G.G. Sportswear Manufacturing Corp. v. National Labor Relations Commission
REITERATIONFacts
The Antecedents: The controversy originated from multiple consolidated labor complaints filed by workers including Emily Refugio, Priscilla Gaddi, and others against G.G. Sportswear Manufacturing Corp. (GGSMC) and its President Nari K. Gidwani for illegal dismissal, constructive dismissal via rotation, illegal suspension, underpayment of wages, non-payment of 13th month pay, and other money claims. Gaddi, employed as export staff from February 1995 at P5,600 monthly, was placed on forced leave on January 11, 1998 due to alleged financial woes but operations continued without her recall or payment of benefits like 13th month pay for 1997-1998 and leave commutations despite demands. Other complainants, after filing a prior underpayment case (NLRC-NCR 00-00-04117-97), faced harassment including work rotation and dismissal for alleged 'blocking' activities on October 29, 1997 without investigation or hearing following their refusal to withdraw claims upon company entreaties. Cases spanned NLRC-NCR Nos. 00-09-06811-97, 00-09-06840-97, 00-10-07435-97, 00-12-05551-97, and 00-06-04732-98. Petitioners' counsel Atty. Vitales manifested withdrawal on January 14, 1999 hearing, formalized February 8, 1999, citing gratis service and lack of replacement counsel, amid petitioners' pending SEC petition for suspension of payments (SEC Case 08-97-5752, reinstated by CA). Complainants filed position papers timely; petitioners did not, waiving defenses. Procedural History: Labor Arbiter Facundo Leda, on December 28, 1999, ruled illegal dismissal in consolidated decision, ordering reinstatement, backwages, 13th month pay (Gaddi's P151,289.60; others P140,884.74 each, totaling P3,109,869.14), and attorney's fees, served via registry at Mandaluyong address and received. Gaddi moved for writ of execution; petitioners opposed citing SEC petition, but LA granted January 21, 2002 as decision final for non-appeal, issuing writ February 28, 2002. Petitioners opposed post-writ claiming non-receipt of decision. NLRC impliedly upheld via execution. CA dismissed Rule 65 petition (CA-G.R. SP 70297, May 18, 2006; recon denied Nov 10, 2006), ruling no grave abuse as mere SEC filing suspends nothing absent receiver appointment per PD 902-A Sec. 6, and RA 8799 retained SEC jurisdiction over pre-2000 petitions. The Petition: Petitioners assailed CA via Rule 45, arguing: (1) non-receipt of LA decision at Mandaluyong (old/evicted) despite known Makati address (773 J.P. Rizal St.) in summons, complaints, Gaddi's position paper; (2) Atty. Vitales withdrew pre-decision without hearing per Rules of Court Sec. 26 Rule 136; (3) service invalid post-withdrawal requiring direct party service per Labor Code Art. 224; (4) pending SEC suspension should deter execution; (5) CA ignored service issue. Respondents countered valid service at address of record (complaints listed Mandaluyong), receipt by counsel irrelevant as timelines run from service, no address change notice, SEC petition moot per SC G.R. 146526 dismissal, and petitioners responded to Mandaluyong notices proving knowledge.
Issue(s)
Whether the Labor Arbiter validly issued the writ of execution despite petitioners' claims of non-receipt of the December 28, 1999 decision and pending SEC suspension of payments petition, considering the mootness of the SEC petition and the lack of a court-ordered suspension. Whether service of the decision at the Mandaluyong address constituted proper service under Article 224 of the Labor Code amid counsel withdrawal and alleged address change, considering petitioners' failure to notify the Labor Arbiter of the address change and their lack of diligence in monitoring the case.
Ruling
The petition is DENIED for lack of merit. The CA decision and resolution in CA-G.R. SP No. 70297 are AFFIRMED, upholding the Labor Arbiter's order of January 21, 2002 and writ of execution of February 28, 2002.
Ratio Decidendi
On the Pendency of SEC Suspension of Payments Petition and Validity of Writ Issuance: The Court ruled the issue moot as petitioners admitted Supreme Court dismissal in G.R. No. 146526 (Hongkong and Shanghai Banking Corp. v. G.G. Sportswear), rendering the SEC petition non-existent. Even at issuance time (Jan/Feb 2002), mere filing does not suspend actions; PD 902-A Sec. 6 requires SEC appointment of management committee/receiver for ipso facto suspension, a step absent here. CA correctly noted RA 8799 Sec. 5.2 retained SEC jurisdiction over pre-June 30, 2000 petitions but filing alone insufficient, preventing Labor Arbiter interference. This aligns with policy favoring speedy labor dispute resolution over unconfirmed corporate pleas, ensuring final awards executable absent explicit stay. Petitioners' concession and lack of receiver appointment justified execution. On Validity of Service of Labor Arbiter's Decision: Service at Mandaluyong address (per complaints, prior notices) valid under Labor Code Art. 224, as petitioners never notified LA of change despite Makati summons/position paper service; records showed Mandaluyong as 'place of work' and prior responses thereto by Atty. Pascua. Atty. Vitales' withdrawal manifested Jan 14, 1999, formalized Feb 8, 1999 without objection, but petitioners failed to engage new counsel or file position paper despite Jan 18, 1999 order sent to both. Non-receipt claim afterthought: unraised in May 2001 opposition (focused solely on SEC), only in March 2002 post-order, unsupported by evidence against registry receipts. Art. 224 mandates separate service to parties/counsel; post-withdrawal, direct service proper at record address. Failure to appeal timely due to inattention (no position paper, no address update) fatal, no grave abuse in execution of final decision. Petitioners jolted only by execution motion notice at same address, proving constructive knowledge.
Main Doctrine
The mere filing of a petition for suspension of payments by a corporation with the SEC does not automatically suspend actions or claims pending before other tribunals, such as labor arbiters; suspension occurs only upon the SEC's appointment of a management committee, rehabilitation receiver, board, or body, as explicitly provided under Section 6 of PD No. 902-A. Service of a Labor Arbiter's decision is validly effected at the party's address of record as reflected in the complaint and prior pleadings, pursuant to Article 224 of the Labor Code, even if the party claims a change of address or prior eviction, absent formal notification to the tribunal of such change. A party's failure to file a position paper after due notice constitutes waiver of the right to present evidence or defenses, leading to a decision based solely on complainants' evidence and rendering it final and executory upon lapse of the appeal period without need for further proof of receipt by the party itself when served on counsel of record or address on file. Corporate officers, such as the president, are jointly and solidarily liable with the corporation for illegal dismissal awards, including backwages and benefits, where the dismissal is without just cause and due process. Claims of non-receipt of decisions are mere afterthoughts and lack merit when contradicted by registry receipts, prior responses to notices at the same address, and failure to raise the issue timely in opposition to execution motions or appeals.