA, IGNACIO …

Alleging grave abuse of discretion, amounting to lack of
jurisdiction, petitioners numbering 170 in all, assail the Decision of the
National Labor Relations Commission (NLRC) in NLRC Case No. 402-LR-XI-81 (LRD
Case No. STF-314-78) entitled “Nathaniel Olacao,
et als., vs. Eastcoast
Development Enterprises, et al.,” promulgated on 18 September 1987,
setting aside the Decision of Labor Arbiter Jose O. Libron
awarding separation pay to petitioners, and sustaining, instead, private
respondents’ appeal on the ground of res judicata or bar by prior judgment (Annex
“A”, Petition).

The following background facts, arranged chronologically, will
put the controversy in proper perspective:

1. Petitioners were the former workers of private respondent Eastcoast Development Enterprises, then
a single proprietorship, owned, operated and managed by respondents Spouses Constancio and Leodegaria Maglana, Antonio Florendo and
Miriam Maglana Santamaria
(“Eastcoast,” for brevity).  It operated a logging concession at Kinablangan, Baganga, Davao Oriental (p. 233, Rollo).

a) On 28 November 1977,
petitioners filed with the then Ministry of Labor, Region XI, a complaint for non-payment
of wages and emergency living allowance (LRD Case No. ROXI-MC-857-77)
entitled “Olacao and 189 others vs. Eastcoast Development Enterprises, Inc.” The Complaint
was later certified to the Labor Arbitration Branch of the NLRC and docketed as
NLRC Case No. 897-MC-XI-78 (hereinafter, the “Unpaid Wages Case”).

b) In December, 1977, “Eastcoast”
decided to totally and permanently close its business.  Thus, on 5 December 1977, Antonio Florendo, the Executive Vice-president and General Manager,
filed an application with the Regional Director of the then Ministry of Labor
to formally close its business on account of business reverses (Annex
“C-2,” Petition, p. 167, Rollo).  This application was favorably acted upon on 15 December 1977 by the Regional
Director of the Ministry of Labor, Regional Office No. XI, Davao City,
on condition that “Eastcoast” should pay
all unpaid wages and separation pay of all its employees (Annex
“C-3,” ibid. p. 168, Rollo).

c) On 5 January 1978
the owners of “Eastcoast” sold all their
shareholdings to private respondent, George Q. Choy, and the company was
thereafter known as Eastcoast Development Enterprises,
Inc.  (“Eastcoast, Inc.,” for short).

d) On 21 January 1978,
“Eastcoast Inc.,” under a new management,
paid its 381 employees including petitioners herein, all their unpaid wages,
living allowances, overtime pay and all other benefits due them and termination pay, computed up to 30 November 1977.  Upon receiving said payments, petitioners
signed sworn individual documents entitled “Receipt and Release” whereby they:

“absolutely and forever release and discharge the Eastcoast
Development Enterprises, its successors and assigns, of any and all claims and
liabilities whatsoever insofar as my past salaries/wages, termination pay, overtime pay and other privileges accorded
me by law and/or any other claims are concerned” (Annex “C-4”,
Petition, p. 169, Rollo).

e) On 30 May 1980,
Labor Arbiter Porfirio T. Reyes dismissed the
“Unpaid Wages Case” (NLRC Case No. 897-MC-XI-78) for lack of merit
and for being moot and academic in view of the “Receipt and Release”
documents executed by the complainant-workers.

f)  On 30 September 1982, the appeal interposed by
petitioners to the NLRC was dismissed by its First Division, stating in part:

“After a careful review of the entire record, we find no
justification for disturbing the Labor Arbiter’s findings and conclusions.  In our own view, the payment of the amounts
stated in the deeds above referred to has rendered to (sic) this case academic because the receipt by the
complainants of the said amounts is an established fact and there is no showing
that their execution of the said documents was tainted by anything that
vitiates free consent.  Indeed, it is
difficult to believe that more than 300 people could at the same time be forced
to execute the same against their will.” (p. 2, Decision, p. 240, Rollo)

2. In the meantime, on 27
November 1978, petitioners filed another Complaint against “Eastcoast,” Inc. this time for Illegal Dismissal
(LRD Case No. STF-314-78) with the Regional Office No.
XI, Davao City, of the
then Ministry of Labor.  They
prayed for “reinstatement x x x with full backwages
from the date of the illegal dismissal.” The Complaint was later on
certified to the Arbitration Branch and docketed as NLRC Case No. 402-LR-XI-81 (the “Illegal Dismissal”
Case).

