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[G.R. No. 129722. January 17, 2001]

NEA, et al. vs. NLRC, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information is a resolution of this Court dated JAN. 17 2001.

G.R. No. 129722 (National Electrification Administration (NEA, represented by its Administrator, Teodorico P. Sanchez, vs. National Labor Relations Commission (3 rd Division), Labor Arbiter Dominador Saludares, Deputy Sheriff Antonio T. Datu, Sheriff Numeriano Reyes, Paterno Malicsi, Filipinas Fernandez, Sheila Santos, Nelson Datuin, Rodrigo Ortiz, Ramon Padilla, Roberto Pangan, Agustin Bernardo, Lauro Domingo, Maximo Cayucom, Zenaida Bartolome, Medel Vergel, Norman Manangan, Jimmy Mercado, Rizal Veneracion, Lyn Ravina, Danilo Aleta, Efren Madrid, Benigno Santos, Jaime dela Cruz, Warlito Ilagan, Reynante Francisco, Feliza Domingo, Fernando Navarro, Danilo Sta. Maria, Romero de Leon, Ruperto Lopez, Lilia dela Cruz, Romulo de Guzman, Hilario Sta. Maria, Dolores Santos, Hector Ordonez, Renato Gregorio, Antonio Camato, Aurelio Ignacio, Luzviminda Villacorta, Cristina Gonzales, Venerable Valizno, Ernesto Aquino, Alfredo Ilagan, Agapito Manuel, Efren Cahucom, Myra Medina, Berlito Tagaza, Marcelino Tolentino, Teodoro Veneracion, Elesito Samson, Edmundo Reyes, Merife Aquino, Melchor Mercado and Bayani Salva.)

The case is a petition for certiorari 1 Under Rules 65, 1964 Revised Rules of Court.with preliminary injunction or temporary restraining order, seeking to nullify the following:

(1) Decision of the Labor Arbiter 2 In Consolidated Cases Nos. RAB III-11-6020-94; 12-6057-94; 12-6078-94; 01-6092-95; 01-6104-95; 02-6169-95; 05-6338-95. dated August 28, 1996, which reads:

"WHEREFORE, all the foregoing considered, judgment is hereby rendered, as follows:

(1) Declaring the dismissal of all complainants from the service as illegal;

(2) Ordering the respondents to reinstate complainants to their former positions or equivalent positions without loss of seniority rights and other privileges with full payment of back wages inclusive of allowances and all other work related benefits from 1992 to date of reinstatement, which as of July 31, 1996, amounted to P12,653,352.00;

(3) Ordering respondents to reinstate complainants under the terms specified in the preceding paragraph with the option to complete payment of separation pay equivalent to one (1) month pay for every month of service in addition to back wages, if reinstatement is no longer feasible, after full payment of the above sums;

(4) Ordering the respondents to pay attorney's fees equivalent to 10% of the total awards.

"SO ORDERED.

"San Fernando, Pampanga, 28 August 1996.

"Dominador B. Saludares

"Labor Arbiter" 3 Rollo, pp. 173-200, Annex "H" of the petition.

(2) Order dated October 25, 1996 denying the Motion to Quash Partial Writ of Execution. 4 Rollo, pp. 227-229, Annex "M" of the petition.

(3) Notice of Levy and Notice of Sale of Execution issued on April 1, 1997 . 5 Rollo, p. 248, Annex "R" of the petition.

(4) Certificate of Sheriff's Sale issued on May 26, 1997 . 6 Rollo , p. 249, Annex "S" of the petition.

and to enjoin the National Labor Relations Commission (hereinafter referred to as "NLRC") Deputy Sheriffs Antonio T. Datu and Numeriano Reyes from enforcing the partial writ of execution 7 Issued on October 4, 1996 by Labor Arbiter Dominador Saludares, Rollo, pp. 217-220, Annex "K" of the petition.and alias writs of execution 8 Alias Writ of Execution issued on October 31, 1996, Rollo, pp. 230-232, Annex "N" of the petition; 2nd Alias Writ of Execution issued on November 29, 1996, Rollo, pp. 233-235, Annex "O" of the petition; 3rd Alias Writ of Execution issued on February 26, 1997, Rollo, pp. 244-247, Annex "Q" of the petition.issued pursuant to the decision of respondent Labor Arbiter, for having been issued without jurisdiction and with grave abuse of discretion.

The pertinent facts are as follows:

Starting the year 1986 to 1988, the Nueva Ecija III Electric Cooperative, Inc. (hereafter NEECO III) encountered serious institutional problems, deteriorating collection efficiency, unsurpassed systems losses due to theft and pilferage of electricity, and frequent brownouts caused by electric power disconnection by the National Power Corporation, for failure to pay its maturing power bills. Petitioner National Electrification Administration (hereinafter referred to a "NEA") is a government agency established under Republic Act No. 6308, as amended with regulatory supervision and control over electric cooperatives in the country extended loans to NEECO III amounting to P171,470,463.00 as of December 31, 1994. As security for the loans, NEECO III mortgaged its entire electrical system or its entire property to NEA. NEECO III failed to pay its loan amortization to NEA.

