G.R. No. L-81771. December 29, 1988.
MAGNA RUBBER MANUFACTURING CORPORATION, petitioner, vs. FRANKLIN M. DRILON, in his capacity as Secretary of the Department of Labor and Employment, DIONISIO C. DE LA SERNA, in his capacity as Undersecretary of the Department of Labor and Employment, FRANCISCO L. ESTRELLA, in his capacity as Regional Director of the Department of Labor and Employment, National Capital Region, ADELAIDA HERNANDEZ, and FELIZARDO SALVADOR, respondents.

FACTS

Petitioner Magna Rubber Manufacturing Corporation filed an application for clearance to temporarily lay off employees, including private respondents Adelaida Hernandez and Felizardo Salvador, on the ground of business losses due to an oil crisis. The employees filed a complaint for illegal dismissal. The Regional Director denied the clearance application, ruling that petitioner failed to present proof of financial difficulties. Petitioner moved for reconsideration, attaching its financial statement showing a net loss for 1980, and argued this evidence had been previously submitted. The entire record was elevated to the Secretary of Labor.
The Secretary of Labor affirmed the Regional Director’s order, stating that a careful examination of the record showed the financial statement was not attached, concluding no evidence of financial reverses was presented. The Secretary refused to admit the financial statement submitted with the motion for reconsideration, deeming it newly submitted on appeal. Petitioner’s motion for reconsideration was denied, prompting this petition for certiorari alleging grave abuse of discretion and denial of due process.

ISSUE

Whether public respondents committed grave abuse of discretion in refusing to admit and consider the petitioner’s financial statement as evidence of business losses justifying the layoff.

RULING

Yes, public respondents committed grave abuse of discretion. The Supreme Court granted the petition, set aside the assailed orders, and remanded the case to the Department of Labor and Employment.
The legal logic centers on the fundamental principles of due process and the non-applicability of technical rules in labor proceedings. The Court found the respondent Secretary’s conclusion—that no financial statement was presented—to be a hasty and sweeping dismissal of the petitioner’s evidence. The record’s incompleteness, wherein the financial statement was allegedly missing, did not justify the outright refusal to consider the document. The Secretary, exercising quasi-judicial functions, had the authority and duty to adopt reasonable means to ascertain the facts. This could have included requiring the reconstitution of the record or remanding the case to the Regional Director for clarification, rather than relying on a procedural technicality.
Critically, the Court emphasized that under Article 221 of the Labor Code, technical rules of evidence are not binding. Labor officials must utilize all reasonable means to resolve cases speedily and objectively. The submission of the financial statement on appeal, even assuming it was not in the original record, constituted a cogent basis for the Secretary to admit and evaluate it. The Court cited precedent (Columbia Development Corporation vs. Minister of Labor) holding that evidence submitted on appeal should be admitted in line with the Labor Code’s directive for liberal application of rules. The refusal to do so constituted a denial of due process and a grave abuse of discretion warranting judicial correction. The case was remanded for proper consideration of the financial statement.