Effects of an Order Placing a Company Under Rehabilitation by a Management Committee or Receiver

March 17, 2003NLRC MEMORANDUM CIRCULAR NO. 3-08-03FOR:All Presiding/Commissioners  Executive/Labor Arbiters   RE:Effects of an Order Placing a Company Under Rehabilitation by a Management Committee or Receiver Issues have been raised on whether or not an order placing a company under rehabilitation would result in an automatic suspension of proceedings before the NLRC. In order to ensure consistency in our decisions, whenever such questions are raised we should be guided by the following: CTSHDIThe applicable law is Presidential Decree No. 902-A which provides that "[U]pon the appointment of a management committee, rehabilitation receiver, board or body pursuant to this Decree, all actions for claims against corporations, partnerships, or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly."The jurisprudence on this matter is the case of Rubberworld (Phils.) Inc. vs. NLRC, et al., 305 SCRA 721, (April 14, 1999) —"It is plain from the foregoing provisions of law that 'upon the appointment (by the SEC) of a management committee or a rehabilitation receiver', all actions for claims against the corporation...