G.R. No. 1&$$&5 S=t* 18, 199%
ANLAON CONSTRUCTION ENTERPRISES CO., INC., petitioner, vs.
NATIONAL LABOR RELATIONS COMMISSION, 5TH -I/ISION, !" BEN4AMIN RELU#A, 4R., E-GAR-O GENA#AS, ERNESTO CANETE, PROTACIO ROSALES, NESTOR BENO#A, RO-OLO GONGOB, -ARIO BINO#A, BEN4AMIN BASMA#OR, ABELAR-O SACURA, LORENCIO SACURA, ISABELO MIRA, NEMESIO LACAR, 4OSEPH CABIGIS, RO-RIGO CILLON, /IRGILIO UION, GUARINO E/ANGELISTA, ALE4AN-RO GATA, BENE-ICTO CALAGO, NILO GATA, -IONISIO
PERMACIO, 4UANITO SALU-, A-OR RIMPO, ELIPE ORAE, 4ULIETO TE4A-A, TEOTIMO LACIO, ONORE UION, RU-# AL/ARE, CRESENCIO LORES, ALRE-O PERMACIO, CRESENCIO AL/IAR, HERNANI SURILLA, -IOS-A-O SOLON, CENON ALBURO, ACARIAS ORTI, EUSEBIO BUSTILLO, GREGORIO BAGO, 4ERR# /ARGAS, E-UAR-O BUENO, PASCUAL HU-A#A, ROGELIO NIETES, !" RE#NAL-O NIETES, respondents.
PUNO, J.:
In this petition for certiorari, petitioner anlaon Construction nterprises Co., Inc. see2s to annul the decision of respondent ational %abor /elations Commission, Gifth Division and remand the cases to the
#rbitration =ranch for a retrial on the merits.
"etitioner is a domestic corporation engaged in the construction business nationwide with principal o<ce at o. 11 La2an @t., %a ?ista @ubdivision, NueBon City. In 1!!, petitioner was contracted by the ational
@teel Corporation to construct residential houses for its plant employees in @teeltown, @ta. lena, Iligan City. "rivate respondents were hired by petitioner as laborers in the pro)ect and wor2ed under the supervision of ngineers "aulino stacio and Mario Dulatre. In 1!, the pro)ect neared its completion and petitioner started terminating the services of private respondents and its other employees.
In 1+, private respondents -led separate complaints against petitioner before @ub0/egional #rbitration
=ranch PII, Iligan City. umbering forty0one $71& in all, they claimed that petitioner paid them wages below the minimum and sought payment of their salary di>erentials and thirteenth0month pay. ngineers stacio and Dulatre were named co0respondents.
@ome of the cases were assigned to %abor #rbiter 8uardson #. @iao while the others were assigned to
%abor #rbiter icodemus 8. "alangan. @ummonses and notices of preliminary conference were issued and served on the two engineers and petitioner through ngineer stacio. (he preliminary conferences before the labor arbiters were attended by ngineers stacio and Dulatre and private respondents. #t the conference of Kune 11, 1+ before #rbiter @iao, ngineer stacio admitted petitioner6s liability to private respondents and agreed to pay their wage di>erentials and thirteenth0month pay on Kune 1, 1+. #s a result of this agreement, ngineer stacio allegedly waived petitioner6s right to -le its position paper. 1 "rivate respondents declared that they, too, were dispensing with their position papers and were adopting their complaints as their position paper. &
On Kune 1, 1+, ngineer stacio appeared but re;uested for another wee2 to settle the claims. %abor
#rbiter @iao denied this re;uest. On Kune *1, 1+, #rbiter @iao issued an order granting the complaint and directing petitioner to pay private respondents6 claims. #rbiter @iao held3
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Considering the length of time that has elapsed since these cases were -led, and what the complainants might thin2 as to how this branch operates andor conducts its proceedings as they are now restless, this #rbiter has no other alternative or recourse but to order the respondent to pay the claims of the complainants, sub)ect of course to the computation of the Giscal Eaminer II of this =ranch pursuant to the oral manifestation of respondent. (he @upreme Court ruled3 4Contracts though orally made are binding on the parties.4 $%ao @o2 v. @abaysabay, 19! @C/# 197&.
