G.R. No. 92758 August 31, 1992
Emilio Venegas (doing business under the name and style of D’Beer Plaza), petitioner, vs. Second Division, National Labor Relations Commission, Eduardo G. Magno, and Melanio Diaz, respondents.

FACTS

1. Respondent Melanio Diaz filed a complaint for illegal dismissal against petitioner Emilio Venegas before the Labor Arbiter.
2. Labor Arbiter Eduardo Magno rendered a decision on March 13, 1987, finding illegal dismissal and ordering Venegas to pay Diaz: (a) two years’ back wages; (b) separation pay equivalent to one-half month’s salary per year of service; and (c) attorney’s fees.
3. No appeal was filed by Venegas. He claimed his counsel misunderstood the decision, believing it only ordered payment of separation pay for two years, and they only discovered the error upon receiving a notice of execution.
4. Venegas’s counsel filed a petition for relief from judgment under Rule 38 of the Rules of Court with the National Labor Relations Commission (NLRC).
5. The NLRC en banc initially denied the petition on August 27, 1987, but upon motion for reconsideration, reinstated it, declared it sufficient in form and substance, and issued a writ of preliminary injunction against the execution of the Labor Arbiter’s decision.
6. On August 8, 1989, the NLRC Second Division denied the petition for relief for lack of merit and lifted the preliminary injunction. Venegas’s motion for reconsideration was denied on February 20, 1990.
7. The NLRC Second Division noted that: (a) the Research and Information Unit computed the monetary award on April 19, 1987, and a copy was furnished to Venegas on May 18, 1987; (b) hearings on execution were scheduled on May 22 and June 15, 1987, where Venegas or his counsel did not appear despite notice; (c) the petition for relief was filed only on August 5, 1987; and (d) hearings on the petition were subsequently held.
8. The NLRC Second Division ruled that counsel’s failure to understand the decision, which was “couched in simple English,” constituted inexcusable negligence, and Venegas was bound by his attorney’s error.
9. Venegas filed a special civil action for certiorari with the Supreme Court, questioning the authority of the NLRC Second Division to overturn the acts of the NLRC en banc and insisting on excusable negligence.

ISSUE

1. Whether the NLRC Second Division had the authority to take cognizance of and decide the petition for relief, which had earlier been acted upon by the NLRC en banc.
2. Whether counsel’s alleged negligence constituted excusable negligence warranting relief from judgment under Rule 38.

RULING

1. Yes, the NLRC Second Division had the authority. Republic Act No. 6715 , which took effect on March 21, 1989, amended the Labor Code and divested the NLRC en banc of adjudicatory powers. Henceforth, such powers could only be exercised through the Commission’s divisions. Upon the effectivity of the law, the NLRC en banc could only sit for promulgating rules and regulations or formulating policies, but not for hearing and deciding cases. Consequently, the NLRC en banc lost jurisdiction over Venegas’s petition for relief, and the matter was properly referred to the Second Division, which had jurisdiction over cases from the National Capital Region.
2. No, counsel’s negligence was not excusable. The Supreme Court upheld the NLRC Second Division’s finding that the claimed failure of Venegas’s counsel to understand the Labor Arbiter’s decision constituted inexcusable negligence. The dispositive portion of the decision was clear and in simple English. Counsel’s admission of having erroneously read it pointed to gross negligence, which binds the client. The Court cited the settled rule that clients are bound by the actions of their counsel in the conduct of a case, and to admit a lawyer’s mistake and negligence as reasons for reopening cases would result in endless litigation.
DISPOSITIVE PORTION:
WHEREFORE, the petition is DENIED for lack of merit, with costs against petitioner.