a) In its Answer (Annex “C”, Petition), “Eastcoast, Inc.,” denied that it had dismissed
petitioners illegally inasmuch as the total closure of its establishment was
with prior clearance of the Regional Director of Labor, Region XI, Davao City, and that pursuant to the latter’s Order of 15
December 1977, its employees including complainants, were fully compensated
“all unpaid wages earned and separation pay equivalent to 15 days for
every year of service.” As proof thereof, attached to
the Answer was the “Receipt and Release” sworn to by petitioner
Nathaniel Olacao (Annex “C-4”).

b) On 21 April 1980
“Eastcoast, Inc.” filed a Manifestation in
the “Illegal Dismissal Case” to the effect that the “Unpaid
Wages Case” was still pending, and that “Eastcoast
Development Enterprises” and Eastcoast
Development Enterprises, Inc., are two different
entities (p. 3, Manifestation, p. 196 Rollo).

c) At that point in time, it appears that the “Unpaid Wages
Case” was still on appeal with the NLRC.

d) On 30 July 1981,
petitioners filed an Amended Complaint in the “Illegal Dismissal
Case,” impleading as additional respondents
spouses Constancio and Leodegaria
Maglana, Antonio Florendo,
Miriam Maglana Santamaria, Maglana and Sons Management Corporation, Eastcoast Development Enterprises, Inc., and George Q. Choy
(Annex “L”, p. 203, Rollo).  The Amended Complaint alleged that the impleaded respondents connived with one another in entering
into a fictitious contract of transferring the ownership of “Eastcoast” to George Q. Choy to effect the illegal
dismissal of petitioners.  Thus, all of
them should be considered jointly and severally liable for the acts complained
of.

e) The newly impleaded private
respondents all denied liability.  In its
own Answer, filed on 19 August 1981,
“Eastcoast, Inc.” denied any connivance
with them in the dismissal of complainants (Annex “O”, p. 215, Rollo).

f) In the interim, the timber license of Eastcoast,
Inc., was cancelled and since then up to the present
it has completely ceased operations (Memorandum for Private Respondent, pp. 4 and 8).

g) On 20 May 1986,
the NLRC Regional Arbitration Branch, Branch XI, through Labor Arbiter Jose Q. Libron, rendered a Decision in the “Illegal Dismissal
Case,” dismissing the charge of illegal dismissal for lack of merit and
awarding separation pay.  Thus:

“CONFORMABLY WITH THE FOREGOING, judgment is hereby rendered:

“(1) Dismissing the charge of illegal dismissal for lack of merit,
thus denying the prayer for reinstatement and backwages;

“(2) Ordering respondents Eastcoast
Development Enterprises, spouses Constancio Maglana and Leodegaria Maglana, Antonio Florendo, Miriam Maglana Santamaria, Maglana and Sons
Management Corporation, Eastcoast Development
Enterprises, Inc., and George Q. Choy to pay jointly and severally the 170
complainants their separation pay equivalent to one month pay per year
of service.

“SO ORDERED.” (Annex
“Q”, pp. 228-229, Rollo) (Underscoring
ours)

h) On 2 July 1986,
private respondent received copy of Labor Arbiter Libron’s
Decision.

i) 
On 14 July 1986, private respondents filed their Notice of Appeal and
Appeal Memorandum in the “Illegal Dismissal Case” attaching thereto,
admittedly for the first time:  (1) Labor
Arbiter Reyes’ Decision in the “Unpaid Wages Case” (LRD Case No.
MC-857-77), dated 30 May 1980,
dismissing the case because payments of wages had already been made; and (2)
the NLRC Decision on appeal (NLRC Case No. 897-MC-XI-78), promulgated on 30 September 1982, affirming Labor
Arbiter Reyes’ Decision.

i) On 18 September 1987, respondent NLRC reversed Labor Arbiter Libron’s Decision in the “Illegal Dismissal
Case,” with the following findings:

“x x x that sometime in
November 1977, the present complainants filed a money claim against respondents
before the Labor Arbitration Branch of Regional Office No. XI,
Davao City, which was docketed as NLRC
Case No. 897-MC-XI-78 (LRD Case No. MC-857-77); that one of the issues involved
in said case was whether the documents signed by complainants and denominated
as ‘Receipts and Release’ were legally valid and binding; that the said
documents show that herein complainants received the specified amounts from
respondents representing full and final payment of their salaries, wages,
allowances, overtime pay and other compensation legally due them; together with
termination pay and they
forever release and discharge the respondents, its successors and assigns of
any claims and liabilities whatsoever; that on May 30, 1980, the Labor Arbiter
rendered a decision dismissing the case for lack of merit and being moot and
academic; x x
x that complainants in the above-entitled case appealed the said decision of the Labor Arbiter to
the National Labor Relations Commission which affirmed the decision of the
Labor Arbiter.  x x x.