@imilarly, this =ranch would present in passing that 4a court cannot decide a case without facts either admitted or agreed upon by the parties or proved by evidence.4 $Lu Chin "iao v. %im (uaco, 99 "hil. *: =enedicto v. Lulo, *' "hil. 1'+&
F/GO/, premises considered, the respondent is hereby ordered to pay the individual claims of the above0named complainants representing their wage di>erentials within ten $1+& days from receipt of this order.
(he Giscal Eaminer II of this =ranch is li2ewise hereby ordered to compute the individual claims of the herein complainants.
@O O/D/D. 3
On Kune *, 1+, #rbiter "alangan issued a similar order, thus3
Fhen the above0entitled cases were called for hearing on Kune 1, 1+ at 1+3++ a.m. respondent thru their representative manifested that they were willing to pay the claims of the complainants and promised to pay the same on Kune *!, 1+ at 1+39+ a.m.
owever, when these cases were called purposely to materialiBe the promise of the respondent, the latter failed to appear without any valid reason.
Considering therefore that the respondent has already admitted the claims of the complainants, we believe that the issues raised herein have become moot and academic.
F/GO/ premises considered, the above0entitled cases are hereby ordered Closed and (erminated, however, the respondent is hereby ordered to pay the complainants their di>erential pay and 19th0month pay within a period of ten $1+& days from receipt hereof based on the employment record on -le with the respondent.
@O O/D/D.
"etitioner appealed to respondent ational %abor /elations Commission. It alleged that it was denied due process and that ngineers stacio and Dulatre had no authority to represent and bind petitioner.
"etitioner6s appeal was -led by one #tty. #rthur #bundiente.
In a decision dated #pril *, 1*, respondent Commission a<rmed the orders of the #rbiters.
"etitioner interposed this petition alleging that the decision of respondent Commission was rendered without )urisdiction and in grave abuse of discretion. "etitioner claims that3
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#. "etitioner was deprived of the constitutional right to due process of law when it was ad)udged by the %/C liable without trial on the merits and without its 2nowledge:
=. (he %/C erroneously, patently and unreasonably interpreted the principle that the %/C and its #rbitration =ranch are not strictly bound by the rules of evidence:
C. (here is no legal nor actual basis in the %/C6s ruling that petitioner is already in estoppel to disclaim the authority of its alleged representatives.
D. (he %/C committed manifest error in relying merely on private, respondents6 unsubstantiated complaints to hold petitioner liable for damages. 5
In brief, petitioner alleges that the decisions of the labor arbiters and respondent Commission are void for the following reasons3 $1& there was no valid service of summons: $*& ngineers stacio and Dulatre and
#tty. #bundiente had no authority to appear and represent petitioner at the hearings before the arbiters and on appeal to respondent Commission: $9& the decisions of the arbiters and respondent Commission are based on unsubstantiated and self0serving evidence and were rendered in violation of petitioner6s right to due process.
@ervice of summons in cases -led before the labor arbiters is governed by @ections 7 and 5 of /ule I? of the ew /ules of "rocedure of the %/C. (hey provide3
@ec. 7. Service of Notices and Resolutions. A $a& otices or summons and copies of orders, resolutions or decisions shall be served on the parties to the case personally by the baili> or duly authoriBed public o<cer within three $9& days from receipt thereof or by registered mail: "rovided that where a party is represented by counsel or authoriBed representative, service shall be made on such counsel or authoriBed representative: provided further that in cases of decision and -nal awards, copies thereof shall be served on both the parties and their counsel: provided -nally, that in case where the parties are so numerous, service shall be made on counsel and upon such number of complainants as may be practicable, which shall be considered substantial compliance with #rticle **7 $a& of the %abor Code, as amended.
