Professional Documents
Culture Documents
b. Co-host for Mel & Jay television program, 5:30 to 7:00 p.m.,
Sundays.[3]
BROADCASTING
DECISION
On 1 April 1996, SONZA wrote a letter to ABS-CBNs President,
Eugenio Lopez III, which reads:
CARPIO, J.:
The Case
Before this Court is a petition for review on certiorari[1] assailing
the 26 March 1999 Decision[2] of the Court of Appeals in CA-G.R. SP
No. 49190 dismissing the petition filed by Jose Y. Sonza
(SONZA). The Court of Appeals affirmed the findings of the National
Labor Relations Commission (NLRC), which affirmed the Labor
Arbiters dismissal of the case for lack of jurisdiction.
The Facts
In May 1994, respondent ABS-CBN Broadcasting Corporation
(ABS-CBN) signed an Agreement (Agreement) with the Mel and Jay
Management and Development Corporation (MJMDC).ABS-CBN was
represented by its corporate officers while MJMDC was represented
by SONZA, as President and General Manager, and Carmela Tiangco
(TIANGCO), as EVP and Treasurer. Referred to in the Agreement as
AGENT, MJMDC agreed to provide SONZAs services exclusively to
ABS-CBN as talent for radio and television. The Agreement listed the
services SONZA would render to ABS-CBN, as follows:
a. Co-host for Mel & Jay radio program, 8:00 to 10:00 a.m.,
Mondays to Fridays;
JOSE Y.
SONZA
[4]
x x x the May 1994 Agreement will readily reveal that MJMDC entered into
the contract merely as an agent of complainant Sonza, the principal. By all
indication and as the law puts it, the act of the agent is the act of the principal
itself. This fact is made particularly true in this case, as admittedly MJMDC
is a management company devoted exclusively to managing the careers of
Mr. Sonza and his broadcast partner, Mrs. Carmela C. Tiangco. (Opposition
to Motion to Dismiss)
Clearly, the relations of principal and agent only accrues between
complainant Sonza and MJMDC, and not between ABS-CBN and
MJMDC. This is clear from the provisions of the May 1994 Agreement
which specifically referred to MJMDC as the AGENT. As a matter of fact,
when complainant herein unilaterally rescinded said May 1994 Agreement, it
was MJMDC which issued the notice of rescission in behalf of Mr. Sonza,
who himself signed the same in his capacity as President.
Moreover, previous contracts between Mr. Sonza and ABS-CBN reveal the
fact that historically, the parties to the said agreements are ABS-CBN and
Mr. Sonza. And it is only in the May 1994 Agreement, which is the latest
Agreement executed between ABS-CBN and Mr. Sonza, that MJMDC
figured in the said Agreement as the agent of Mr. Sonza.
We find it erroneous to assert that MJMDC is a mere labor-only contractor of
ABS-CBN such that there exist[s] employer-employee relationship between
the latter and Mr. Sonza. On the contrary, We find it indubitable, that
MJMDC is an agent, not of ABS-CBN, but of the talent/contractor Mr.
Sonza, as expressly admitted by the latter and MJMDC in the May 1994
Agreement.
It may not be amiss to state that jurisdiction over the instant controversy
indeed belongs to the regular courts, the same being in the nature of an action
for alleged breach of contractual obligation on the part of respondentappellee. As squarely apparent from complainant-appellants Position Paper,
his claims for compensation for services, 13th month pay, signing bonus and
travel allowance against respondent-appellee are not based on the Labor
Code but rather on the provisions of the May 1994 Agreement, while his
claims for proceeds under Stock Purchase Agreement are based on the
latter. A portion of the Position Paper of complainant-appellant bears perusal:
Under [the May 1994 Agreement] with respondent ABS-CBN, the latter
contractually bound itself to pay complainant a signing bonus consisting of
shares of stockswith FIVE HUNDRED THOUSAND PESOS (P500,000.00).
Similarly, complainant is also entitled to be paid 13th month pay based on an
amount not lower than the amount he was receiving prior to effectivity of
(the) Agreement.
The Court of Appeals ruled that the existence of an employeremployee relationship between SONZA and ABS-CBN is a factual
question that is within the jurisdiction of the NLRC to resolve. [10]A
special civil action for certiorari extends only to issues of want or
excess of jurisdiction of the NLRC. [11] Such action cannot cover an
inquiry into the correctness of the evaluation of the evidence which
served as basis of the NLRCs conclusion. [12] The Court of Appeals
added that it could not re-examine the parties evidence and substitute
the factual findings of the NLRC with its own.[13]
The Issue
SONZA maintains that all essential elements of an employeremployee relationship are present in this case. Case law has
consistently held that the elements of an employer-employee
relationship are: (a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal; and (d) the
employers power to control the employee on the means and methods
by which the work is accomplished. [18] The last element, the socalled control test, is the most important element.[19]
that this factor favors independent contractor status because WIPR provided
the equipment necessary to tape the show. Albertys argument is
misplaced. The equipment necessary for Alberty to conduct her job as host of
Desde Mi Pueblo related to her appearance on the show. Others provided
equipment for filming and producing the show, but these were not the
primary tools that Alberty used to perform her particular function. If we
accepted this argument, independent contractors could never work on
collaborative projects because other individuals often provide the equipment
required for different aspects of the collaboration. x x x
Third, WIPR could not assign Alberty work in addition to filming Desde
Mi Pueblo. Albertys contracts with WIPR specifically provided that WIPR
hired her professional services as Hostess for the Program Desde Mi
Pueblo. There is no evidence that WIPR assigned Alberty tasks in addition to
work related to these tapings. x x x[28] (Emphasis supplied)
Applying the control test to the present case, we find that
SONZA is not an employee but an independent contractor. The
control test is the most important test our courts apply in
distinguishing an employee from an independent contractor.[29] This
test is based on the extent of control the hirer exercises over a
worker. The greater the supervision and control the hirer exercises,
the more likely the worker is deemed an employee. The converse
holds true as well the less control the hirer exercises, the more likely
the worker is considered an independent contractor.[30]
First, SONZA contends that ABS-CBN exercised control over the
means and methods of his work.
