G.R. No. 120691 August 21, 1997
BIONIC HEAVY EQUIPMENTS, INC., and/or MR. SPENCER FORKNER, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Fourth Division, Cebu City) and NAFLU/AMIE TOMENTOS, et al., respondents.

FACTS

This case stems from a labor dispute where the Labor Arbiter, on December 1, 1989, decided in favor of the employee-complainants, ordering Bionic Heavy Equipments, Inc. to pay various monetary awards. The decision required a Corporate Auditing Examiner to compute the exact award. Bionic received the decision on January 23, 1990, and filed an appeal memorandum on February 2, 1990, within the reglementary period. However, it did not post an appeal bond, arguing the bond amount could not be determined absent the official computation. The computation was later approved by the Labor Arbiter on June 30, 1990, totaling over P21 million.
Subsequently, the Labor Arbiter granted the employees’ motion for immediate execution pending appeal, issuing a writ of execution on July 5, 1990, citing Bionic’s failure to perfect its appeal by posting a bond and alleging the company was disposing of assets. A sheriff’s sale of Bionic’s properties was conducted on July 19, 1990. Bionic had earlier filed a petition with the NLRC to quash the writ. The NLRC initially issued a restraining order, but the sheriff claimed to have received it after the auction. The NLRC later quashed the writ and annulled the levy and sale in an Order dated August 10, 1990, which was affirmed by the Supreme Court in a related case ( G.R. No. 94540 -41). The core case was then remanded to the Labor Arbiter for reception of evidence.

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in issuing resolutions that effectively pre-judged the case and interfered with the Labor Arbiter’s mandated proceedings to receive evidence.

RULING

Yes, the Supreme Court found that the NLRC committed grave abuse of discretion. The legal logic centers on the proper procedural stages and the premature assumptions made by the NLRC. After the Supreme Court affirmed the annulment of the execution and sale in the prior NAFLU case, the matter was correctly remanded to the Labor Arbiter for a full hearing on the merits to determine the actual monetary liabilities, if any. However, in its subsequent resolutions, the NLRC directed the Labor Arbiter to immediately terminate the hearing so that an appeal bond amount could be fixed. This directive was fundamentally flawed.
The NLRC’s order presupposed that a final monetary award would be rendered against Bionic, for which an appeal bond would later be required. This presumption was baseless and premature, as no such final award could exist without first completing the reception of evidence ordered by the Court. The Labor Arbiter needed that evidence to resolve the case substantively. By ordering the termination of the hearing, the NLRC effectively pre-judged the outcome and denied the parties their right to due process—the very opportunity to present their evidence before a decision on the merits. This constituted a capricious and whimsical exercise of power, amounting to grave abuse of discretion. Consequently, the Supreme Court set aside the NLRC resolutions and reinstated the Labor Arbiter’s order to proceed with the case.