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@ec. 5. Proof and co!pleteness of service . A (he return is pri!a facie proof of the facts indicated therein.Service ,y re"istered !ail is co!plete upon receipt ,y the addressee or his a"ent . . . .
nder the %/C /ules of "rocedure, summons on the respondent shall be served personally or by registered mail on the party himself. If the party is represented by counsel or any other authoriBed representative or agent, summons shall be served on such person.
It has been established that petitioner is a private domestic corporation with principal address in NueBon City. (he complaints against petitioner were -led in Iligan City and summonses therefor served on ngineer
stacio in Iligan City. (he ;uestion now is whether ngineer stacio was an agent and authoriBed representative of petitioner.
(o determine the scope or meaning of the term 4authoriBed representative4 or 4agent4 of parties on whom summons may be served, the provisions of the /evised /ules of Court may be resorted to. $
nder the /evised /ules of Court, % service upon a private domestic corporation or partnership must be made upon its o<cers, such as the president, manager, secretary, cashier, agent, or any of its directors.
(hese persons are deemed so integrated with the corporation that they 2now their responsibilities and immediately discern what to do with any legal papers served on them. 8
In the case at bar, ngineer stacio, assisted by ngineer Dulatre, managed and supervised the construction pro)ect. 9 #ccording to the @olicitor 8eneral and private respondents, ngineer stacio attended to the pro)ect in Iligan City and supervised the wor2 of the employees thereat. #s manager, he had su<cient responsibility and discretion to realiBe the importance of the legal papers served on him and to relay the same to the president or other responsible o<cer of petitioner. @ummons for petitioner was therefore validly served on him.
ngineer stacio6s appearance before the labor arbiters and his promise to settle the claims of private respondents is another matter.
(he general rule is that only lawyers are allowed to appear before the labor arbiter and respondent Commission in cases before them. (he %abor Code and the ew /ules of "rocedure of the %/C, nonetheless, lists three $9& eEceptions to the rule, viz 3
@ec. '. Appearances. A . . . .
# non0lawyer may appear before the Commission or any %abor #rbiter only if3
$a& he represents himself as party to the case:
$b& he represents the organiBation or its members, provided that he shall be made to present written proof that he is properly authoriBed: or
$c& he is a duly0accredited member of any legal aid o<ce duly recogniBed by the Department of Kustice or the Integrated =ar of the "hilippines in cases referred thereto by the latter. . . . 1+
# non0lawyer may appear before the labor arbiters and the %/C only if3 $a& he represents himself as a party to the case: $b& he represents an organiBation or its members, with written authoriBation from them3 or $c& he is a duly0accredited member of any legal aid o<ce duly recogniBed by the Department of Kustice or the Integrated =ar of the "hilippines in cases referred to by the latter. 11
ngineers stacio and Dulatre were not lawyers. either were they duly0accredited members of a legal aid o<ce. (heir appearance before the labor arbiters in their capacity as parties to the cases was authoriBed under the -rst eEception to the rule. owever, their appearance on behalf of petitioner re;uired written proof of authoriBation. It was incumbent upon the arbiters to ascertain this authority especially since both engineers were named co0respondents in the cases before the arbiters. #bsent this authority, whatever statements and declarations ngineer stacio made before the arbiters could not bind petitioner.
(he appearance of #tty. #rthur #bundiente in the cases appealed to respondent Commission did not cure
ngineer stacio6s representation. #tty. #bundiente, in the -rst place, had no authority to appear before the respondent Commission. (he appellants6 brief he -led was veri-ed by him, not by petitioner. 1& Moreover, respondent Commission did not delve into the merits of #tty. #bundiente6s appeal and determine whether ngineer stacio was duly authoriBed to ma2e such promise. It dismissed the appeal on the ground that notices were served on petitioner and that the latter was estopped from denying its promise to pay.
