Hijo Resources Corp vs Mijares

HIJO RESOURCES CORPORATION, Petitioner, v. EPIFANIO P. MEJARES

G.R. No. 208986, January 13, 2016
CARPIO, J.:
FACTS:
Respondents Epifanio P. Mejares, Remegio C. Baluran, Jr., Dante Saycon, and
Cecilio Cucharo (respondents) were among the complainants, represented by
their labor union named "Nagkahiusang Mamumuo ng Bit, Djevon, at Raquilla
Farms sa Hijo Resources Corporation" (NAMABDJERA-HRC), who filed with the
NLRC an illegal dismissal case against petitioner Hijo Resources Corporation
(HRC). Complainants (respondents) alleged that petitioner HRC, formerly
known as Hijo Plantation Incorporated (HPI), is the owner of agricultural
lands. In 2000, HPI was renamed as HRC. In December 2003, HRC's
application for the conversion of its agricultural lands into agri-industrial use
was approved. In 2001, complainants were absorbed by HRC, but they were
working under the contractor-growers: Buenaventura Tano (Bit Farm);
Djerame Pausa (Djevon Farm); and Ramon Q. Laurente (Raquilla Farm).
On 1 July 2007, complainants formed their union NAMABDJERA-HRC, which
was later registered with the Department of Labor and Employment (DOLE).
On 24 August 2007, NAMABDJERA-HRC filed a petition for certification
election before the DOLE. When HRC learned that complainants formed a
union, the three contractor-growers filed with the DOLE a notice of cessation
of business operations. In September 2007, complainants were terminated
from their employment on the ground of cessation of business operations by
the contractor-growers of HRC.
On 19 September 2007, complainants, represented by NAMABDJERA-HRC,
filed a case for unfair labor practices, illegal dismissal, and illegal deductions
with prayer for moral and exemplary damages and attorney's fees before the
NLRC. On 19 November 2007, DOLE Med-Arbiter Lito A. Jasa issued an Order,
dismissing NAMABDJERA-HRC's petition for certification election on the
ground that there was no employer-employee relationship between
complainants and HRC. Complainants did not appeal the Order of Med-Arbiter
but pursued the illegal dismissal case they filed.
On 4 January 2008, HRC filed a motion to dismiss the complaint for illegal
dismissal. The motion to dismiss was anchored on the following arguments:
(1) Lack of jurisdiction under the principle of res judicata; and (2) The Order
of the Med-Arbiter finding that complainants were not employees of HRC,
which complainants did not appeal, had become final and executory.
On 5 February 2008, Labor Arbiter Sagmit denied the motion to dismiss and
held that res judicata does not apply. ((The Labor Arbiter ruled that the

decision of the Med-Arbiter in a certification election case, by the nature of

that proceedings does not foreclose further dispute between the parties as
to the existence or non-existence of employer-employee relationship
between them. Thus, the finding of Med-Arbiter that no employment
relationship exists between HRC and complainants does not bar the Labor
Arbiter from making his own independent finding on the same issue. The
non-litigious nature of the proceedings before the Med-Arbiter does not
prevent the Labor Arbiter from hearing and deciding the case.))
HRC filed with the NLRC a petition for certiorari with a prayer for temporary
restraining order, seeking to nullify the Orders of Labor Arbiter. The NLRC
granted the petition.
((The NLRC held that the Med-Arbiter Order dismissing the certification
election case on the ground of lack of employer-employee relationship
between HRC and complainants (members of NAMABDJERA-HRC) constitutes
res judicata under the concept of conclusiveness of judgment, and thus,
warrants the dismissal of the case. The NLRC ruled that the Med-Arbiter
exercises quasi-judicial power and the Med-Arbiter's decisions and orders
have, upon their finality, the force and effect of a final judgment within the
purview of the doctrine of res judicata.))
The CA reversed the NLRCs Resolution. ((Under Article 217 of the Labor
Code, the Labor Arbiter has original and exclusive jurisdiction over illegal
dismissal cases. Although the proceedings before the Labor Arbiter are also
described as non-litigious, the Court of Appeals noted that the Labor Arbiter
is given wide latitude in ascertaining the existence of employment
relationship. Hence, the Court of Appeals concluded that the decision in a
certification election case does not foreclose further dispute as to the
existence or non-existence of an employer-employee relationship between
HRC and the complainants.))
ISSUE: Whether the Labor Arbiter, in the illegal dismissal case, is bound by
the ruling of the Med-Arbiter regarding the existence or non-existence of
employer-employee relationship between the parties in the certification
election case.
HELD: No. As found by the Court of Appeals, the facts in this case are very
similar to those in the Sandoval case, which also involved the issue of
whether the ruling in a certification election case on the existence or nonexistence of an employer-employee relationship operates as res judicata in
the illegal dismissal case filed before the NLRC. In Sandoval, the DOLE
Undersecretary reversed the finding of the Med-Arbiter in a certification
election case and ruled that there was no employer-employee relationship
between the members of the petitioner union and Sandoval Shipyards, Inc.
(SSI), since the former were employees of the subcontractors. Subsequently,
several illegal dismissal cases were filed by some members of the petitioner

union against SSI. Both the Labor Arbiter and the NLRC ruled that there was
no employer-employee relationship between the parties, citing the resolution
of the DOLE Undersecretary in the certification election case. The Court of
Appeals reversed the NLRC ruling and held that the members of the
petitioner union were employees of SSI. On appeal, this Court affirmed the
appellate court's decision and ruled that the Labor Arbiter and the NLRC
erred in relying on the pronouncement of the DOLE Undersecretary that
there was no employer-employee relationship between the parties. The Court
cited the ruling in the Manila Golf11 case that the decision in a certification
election case, by the very nature of that proceeding, does not foreclose all
further disputes between the parties as to the existence or non-existence of
an employer-employee relationship between them. This case is different from
the Chris Garments case cited by the NLRC where the Court held that the
matter of employer-employee relationship has been resolved with finality by
the DOLE Secretary, whose factual findings were not appealed by the losing
party. As mentioned earlier, the Med-Arbiter's order in this case dismissing
the petition for certification election on the basis of non-existence of
employer-employee relationship was issued after the members of the
respondent union were dismissed from their employment. The purpose of a
petition for certification election is to determine which organization will
represent the employees in their collective bargaining with the
employer.12The respondent union, without its member-employees, was thus
stripped of its personality to challenge the Med-Arbiter's decision in the
certification election case. Thus, the members of the respondent union were
left with no option but to pursue their illegal dismissal case filed before the
Labor Arbiter. To dismiss the illegal dismissal case filed before the Labor
Arbiter on the basis of the pronouncement of the Med-Arbiter in the
certification election case that there was no employer-employee relationship
between the parties, which the respondent union could not even appeal to
the DOLE Secretary because of the dismissal of its members, would be
tantamount to denying due process to the complainants in the illegal
dismissal case. This, we cannot allow.