G.R. No. 190876 . June 15, 2016
Yellow Bus Line Employees Union (YBLEU), Petitioner, vs. Yellow Bus Line, Inc. (YBLI), Respondent.

FACTS

Jimmy Gardonia and Francisco Querol, bus drivers for Yellow Bus Line, Inc. (YBL), were dismissed following separate accidents. In October 2002, Gardonia’s bus, while overtaking, collided with a motorcycle, resulting in two fatalities. YBL incurred substantial expenses for hospitalization and a settlement with the heirs. Three months later, Querol, while driving a bus under tow due to a breakdown, drove too fast and rammed into a sugar plantation. After hearings, YBL found both drivers negligent and terminated their employment.
The Yellow Bus Line Employees Union filed an illegal dismissal complaint. During conciliation at the National Conciliation and Mediation Board (NCMB), YBL’s representative, Norlan Yap, allegedly agreed to reinstate the drivers. YBL’s management, however, repudiated this. The dispute was elevated to a Panel of Voluntary Arbitrators, which declared the dismissals illegal, ordered reinstatement with backwages, and ruled that a binding compromise agreement was reached during the initial conference pursuant to Article 227 of the Labor Code. YBL’s petition for certiorari was granted by the Court of Appeals, which reversed the Panel’s decision.

ISSUE

The primary issue is whether the Court of Appeals erred in reversing the Panel of Voluntary Arbitrators’ finding of illegal dismissal and in ruling that no valid compromise agreement was reached.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. On the procedural issue, the Court held that while YBL erroneously filed a petition for certiorari under Rule 65 instead of a petition for review under Rule 43, the appellate court correctly relaxed procedural rules to address the substantive merits, as the case involved the interpretation of labor laws affecting public interest.
On the substantive merits, the Court upheld the legality of the dismissals. It found that both drivers were grossly negligent, constituting willful breach of trust and just cause for termination under Article 282 of the Labor Code. Gardonia violated traffic rules by overtaking at a dangerous point, directly causing fatal accidents. Querol exhibited reckless disregard by driving at an excessive speed while his vehicle was under tow, leading to another accident. Their actions were not mere accidents but the direct result of their negligence, causing substantial financial loss to the company. The Court also ruled that no valid compromise agreement was finalized. Article 227 of the Labor Code applies to settlements assisted by the DOLE Regional Office or Bureau, not to the NCMB conciliation in this case, which falls under the grievance machinery and voluntary arbitration procedures. Furthermore, Norlan Yap lacked apparent authority to bind YBL to a settlement, and the need for a second conference confirmed the absence of a final agreement. However, due to YBL’s failure to comply with the twin-notice requirement, the Court affirmed the award of ₱30,000.00 nominal damages to each driver for procedural due process violation.