Rosales v. New ANJH Enterprises

Facts: Respondent New ANJH Enterprises (New ANJH) is a sole proprietorship owned by respondent Noel Awayan. Petitioners are its former employees who worked as machine operators, drivers, helpers, lead and boiler men. 

Allegedly due to dwindling capital, Noel wrote the Director of DOLE Region IV-A regarding New ANJH's impending cessation of operations and the sale of its assets to respondent NH Oil Mill Corporation as well as the termination of 33 employees by reason thereof. Noel signed a Deed of Sale selling the equipment, machines, tools and/or other devices being used by New ANJH Enterprises to NH Oil. Noel met with the 33 affected employees to inform them of his plan and then later gave the employees uniformly-worded Notices informing them of the cessation of operations of New ANJH and the sale of its assets to a corporation. Noel also offered the employees, including petitioners, their separation pay. 

Respondents New ANJH and Noel filed before the NLRC Sub-Regional Arbitration Branch a Letter Request for Intervention. Petitioners received their separation benefits and signed their respective Quitclaims and Release and check vouchers. LA Guan declared the “labor dispute” between New ANJH and petitioners as dismissed with prejudice on ground of settlement. 

Petitioners however filed a complaint for illegal dismissal alleging that while New ANJH stopped its operations, it resumed its operations as NH Oil using the same machineries and with the same owners and management. ELA Santos found the petitioners had been illegally dismissed. NLRC denied respondents’ appeal. NLRC issued another decision reversing its earlier decision on the ground that it was barred by the Orders issued by LA Guan under the doctrine of res judicata. CA affirmed the NLRC Resolutions.

Issue: Whether the petitioners’ complaint for illegal dismissal was already barred by res judicata.

Held: No. Article 219 (previously Article 212) of the Labor Code defines a "labor dispute" as "any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee." As separation pay concerns a term and condition of employment, Noel's request to be guided in the payment thereof is clearly a labor dispute under the Labor Code.