SECOND DIVISION

[G.R. No. 153660. June 10, 2003.]

PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA,
EDDIE LADICA, ARMAN QUELING, ROLANDO NIETO, RICARDO
BARTOLOME, ELUVER GARCIA, EDUARDO GARCIA and NELSON
MANALASTAS, petitioners, vs. COCA-COLA BOTTLERS PHILS.,
INC., respondent.

UST Legal Aid Clinic for petitioners.

Abello Concepcion Regala & Cruz for respondent.
SYNOPSIS
Petitioners led a complaint against respondent for illegal dismissal. The Labor
Arbiter ordered respondent to reinstate complainants to their former positions and
to pay their full back wages. On appeal, the National Labor Relations Commission
(NLRC) sustained the nding of the Labor Arbiter. Respondent appealed to the Court
of Appeals (CA) which armed the nding of the NLRC, but agreed with the
respondent that the adavits of some of the complainants should not have been
given probative value for failure to affirm the contents thereof and to undergo crossexamination. As a consequence, the CA dismissed their complaints for lack of
sufficient evidence. Hence, this petition.
In granting the present petition, the Supreme Court ruled that administrative
bodies like the NLRC are not bound by the technical niceties of law and procedure
and the rules obtaining in courts of law. Indeed, the Revised Rules of Court and
prevailing jurisprudence may be given only stringent application, i.e., by analogy or
in suppletory character and eect. The submission by respondent, citing People v.
Sorrel, that an adavit not testied to in a trial, is mere hearsay evidence and has
no real evidentiary value, cannot nd relevance in the present case considering that
a criminal prosecution requires a quantum of evidence dierent from that of an
administrative proceeding. Under the Rules of the Commission, the Labor Arbiter is
given the discretion to determine the necessity of a formal trial or hearing. Hence,
trial-type hearings are not even required as the cases may be decided based on
verified position papers, with supporting documents and their affidavits.
SYLLABUS
1.
REMEDIAL LAW; EVIDENCE; AFFIDAVITS; GIVEN EVIDENTIARY VALUE
DESPITE FAILURE OF AFFIANTS TO UNDERGO CROSS-EXAMINATION IN
PROCEEDINGS BEFORE ADMINISTRATIVE BODIES LIKE THE NLRC. The oft-cited
case of Rabago v. NLRC squarely grapples a similar challenge involving the propriety

of the use of adavits without the presentation of aants for cross-examination. In

that case, we held that "the argument that the adavit is hearsay because the
aants were not presented for cross-examination is not persuasive because the
rules of evidence are not strictly observed in proceedings before administrative
bodies like the NLRC where decisions may be reached on the basis of position papers
only." In Rase v. NLRC, this Court likewise sidelined a similar challenge when it
ruled that it was not necessary for the aants to appear and testify and be crossexamined by counsel for the adverse party. To require otherwise would be to negate
the rationale and purpose of the summary nature of the proceedings mandated by
the Rules and to make mandatory the application of the technical rules of evidence.
2.
ID.; ID.; RULES OF EVIDENCE PREVAILING IN COURTS OF LAW DO NOT
CONTROL PROCEEDINGS BEFORE THE LABOR ARBITER AND THE NLRC.
Southern Cotabato Dev. and Construction Co. v. NLRC succinctly states that under
Art. 221 of the Labor Code, the rules of evidence prevailing in courts of law do not
control proceedings before the Labor Arbiter and the NLRC. Further, it notes that the
Labor Arbiter and the NLRC are authorized to adopt reasonable means to ascertain
the facts in each case speedily and objectively and without regard to technicalities of
law and procedure, all in the interest of due process. We nd no compelling reason
to deviate therefrom. To reiterate, administrative bodies like the NLRC are not
bound by the technical niceties of law and procedure and the rules obtaining in
courts of law. Indeed, the Revised Rules of Court and prevailing jurisprudence may
be given only stringent application, i.e., by analogy or in a suppletory character and
eect. The submission by respondent, citing People v. Sorrel , that an adavit not
testied to in a trial, is mere hearsay evidence and has no real evidentiary value,
cannot nd relevance in the present case considering that a criminal prosecution
requires a quantum of evidence dierent from that of an administrative proceeding.
Under the Rules of the Commission, the Labor Arbiter is given the discretion to
determine the necessity of a formal trial or hearing. Hence, trial-type hearings are
not even required as the cases may be decided based on veried position papers,
with supporting documents and their affidavits.
3.
CIVIL LAW; OBLIGATIONS AND CONTRACTS; WAIVERS AND QUITCLAIMS,
WHEN VALID; CASE AT BAR. As to whether petitioner Nestor Romero should be
properly impleaded in the instant case, we only need to follow the doctrinal
guidance set by Periquet v. NLRC which outlines the parameters for valid
compromise agreements, waivers and quitclaims "Not all waivers and quitclaims
are invalid as against public policy. If the agreement was voluntarily entered into
and represents a reasonable settlement, it is binding on the parties and may not
later be disowned simply because of a change of mind. It is only where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person, or the
terms of settlement are unconscionable on its face, that the law will step in to annul
the questionable transaction. But where it is shown that the person making the
waiver did so voluntarily, with full understanding of what he was doing, and the
consideration for the quitclaim is credible and reasonable, the transaction must be
recognized as a valid and binding undertaking." In closely examining the subject
agreements, we nd that on their face the Compromise Agreement and Release,
Waiver and Quitclaim are devoid of any palpable inequity as the terms of