evertheless, even assuming that ngineer stacio and #tty. #bundiente were authoriBed to appear as representatives of petitioner, they could bind the latter only in procedural matters before the arbiters and respondent Commission. "etitioner6s liability arose from ngineer stacio6s alleged promise to pay. # promise to pay amounts to an o>er to compromise and re;uires a special power of attorney or the eEpress consent of petitioner. (he authority to compromise cannot be lightly presumed and should be duly established by evidence.13 (his is eEplicit from @ection of /ule III of the %/C /ules of "rocedure, viz 3
@ec. . Authority to ,ind party . A #ttorneys and other representatives of parties shall have authority to bind their clients in all matters of procedure: but they cannot, without a special power of attorney or eEpress consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client6s claim.
(he promise to pay allegedly made by ngineer stacio was made at the preliminary conference and constituted an o>er to settle the case amicably. (he promise to pay could not be presumed to be a single unilateral act, contrary to the claim of the @olicitor 8eneral. 1# defendant6s promise to pay and settle the
plainti>6s claims ordinarily re;uires a reciprocal obligation from the plainti> to withdraw the complaint and discharge the defendant from liability. 15 In e>ect, the o>er to pay was an o>er to compromise the cases.
In civil cases, an o>er to compromise is not an admission of any liability, and is not admissible in evidence against the o>eror. 1$ If this rule were otherwise, no attempt to settle litigation could safely be made. 1% @ettlement of disputes by way of compromise is an accepted and desirable practice in courts of law and administrative tribunals. 18 In fact, the %abor Code mandates the labor arbiter to eEert all e>orts to enable the parties to arrive at an amicable settlement of the dispute within his )urisdiction on or before the -rst hearing. 19
Clearly, respondent Commission gravely abused its discretion in a<rming the decisions of the labor arbiters which were not only based on unauthoriBed representations, but were also made in violation of petitioner6s right to due process.
@ection 9 of /ule ? of the %/C /ules of "rocedure provides3
@ec. 9. Su,!ission of Position Papers;Me!orandu!. A @hould the parties fail to agree upon an amicable settlement, in whole or in part, during the conferences, the %abor #rbiter shall issue an order stating therein the matters ta2en up and agreed upon during the conferences and directing the parties to simultaneously -le their respective veri-ed position papers
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#fter petitioner6s alleged representative failed to pay the wor2ers6 claims as promised, %abor #rbiters @iao and "alangan did not order the parties to -le their respective position papers. (he arbiters forthwith rendered a decision on the merits without at least re;uiring private respondents to substantiate their complaints. (he parties may have earlier waived their right to -le position papers but petitioner6s waiver was made by ngineer stacio on the premise that petitioner shall have paid and settled the claims of private respondents at the scheduled conference. @ince petitioner reneged on its 4promise,4 there was a failure to settle the case amicably. (his should have prompted the arbiters to order the parties to -le their position papers.
#rticle **1 of the %abor Code mandates that in cases before labor arbiters and respondent Commission, they 4shall use every and all reasonable means to ascertain the facts in each case speedily and ob)ectively and without regard to technicalities of law or procedure, all in the interest of due process.4 (he rule that respondent Commission and the %abor #rbiters are not bound by technical rules of evidence and procedure should not be interpreted so as to dispense with the fundamental and essential right of due process. &+ #nd this right is satis-ed, at the very least, 6when the parties are given the opportunity to submit position papers. &1%abor #rbiters @iao and "alangan erred in dispensing with this re;uirement.
Indeed, the labor arbiters and the %/C must not, at the eEpense of due process, be the -rst to arbitrarily disregard speci-c provisions of the /ules which are precisely intended to assist the parties in obtaining the )ust, eEpeditious and ineEpensive settlement of labor disputes. &&
I ?IF F/OG, the petition for certiorari is granted. (he decision of the ational %abor /elations Commission, Gifth Division, is annulled and set aside and the case is remanded to the /egional #rbitration
=ranch, Iligan City for further proceedings.