On May 4, 1988, NEECO III availed itself of NEA's re-lending program to settle its obligations with National Power Corporation (NPC), resulting to the NEA-NEECO III re-lending agreement. By virtue of such agreement, NEECO III's board of directors was converted to an advisory council with NEA designating a project supervisor/acting general manager to take charge of NEECO III operations and management. NEA in turn infused P30,000,000.00 to pay NPC and for the rehabilitation of NEECO III. NEECO III, however, still defaulted on its loan amortizations to NEA.

Due to losses, NEECO III's members-consumers filed with NEA a petition 9 Rollo , pp. 154-166, Annex "C" of the petition.for voluntary dissolution and cancellation of NEECO III's franchise, praying for the turn-over of NEECO III's assets and electric system to NEA as payment of NEECO III's outstanding loan obligations.

On March 23, 1992, after compliance with the requirement of notice 10 Rollo, p. 167, Annex "D" of the petition.of dissolution and certification 11 Rollo, p. 168, Annex "E" of the petition.issued by NEA administrator Rodrigo E. Cabrera, pursuant to Sec 34 of P.D. 269, NEECO III was dissolved. NEA then took over its property being the creditor mortgage pending foreclosure proceedings. However, NEA constituted a Management Team to continue the operations of NEECO III even at a loss to avoid disruption of electric service to the public in its franchised area.

Sometime in March 1992, employees of NEECO III, except for a few, were terminated from their employment with corresponding separation pay equivalent to one (1) month pay for every year of service.

On June 25, 1992, NEA adopted Resolution No. 42 confirming the dissolution of NEECO III, approving the cancellation of its franchise and granting a provisional franchise to NEECO II, which was organized to take over operations of NEECO III. The resolution also approved the foreclosure of the property of NEECO III and the acts of the NEA Management Team including the payment of separation pay to the employees of the defunct NEECO III. 12 Rollo, p. 170.

On November 25, 1994, respondent Paterno Malicsi and other former employees of the defunct NEECO III, filed with the Office of the Labor Arbiter, RAB III, San Fernando, Pampanga, complaints for illegal dismissal, non-payment of salaries/wages, 13th month pay differential and bonuses against NEECO III, and/or NEECO II, and /or NEA Management Team. 13 Original Record, Vol. I, pp. 1-2.On January 25, 1995, petitioner NEA moved to dismiss the complaints on the ground of lack of jurisdiction over the subject matter of the action (dissolution of NEECO III) and over the person of NEA, lack of cause of action and lack of employer-employee relationship. 14 Original Record, Vol. I, pp. 16-22.

On August 17, 1995, the Labor Arbiter issued an order denying the motion to dismiss for lack of merit. 15 Original Record, pp. 99-103.After the submission of position papers, on August 28, 1996, the Labor Arbiter rendered judgment, quoted in the opening paragraph of this resolution.

On September 24, 1996, NEECO III received his copy of decision while NEA received its copy on September 26, 1996.

On October 3, 1996, complainants filed with the Labor Arbiter a motion for execution of the reinstatement aspect of the decision. 16 Original Record, Vol. I, pp. 494-497.On October 4, 1996, NEA appealed to the National Labor Relations Commission from the decision of the labor arbiter dated August 28, 1996. 17 Original Record, Vol. 11, pp. 13-14.

Acting on the motion for execution, the Labor Arbiter issued a writ of execution, and subsequently, alias writs of execution to enforce the judgment pending appeal. On July 23, 1997, petitioner filed this petition. 18 Rollo, pp. 3-41.On November 18, 1998, the Court issued a temporary restraining order. 19 Rollo, pp. 400-409.

On September 22, 1999, we gave due course to the petition and required parties to file their respective memoranda. 20 Rollo, pp. 428-429.

Petitioner now assails the decision of the respondent Labor Arbiter for having been issued without jurisdiction.

The Labor Arbiter has no jurisdiction over the subject complaints filed by respondents, in the absence of employer-employee relationship between NEA and NEECO III, which has been legally dissolved and ceased to exist as a corporate entity and franchise holder. 21 San Miguel Corp. v. NLRC, 161 SCRA 719 [1988]; Dai-Chi Electronics Manifacturing Corp. v. Villarama, 238 SCRA 267 [1994]; Georg Grotjahn v. Isnani, 235 SCRA 216 [1994].Without this critical element of employer-employee relation, the Labor Arbiter and the National Labor Relations Commission has no jurisdiction over the dispute the case at bar.

In light of the decision in St. Martin Funeral Homes vs. NLRC and Bienvenido Aricayos (G.R. No. 130866, 16 September 1998), this Court resolves to REFER to the Court of Appeals this special civil action for certiorari. Pending resolution of the Court of Appeals on the merits of the case, the temporary restraining issued on November 18, 1998 shall remain in force.

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO

Clerk of Court


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