settlement therein are fair and just. Neither can we glean from the records any
attempt by the parties to renege on their contractual agreements, or to disavow or
disown their due execution. Consequently, the same must be recognized as valid
and binding transactions and, accordingly, the instant case should be dismissed and
finally terminated insofar as concerns petitioner Nestor Romero.
ISCDEA

DECISION
BELLOSILLO, J :
p

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision of the Court of Appeals 1 dated 21 December 2001 which
armed with modication the decision of the National Labor Relations Commission
promulgated 30 March 2001. 2
On 15 February 1995 sixty-two (62) employees of respondent Coca-Cola Bottlers,
Inc., and its ocers, Lipercon Services, Inc., People's Specialist Services, Inc., and
Interim Services, Inc., led a complaint against respondents for unfair labor practice
through illegal dismissal, violation of their security of tenure and the perpetuation
of the "Cabo System." They thus prayed for reinstatement with full back wages, and
the declaration of their regular employment status.
aSATHE

For failure to prosecute as they failed to either attend the scheduled mandatory
conferences or submit their respective adavits, the claims of fty-two (52)
complainant-employees were dismissed. Thereafter, Labor Arbiter Jose De Vera
conducted claricatory hearings to elicit information from the ten (10) remaining
complainants (petitioners herein) relative to their alleged employment with
respondent firm.
In substance, the complainants averred that in the performance of their duties as
route helpers, bottle segregators, and others, they were employees of respondent
Coca-Cola Bottlers, Inc. They further maintained that when respondent company
replaced them and prevented them from entering the company premises, they were
deemed to have been illegally dismissed.
In lieu of a position paper, respondent company led a motion to dismiss complaint
for lack of jurisdiction and cause of action, there being no employer-employee
relationship between complainants and Coca-Cola Bottlers, Inc., and that
respondents Lipercon Services, People's Specialist Services and Interim Services
b e i n g bona de independent contractors, were the real employers of the
complainants. 3 As regards the corporate ocers, respondent insisted that they
could not be faulted and be held liable for damages as they only acted in their
official capacities while performing their respective duties.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision ordering respondent
company to reinstate complainants to their former positions with all the rights,

privileges and benets due regular employees, and to pay their full back wages
which, with the exception of Prudencio Bantolino whose back wages must be
computed upon proof of his dismissal as of 31 May 1998, already amounted to an
aggregate of P1,810,244.00. 4
In nding for the complainants, the Labor Arbiter ruled that in contrast with the
negative declarations of respondent company's witnesses who, as district sales
supervisors of respondent company denied knowing the complainants personally,
the testimonies of the complainants were more credible as they suciently supplied
every detail of their employment, specically identifying who their salesmen/drivers
were, their places of assignment, aside from their dates of engagement and
dismissal.
On appeal, the NLRC sustained the nding of the Labor Arbiter that there was
indeed an employer-employee relationship between the complainants and
respondent company when it affirmed in toto the latter's decision.
In a resolution dated 17 July 2001 the NLRC subsequently denied for lack of merit
respondent's motion for consideration.
Respondent Coca-Cola Bottlers appealed to the Court of Appeals which, although
arming the nding of the NLRC that an employer-employee relationship existed
between the contending parties, nonetheless agreed with respondent that the
adavits of some of the complainants, namely, Prudencio Bantolino, Nestor
Romero, Nilo Espina, Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and Nelson
Manalastas, should not have been given probative value for their failure to arm
the contents thereof and to undergo cross-examination. As a consequence, the
appellate court dismissed their complaints for lack of sucient evidence. In the
same Decision however, complainants Eddie Ladica, Arman Queling and Rolando
Nieto were declared regular employees since they were the only ones subjected to
cross-examination. 5 Thus

