National Power Corporation v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: The National Power Corporation (NAPOCOR) contracted Westinghouse International Projects Company (Westinghouse) as principal contractor and Power Contractors Inc. (PCI) as sub-contractor for the construction of the Philippine Nuclear Power Plant Unit No. I (PNPP-I). Over six thousand workers hired by PCI were terminated without receiving separation pay. Between 1982 and 1985, twenty-seven cases for illegal dismissal and non-payment of benefits were filed against PCI, which were consolidated. Procedural History: On May 28, 1985, NAPOCOR, Westinghouse, and PCI executed a Memorandum of Understanding (MOU) regarding the labor claims, wherein NAPOCOR agreed to indemnify/reimburse PCI for liabilities arising from these claims. On June 23, 1986, the Labor Arbiter ordered NAPOCOR and Westinghouse impleaded as additional respondents. The Office of the Solicitor General (OSG) entered its appearance as counsel for NAPOCOR on September 11, 1986. A Labor Arbiter's decision dated December 29, 1988, held NAPOCOR, Westinghouse, and PCI jointly and severally liable for separation pay and other monetary claims. A copy of this decision was served on a special attorney representing NAPOCOR, but not on the OSG. The special attorneys filed a Motion for Extension of Time to File Appeal and an Appeal Memorandum. On July 7, 1989, the Labor Arbiter denied due course to NAPOCOR's appeal for being filed out of time. The OSG filed a Notice of Appeal and Appeal Memorandum on July 17, 1989, arguing it was not served a copy of the decision. The National Labor Relations Commission (NLRC) dismissed NAPOCOR's appeal on October 6, 1989, for being filed beyond the reglementary period. An Alias Writ of Execution was issued for P73,463,695.00. NAPOCOR filed a petition for certiorari with the Supreme Court. The Petition: NAPOCOR sought the nullification of the Labor Arbiter's decision, order, alias writ of execution, and the NLRC's resolution, primarily arguing denial of due process due to improper service of the decision on the OSG, and that its appeal was seasonably filed. It also questioned the Labor Arbiter's power to nullify Policy Instruction No. 20 and argued that the transfer of PNPP-I ownership to the National Government absolved it of liability. Westinghouse also assailed the Labor Arbiter's decision, asserting lack of jurisdiction due to lack of summons.
Issue(s)
Whether NAPOCOR was denied due process due to improper service of the Labor Arbiter's decision on its counsel, the OSG. Whether NAPOCOR's appeal to the NLRC was filed within the reglementary period. Whether the Labor Arbiter had the authority to deny due course to NAPOCOR's appeal. Whether the Labor Arbiter erred in nullifying Policy Instruction No. 20 of the Secretary of Labor. Whether NAPOCOR is absolved from liability due to the transfer of PNPP-I ownership to the National Government. Whether the Labor Arbiter acquired jurisdiction over Westinghouse International Projects Company.
Ruling
The petition is PARTIALLY GRANTED. The Supreme Court found grave abuse of discretion on the part of the NLRC in dismissing NAPOCOR's appeal. The case is REMANDED to the NLRC for prompt adjudication on the merits. The temporary restraining order against NAPOCOR is LIFTED. Westinghouse International Company is ABSOLVED from liability.
Ratio Decidendi
On the issue of due process and service of the Labor Arbiter's decision: The Court held that service of the Labor Arbiter's decision must be made on the OSG, as it is the principal counsel for government instrumentalities like NAPOCOR. Service on a deputized special attorney is insufficient. The OSG retains supervision and control over the deputized lawyer, and the period to appeal only commences upon receipt of the decision by the OSG. Since the OSG was not served, the period to appeal did not commence, making the appeal filed by the OSG on July 17, 1989, timely. The NLRC committed grave abuse of discretion in dismissing the appeal for being filed out of time. On the timeliness of NAPOCOR's appeal: Based on the ruling regarding improper service on the OSG, the appeal filed by the OSG on July 17, 1989, was considered timely. The Court found that the NLRC erred in dismissing the appeal for being filed out of time, necessitating a remand for resolution on the merits. On the Labor Arbiter's power to deny due course to an appeal: The Court noted that under the old NLRC Rules, the Labor Arbiter had implied power to rule upon an appeal and could even terminate it. However, under the Revised Rules of the NLRC, only the Commission (NLRC) was authorized to impose penalties for frivolous or dilatory appeals, implying the Labor Arbiter was divested of this power. Therefore, the Labor Arbiter's July 7, 1989 Order denying the appeal was improper, although the NLRC subsequently also dismissed the appeal. On the Labor Arbiter's power to nullify Policy Instruction No. 20: The Court stated that this issue delves into the merits of the labor case and involves factual determinations, making it a proper subject for the remanded case before the NLRC for resolution. On NAPOCOR's liability after the transfer of PNPP-I ownership: The Court noted that Executive Order No. 55 transferred ownership of PNPP-I to the National Government, which also assumed related peso obligations. However, NAPOCOR continued to appear before the Labor Arbiter without pleading this event until after the adverse decision. Since the case was remanded to the NLRC for resolution on the merits, NAPOCOR's liability, which had not yet been decided with finality, could be modified or affirmed by the NLRC. On the jurisdiction over Westinghouse International Projects Company: The Court found that Westinghouse was not properly served with summons and did not voluntarily appear before the Labor Arbiter. The service of orders on a law firm that disclaimed representation of Westinghouse did not confer jurisdiction. Therefore, the Labor Arbiter's decision was null and void with respect to Westinghouse for violation of due process, and the principle of res inter alios acta applied.
Main Doctrine
Service of decisions and orders on a deputized special attorney, rather than on the Office of the Solicitor General (OSG), is insufficient and not binding on the government agency or corporation represented by the OSG. The period to appeal is reckoned from the date the OSG receives a copy of the decision. Furthermore, a party against whom a judgment is rendered must be properly served with summons to acquire jurisdiction; otherwise, the decision is void for violation of due process.