G.R. No. 118120 ; February 23, 1996
Jaime Salonga, et al., petitioners, vs. National Labor Relations Commission, Newfoundland Paper Products, Inc. (now Luminaire Printing & Publishing Corp.), et al., respondents.

FACTS

Petitioners filed a complaint for illegal dismissal and non-payment of service incentive leave pay. Private respondents moved to dismiss, alleging petitioners had executed quitclaims and received separation pay. Petitioners amended their complaint, asserting they were inveigled into signing the quitclaims after being told the company was closing due to heavy losses, only for it to reopen shortly thereafter with new employees. The labor arbiter treated the motion to dismiss as the respondents’ position paper and decided the case based on the pleadings, finding illegal dismissal.
On appeal, the NLRC reversed and remanded the case for further proceedings, holding the labor arbiter erred in deciding without a full trial. Private respondents supported the remand, contending the company had initially closed but was later revived by new investors. The Solicitor General, however, sided with petitioners, arguing a remand would cause undue delay.

ISSUE

Whether the NLRC committed grave abuse of discretion in remanding the case for trial instead of affirming the labor arbiter’s decision based on the pleadings and position papers.

RULING

The Supreme Court ruled in favor of the petitioners, setting aside the NLRC resolution and reinstating the labor arbiter’s decision. The legal logic is twofold. First, on the substantive issue of dismissal, the burden of proving a valid authorized cause for termination rests solely on the employer under Article 277 of the Labor Code. Private respondents failed to discharge this burden. The alleged business losses were not adequately proven. Furthermore, the executed quitclaims do not bar the claim for illegal dismissal, as the employer also bears the duty to prove these were executed voluntarily. Quitclaims cannot estop employees from pursuing legally entitled benefits.
Second, on the procedural issue, the labor arbiter did not err in deciding the case based on pleadings and position papers without a trial. The holding of a trial is discretionary on the labor arbiter and not a matter of right for the parties. Due process is satisfied when parties are given the opportunity to submit their position papers. The NLRC and labor arbiters are authorized by the Labor Code to decide cases based on such submissions without adhering to technical rules of evidence. The Court found no imprudent exercise of discretion by the labor arbiter warranting interference. Thus, the remand ordered by the NLRC was unnecessary and constituted grave abuse of discretion.