G.R. No. 126773 . April 14, 1999.
RUBBERWORLD (PHILS.), INC., or JULIE YAP ONG, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, ET AL., respondents.

FACTS

Petitioner Rubberworld (Phils.), Inc., a domestic corporation, filed a petition for suspension of payments with the Securities and Exchange Commission (SEC) on November 24, 1994. On December 28, 1994, the SEC issued an order creating a management committee and, pursuant to Presidential Decree No. 902-A, directed the suspension of all actions for claims against the corporation pending before any court, tribunal, or body. Subsequently, from April to July 1995, private respondents, claiming to be employees of Rubberworld, filed various complaints for illegal dismissal, unfair labor practice, and monetary claims before the labor arbiter.
Petitioner moved to suspend the labor proceedings based on the SEC order. The labor arbiter denied the motion, ruling that the SEC injunction applied only to the enforcement of established rights and not to the determination of claims. The National Labor Relations Commission (NLRC) affirmed this denial. Petitioner thus filed this certiorari petition, arguing that the NLRC acted with grave abuse of discretion in refusing to suspend the proceedings.

ISSUE

Whether the NLRC committed grave abuse of discretion in affirming the labor arbiter’s denial of the motion to suspend proceedings, despite the SEC order mandating suspension of all claims against a corporation under a management committee pursuant to P.D. 902-A.

RULING

Yes. The Supreme Court granted the petition. The legal logic is anchored on the clear mandate of Section 6(c) of P.D. 902-A, which states that upon the appointment of a management committee or rehabilitation receiver, all actions for claims against the corporation pending before any court, tribunal, or body shall be suspended. This suspension is designed to provide a breathing space for the management committee to rehabilitate the business without the distraction of litigations that could dissipate its assets.
The Court emphasized that the term “claims” in the law encompasses all types of actions, whether for money or otherwise, and includes labor cases for monetary benefits. The suspension applies regardless of whether the claims have been established or are still being ascertained. The labor tribunals’ refusal to suspend proceedings constituted a disregard of the SEC’s lawful order and the statutory framework for corporate rehabilitation. The Court clarified that the preference granted to workers under Article 110 of the Labor Code applies in bankruptcy or liquidation proceedings, not during the suspension of payments and rehabilitation stage under P.D. 902-A. Therefore, the NLRC’s affirmation of the labor arbiter’s order was a grave abuse of discretion for being contrary to law. The proceedings before the labor arbiter were ordered suspended.