G.R. No. 81815 October 3, 1990
LBC AIRCARGO, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, TRINA APUNGAN, ELSIE JAMILI, JUDITH JOCAME, EMMA SIGLOS and WILFREDO DUMARAN, respondents.

FACTS

On July 15, 1980, Assistant Regional Director Dante Ardivilla approved LBC Aircargo, Inc.’s application to terminate five employees in its Bacolod Branch on the ground of retrenchment to prevent financial losses. The employees moved for reconsideration, contending factual errors and lack of proper hearing. Deputy Minister Vicente Leogardo, Jr., on September 26, 1984, set aside Ardivilla’s order and remanded the case for compulsory arbitration to fully thresh out unresolved factual and legal issues.
The case was assigned to Labor Arbiter Calixto A. Valaquio. Hearings were repeatedly reset, often at the instance of the employees’ counsel. On February 6, 1987, the employees’ counsel moved to submit the case for decision based solely on the pleadings. Arbiter Valaquio rendered a decision on February 27, 1987, noting the employees’ failure to prosecute their case and their clear disinterest in presenting additional evidence. However, the dispositive portion ambiguously ordered the dismissal of “the case.”

ISSUE

Whether the National Labor Relations Commission committed grave abuse of discretion in interpreting Labor Arbiter Valaquio’s decision as a dismissal of LBC’s termination application, thereby ordering the employees’ reinstatement with back wages.

RULING

Yes, the NLRC committed grave abuse of discretion. The Supreme Court nullified the NLRC’s decision. The legal logic is clear: the remand by Deputy Minister Leogardo was specifically to allow the employees a full opportunity to present evidence to controvert the factual basis for termination (retrenchment due to losses) already found meritorious in the original Ardivilla decision. The employees, through their counsel, forfeited this opportunity by causing delays and ultimately submitting the case without presenting any additional evidence. Labor Arbiter Valaquio’s decision, though carelessly drafted, must be construed in this context. Its dismissal of “the case” logically referred to the dismissal of the employees’ opposition for their failure to prosecute, not a dismissal of the employer’s application. No evidence was ever presented to overthrow the factual findings of the Ardivilla decision. The NLRC’s interpretation—that the dismissal of the application meant the retrenchment ground was unjustified—was a serious error. It effectively penalized the employer for the employees’ procedural default and resurrected issues the employees themselves failed to prove. The Court thus upheld the original Ardivilla decision approving the termination.