. . . (T)he labor arbiter conducted claricatory hearings to ferret out the

truth between the opposing claims of the parties thereto. He did not submit
the case based on position papers and their accompanying documentary
evidence as a full-blown trial was imperative to establish the parties' claims.
As their allegations were poles apart, it was necessary to give them ample
opportunity to rebut each other's statements through cross-examination. In
fact, private respondents Ladica, Quelling and Nieto were subjected to rigid
cross-examination by petitioner's counsel. However, the testimonies of
private respondents Romero, Espina, and Bantolino were not subjected to
cross-examination, as should have been the case, and no explanation was
oered by them or by the labor arbiter as to why this was dispensed with.
Since they were represented by counsel, the latter should have taken steps
so as not to squander their testimonies. But nothing was done by their
counsel to that effect. 6

Petitioners now pray for relief from the adverse Decision of the Court of Appeals;
that, instead, the favorable judgment of the NLRC be reinstated.
In essence, petitioners argue that the Court of Appeals should not have given
weight to respondent's claim of failure to cross-examine them. They insist that,
unlike regular courts, labor cases are decided based merely on the parties' position
papers and adavits in support of their allegations and subsequent pleadings that
may be led thereto. As such, according to petitioners, the Rules of Court should not
be strictly applied in this case specically by putting them on the witness stand to
be cross-examined because the NLRC has its own rules of procedure which were
applied by the Labor Arbiter in coming up with a decision in their favor.
In its disavowal of liability, respondent commented that since the other alleged
aants were not presented in court to arm their statements, much less to be
cross-examined, their adavits should, as the Court of Appeals rightly held, be
stricken o the records for being self-serving, hearsay and inadmissible in evidence.
With respect to Nestor Romero, respondent points out that he should not have been
impleaded in the instant petition since he already voluntarily executed a
Compromise Agreement, Waiver and Quitclaim in consideration of P450,000.00.
Finally, respondent argues that the instant petition should be dismissed in view of
the failure of petitioners 7 to sign the petition as well as the verication and
certication of non-forum shopping, in clear violation of the principle laid down in
Loquias v. Office of the Ombudsman. 8
The crux of the controversy revolves around the propriety of giving evidentiary
value to the adavits despite the failure of the aants to arm their contents and
undergo the test of cross-examination.
The petition is impressed with merit. The issue confronting the Court is not without
precedent in jurisprudence. The oft-cited case of Rabago v. NLRC 9 squarely grapples
a similar challenge involving the propriety of the use of adavits without the
presentation of aants for cross-examination. In that case, we held that "the
argument that the adavit is hearsay because the aants were not presented for
cross-examination is not persuasive because the rules of evidence are not strictly
observed in proceedings before administrative bodies like the NLRC where decisions
may be reached on the basis of position papers only."
I n Rase v. NLRC , 10 this Court likewise sidelined a similar challenge when it ruled
that it was not necessary for the aants to appear and testify and be crossexamined by counsel for the adverse party. To require otherwise would be to negate
the rationale and purpose of the summary nature of the proceedings mandated by
the Rules and to make mandatory the application of the technical rules of evidence.

Southern Cotabato Dev. and Construction Co. v. NLRC 11 succinctly states that
under Art. 221 of the Labor Code, the rules of evidence prevailing in courts of law do
not control proceedings before the Labor Arbiter and the NLRC. Further, it notes that
the Labor Arbiter and the NLRC are authorized to adopt reasonable means to
ascertain the facts in each case speedily and objectively and without regard to
technicalities of law and procedure, all in the interest of due process. We nd no

compelling reason to deviate therefrom.

To reiterate, administrative bodies like the NLRC are not bound by the technical
niceties of law and procedure and the rules obtaining in courts of law. Indeed, the
Revised Rules of Court and prevailing jurisprudence may be given only stringent
application, i.e., by analogy or in a suppletory character and eect. The submission
by respondent, citing People v. Sorrel, 12 that an adavit not testied to in a trial, is
mere hearsay evidence and has no real evidentiary value, cannot nd relevance in
the present case considering that a criminal prosecution requires a quantum of
evidence dierent from that of an administrative proceeding. Under the Rules of the
Commission, the Labor Arbiter is given the discretion to determine the necessity of
a formal trial or hearing. Hence, trial-type hearings are not even required as the
cases may be decided based on veried position papers, with supporting documents
and their affidavits.
As to whether petitioner Nestor Romero should be properly impleaded in the instant
case, we only need to follow the doctrinal guidance set by Periquet v. NLRC 13 which
outlines the parameters for valid compromise agreements, waivers and quitclaims

Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable
settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the
waiver was wangled from an unsuspecting or gullible person, or the terms
of settlement are unconscionable on its face, that the law will step in to annul
the questionable transaction. But where it is shown that the person making
the waiver did so voluntarily, with full understanding of what he was doing,
and the consideration for the quitclaim is credible and reasonable, the
transaction must be recognized as a valid and binding undertaking.