“Ordinarily, this Commission (NLRC) does not consider evidence
and other pertinent documents not submitted during the proceedings before the
Arbitration level and submitted for the first time on appeal.

“However, we are constrained to consider the evidence, ANNEXES
‘A’ and ‘B’ of the appeal which are the decision of the Labor Arbiter dated May 30, 1980 and the decision of the First
Division of this Commission promulgated on September 30, 1982 affirming the
appealed decision of the Arbiter below.

“It appears from the aforesaid decision of Labor Arbiter Porfirio Reyes dated May 30, 1980 which was affirmed by the
First Division of the Commission that complainants in the case at bar were
already paid their several money claims including termination pay.

“We find therefore that this issue of termination pay in the
case under consideration was already resolved and passed upon in the said
Decisions.  This is a clear case of ‘res judicata‘ or barred (sic) by
prior judgment.” (Annex “A”), Petition, pp. 151-152, Rollo)
(Emphasis supplied).

j) Petitioners’ Motion for Reconsideration having been denied,
they availed of the present Petition for Certiorari, filed on 23 January 1988.

On 23 January 1989,
we resolved to give due course and required the submittal of memoranda, the
last of which was filed on 5 June 1989.

The pivotal issue for resolution is whether or not the NLRC
gravely abused its discretion amounting to lack of jurisdiction in reversing
Labor Arbiter Libron’s Decision on the principal
ground of res judicata.

Petitioners, joined by the Solicitor General, fault the NLRC with
grave abuse of discretion.  The NLRC and
private respondents, on the other hand, negate the charge.

We uphold the NLRC.

In actual fact, the pendency of the
“Unpaid Wages Case” (NLRC Case No. 897-MC-XI-78) was not raised for
the first time when the “Illegal Dismissal Case” was appealed to the
NLRC.  For, on 21 April 1980, before the
Decision was rendered in the “Unpaid Wages Case,” “Eastcoast” had filed a Manifestation in the
“Illegal Dismissal Case,” calling attention to the pendency of the “Unpaid Wages Case” “filed
sometime in the last quarter of 1977” and verified by one of the
petitioners herein Nathaniel Olacao (Annex
“J”, Petition).  Counsel for
the complainants therein was the same counsel in the present case (ibid.).  Too, in “Eastcoast’s”
Answer (Annex “D”, ibid.) in the “Illegal Dismissal Case,”
it made specific reference to the “Receipt and Release” individually
executed by petitioners.  It should have
been no surprise to complainants, therefore, when that matter was invoked on
appeal before the NLRC.  Besides, the
NLRC is empowered to take judicial notice of its own pronouncements.

Moreover, at the time said
Manifestation was made on 21
April 1980, the
Decision in the “Unpaid Wages Case” had not yet been rendered, having
been promulgated only on 30 May 1980,
which Decision was affirmed by the NLRC, First Division, only on 30 September 1982.  When
“Eastcoast, Inc.” appealed the
“Illegal Dismissal Case” on 14 July 1986 therefore, it was only then that it could
rightfully invoke the Decision in the “Unpaid Wages Case” and the affirmance thereof by the First Division of the NLRC in
1982.  It was in no position to raise the
same in its Answer, which it filed only on 19
December 1978 nor in
its Answer, dated 19 August
1981, to the Amended Complaint. 
But even then, it had alleged in its original Answer that “in
January 1977, the complainants were fully paid of their salaries/wages, living
allowances and other benefits granted by the New Labor Code of the Philippines and other applicable Presidential
Decrees.”

Thus, no grave abuse of discretion can be attributed to the NLRC
for concluding that from the said Decisions, the issue of termination pay had
already been passed upon and resolved; in other words, a clear case of ‘res judicata‘ or bar by former
judgment.  The NLRC found that
complainants had already been paid their several money claims including their
termination pay (p. 4, NLRC Resolution, September 19, 1987).  Parties ought not to be permitted to litigate
an issue more than once (Eternal Gardens Memorial Parks Corp. vs. Court of
Appeals, G.R. No. 73794, 19 September 1988). 
The Decisions in the “Unpaid Wages Case” legally and finally settled the question of separation
pay of petitioners.