In closely examining the subject agreements, we nd that on their face the

Compromise Agreement 14 and Release, Waiver and Quitclaim 15 are devoid of any
palpable inequity as the terms of settlement therein are fair and just. Neither can
we glean from the records any attempt by the parties to renege on their contractual
agreements, or to disavow or disown their due execution. Consequently, the same
must be recognized as valid and binding transactions and, accordingly, the instant
case should be dismissed and nally terminated insofar as concerns petitioner
Nestor Romero.
We cannot likewise accommodate respondent's contention that the failure of all the
petitioners to sign the petition as well as the Verication and Certication of NonForum Shopping in contravention of Sec. 5, Rule 7, of the Rules of Court will cause
the dismissal of the present appeal. While the Loquias case requires the strict
observance of the Rules, it however provides an escape hatch for the transgressor to
avoid the harsh consequences of non-observance. Thus
. . . . We nd that substantial compliance will not suce in a matter involving
strict observance of the rules. The attestation contained in the certication

on non-forum shopping requires personal knowledge by the party who

executed the same. Petitioners must show reasonable cause for failure to
personally sign the certication. Utter disregard of the rules cannot justly be
rationalized by harking on the policy of liberal construction (Italics supplied).

In their Ex Parte Motion to Litigate as Pauper Litigants , petitioners made a request

for a fteen (15)-day extension, i.e., from 24 April 2002 to 8 May 2002, within
which to le their petition for review in view of the absence of a counsel to
represent them. 16 The records also reveal that it was only on 10 July 2002 that
Atty. Arnold Cacho, through the UST Legal Aid Clinic, made his formal entry of
appearance as counsel for herein petitioners. Clearly, at the time the instant
petition was led on 7 May 2002 petitioners were not yet represented by counsel.
Surely, petitioners who are non-lawyers could not be faulted for the procedural
lapse since they could not be expected to be conversant with the nuances of the
law, much less knowledgeable with the esoteric technicalities of procedure. For this
reason alone, the procedural inrmity in the ling of the present petition may be
overlooked and should not be taken against petitioners.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is
REVERSED and SET ASIDE and the decision of the NLRC dated 30 March 2001
which affirmed in toto the decision of the Labor Arbiter dated 29 May 1998 ordering
respondent Coca-Cola Bottlers Phils., Inc., to reinstate Prudencio Bantolino, Nilo
Espina, Eddie Ladica, Arman Queling, Rolando Nieto, Ricardo Bartolome, Eluver
Garcia, Eduardo Garcia and Nelson Manalastas to their former positions as regular
employees, and to pay them their full back wages, with the exception of Prudencio
Bantolino whose back wages are yet to be computed upon proof of his dismissal, is
REINSTATED, with the MODIFICATION that herein petition is DENIED insofar as it
concerns Nestor Romero who entered into a valid and binding Compromise
Agreement and Release, Waiver and Quitclaim with respondent company.
ECTIcS

SO ORDERED.

Quisumbing, Austria-Martinez and Callejo, Sr., JJ., concur.

Footnotes
1.

Penned by Associate Justice Martin S. Villarama, Jr., concurred in by Associate

Justices Conchita Carpio Morales and Sergio L. Pestao, former Ninth Division,
Court of Appeals.

2.

Penned by Commissioner Victoriano Calaycay, Second Division, NLRC, concurred

in by Presiding Commissioner Raul T. Aquino and Commissioner Angelita A.
Gacutan.

3.

Original Records, p. 41.

4.

Id. at 545.

5.

Rollo, p. 26.

6.

Id. at 32.

7.

Of the seven (7) petitioners only Ricardo Bartolome signed the verication and
certification of non-forum shopping

8.

G.R. No. 139396, 15 August 2000, 338 SCRA 62.

9.

G.R. No. 82868, 5 August 1991, 200 SCRA 158.

10.

G.R. No. 110637, 7 October 1994, 237 SCRA 523.

11.

G.R. No. 121582, 16 October 1997, 280 SCRA 853.

12.

G.R. No. 119332, 29 August 1997, 278 SCRA 368.

13.

G.R. No. 91298, 22 June 1990, 186 SCRA 724.

14.

Rollo, p. 82, Annex "A."

15.

Id. at 84, Annex "B."

16.

Petitioners' counsel of record, Atty. Armando Ampil, had signied his intention to
withdraw from the case in view of his commitment in other equally important
cases.