But petitioners claim
that the causes of action in the two cases were different – in the “Unpaid
Wages Case”, money claims were involved; in the “Illegal
Dismissal Case,” petitioners challenged their termination from employment.
 The difference, however, appears only on
the surface.  In essence, because
petitioners claimed that they had been illegally dismissed, they prayed for
“full backwages from the date of illegal
dismissal.” In fact, it was separation pay that was awarded to them in
Labor Arbiter Libron’s Decision in the “Illegal
Dismissal Case,” who found that “complainants’ termination was
effected on a valid ground authorized by law, but considering that termination
and closure was effected without prior clearance x x x complainants should be granted separation pay” (p. 7
Decision).  The charge of illegal
dismissal was dismissed for lack of merit and complainants’ prayer for
reinstatement and backwages was denied (p. 12,
ibid.).

Petitioners further contend that their acceptance of separation
pay does not operate as a waiver of their claims in the “Illegal Dismissal
Case.” Indeed, jurisprudence exists to the effect that a deed of release
or quitclaim cannot bar an employee from demanding benefits to which he is legally
entitled (Fuentes vs. NLRC, G. R. No. 76835, November 24, 1988); that
quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claim arising from the
unfair labor practice of the employer (Garcia vs. NLRC, G.  R. No. 67825, September 4, 1987, 153 SCRA
639); and that employees who received their separation pay are not barred from
contesting the legality of their dismissal and that the acceptance of those
benefits would not amount to estoppel (Mercury Drug
Co., Inc. vs. Court of Industrial Relations, G. R. No. 23357, April 30, 1974,
56 SCRA 694):  De Leon vs. NLRC, G. R.
No. 52056, October 30, 1980, 100 SCRA 691).

A telling difference from the cited cases, however, is the fact
that the issue of the validity of the releases, executed by petitioners under
oath, was squarely raised and resolved in Labor Arbiter Reyes’ Decision in the
“Unpaid Wages Case,” which found categorically that:

“The document relieved absolutely and forever released and
discharged the Eastcoast Development Enterprises,
Inc., its successors and assigns, of any and all claims and liabilities
whatsoever insofar as their past salaries, termination pay, overtime pay
and other privileges accorded them by law.” (Underscoring ours)

That Decision was rendered on 30 May 1980 and was affirmed by the NLRC, First Division,
on 30 September 1982, which
found no justification for disturbing those findings, with this additional
observation:

“More than the above, the record shows that the complainants
received, by virtue of the release documents, amounts which exceeded by leaps
and bounds their original claims for unpaid wages and allowances.”

The aforesaid Decisions in the “Unpaid Wages Case” had
become final and executory.

It may be that private respondents’ appeal was filed on the 12th
day contrary to Article 223 of the Labor Code prescribing ten (10) calendar
days as the reglementary period of appeal.  Private respondents claim that the tenth day
fell on a Saturday when the offices of the NLRC were allegedly closed so that their last day to appeal was
Monday, July 14th.  That is not
correct.  Saturday is still considered a
business day and if the last day to appeal falls on a Saturday, the act is still
due on that day (SM Agri and Gen. Machineries vs. NLRC, et al., G. R. No. 74806, January 9, 1989).

Nonetheless, as the NLRC had
pointed out in its Comment:

“True, the appeal to it was filed on the 12th day but public
respondent wanted to avoid ruling on the same issue of separation pay for that matter
had been judicially settled in the other case. 
It merely exercised its prerogative in relaxing its rule regarding the
ten (10) calendar day period for filing appeals (Sec. 1, Rule VIII of the
Revised Rules of the NLRC) from decisions of its Labor Arbiters, as it had done
so in similar cases x x x ” (p. 6, Comment, p.
333, Rollo)

 Indeed, the perfection of
an appeal within the reglementary period is
considered jurisdictional.  However,
there was legal justification for the NLRC
to have given due course to the appeal, namely,
to obviate a miscarriage of justice.  In
this proceeding, the issue of separation pay had been judicially settled, with
finality, in another case, also by the NLRC.  The NLRC, therefore, had no alternative except to forestall the grant of separation
pay twice.  The principle against unjust
enrichment must be held applicable to labor cases as well.

WHEREFORE, the challenged Decision of the National Labor
Relations Commission in NLRC Case No. 402-LR-XI-81 is hereby AFFIRMED in
toto.

SO ORDERED.

Paras, Padilla, Sarmiento,
and Regalado, JJ., concur.