SONZAs argument is misplaced. ABS-CBN engaged SONZAs
services specifically to co-host the Mel & Jay programs. ABS-CBN did
not assign any other work to SONZA. To perform his work, SONZA
only needed his skills and talent. How SONZA delivered his lines,
appeared on television, and sounded on radio were outside ABSCBNs control. SONZA did not have to render eight hours of work per
day. The Agreement required SONZA to attend only rehearsals and
tapings of the shows, as well as pre- and post-production staff
In any event, not all rules imposed by the hiring party on the hired
party indicate that the latter is an employee of the former. [43] In this
case, SONZA failed to show that these rules controlled his
performance.
We
find
that
these
general
rules
are
merely guidelines towards the achievement of the mutually desired
result, which are top-rating television and radio programs that comply
with standards of the industry. We have ruled that:
Further, not every form of control that a party reserves to himself over the
conduct of the other party in relation to the services being rendered may be
accorded the effect of establishing an employer-employee relationship. The
facts of this case fall squarely with the case of Insular Life Assurance Co.,
Ltd. vs. NLRC. In said case, we held that:
Logically, the line should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually desired result without
dictating the means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired to the use
of such means. The first, which aim only to promote the result, create no
employer-employee relationship unlike the second, which address both the
result and the means used to achieve it.[44]
The Vaughan case also held that one could still be an
independent contractor although the hirer reserved certain supervision
to insure the attainment of the desired result. The hirer, however, must
not deprive the one hired from performing his services according to
his own initiative.[45]
only two groups under Policy Instruction No. 40 is not binding on this
Court, especially when the classification has no basis either in law or
in fact.
Affidavits of ABS-CBNs Witnesses
SONZA also faults the Labor Arbiter for admitting the affidavits of
Socorro Vidanes and Rolando Cruz without giving his counsel the
opportunity to cross-examine these witnesses. SONZA brands these
witnesses as incompetent to attest on the prevailing practice in the
radio and television industry. SONZA views the affidavits of these
witnesses as misleading and irrelevant.
The Labor Arbiter can decide a case based solely on the position
papers and the supporting documents without a formal trial. [51] The
holding of a formal hearing or trial is something that the parties cannot
demand as a matter of right.[52] If the Labor Arbiter is confident that he
can rely on the documents before him, he cannot be faulted for not
conducting a formal trial, unless under the particular circumstances of
the case, the documents alone are insufficient. The proceedings
before a Labor Arbiter are non-litigious in nature. Subject to the
requirements of due process, the technicalities of law and the rules
obtaining in the courts of law do not strictly apply in proceedings
before a Labor Arbiter.
Talents as Independent Contractors
th
RESUMPTION OF SESSION
At 7:21 p.m., the session was resumed.
THE PRESIDING OFFICER (Mr. Trenas). The session
is resumed.
Commissioner Romulo is recognized.
MR. ROMULO. Mr. Presiding Officer, I am amending
my original proposed amendment to now read as
follows: "including government-owned or controlled
corporations WITH ORIGINAL CHARTERS." The
purpose of this amendment is to indicate that
government corporations such as the GSIS and SSS,
which have original charters, fall within the ambit of the
civil service. However, corporations which are
subsidiaries of these chartered agencies such as the
Philippine Airlines, Manila Hotel and Hyatt are excluded
from the coverage of the civil service.
THE PRESIDING OFFICER (Mr.
Trenas). What does the Committee say?
MR. FOZ. Just one question, Mr.
Presiding Officer. By the term "original
charters," what exactly do we mean?
MR. ROMULO. We mean that they were
created by law, by an act of Congress,
or by special law.
spirit of our laws, present and future. Thus, all the laws
which on the great historic event when the
Commonwealth of the Philippines was born, were
susceptible of two interpretations strict or liberal,
against or in favor of social justice, now have to be
construed broadly in order to promote and achieve
social justice. This may seem novel to our friends, the
advocates of legalism but it is the only way to give life
and significance to the above-quoted principle of the
Constitution. If it was not designed to apply to these
existing laws, then it would be necessary to wait for
generations until all our codes and all our statutes shall
have been completely charred by removing every
provision inimical to social justice, before the policy of
social justice can become really effective. That would
be an absurd conclusion. It is more reasonable to hold
that this constitutional principle applies to all legislation
in force on November 15, 1935, and all laws thereafter
passed.
WHEREFORE, in view of the foregoing, the challenged decision of
the NLRC is AFFIRMED with modifications. Petitioners in G.R. No.
69870, who are the private respondents in G.R. No. 70295, are
ordered to: 1) reinstate Eugenia C. Credo to her former position at the
time of her termination, or if such reinstatement is not possible, to
place her in a substantially equivalent position, with three (3) years
backwages, from 1 December 1983, without qualification or
deduction, and without loss of seniority rights and other privileges
appertaining thereto, and 2) pay Eugenia C. Credo P5,000.00 for
moral damages and P5,000.00 for attorney's fees.
If reinstatement in any event is no longer possible because of
supervening events, petitioners in G.R. No. 69870, who are the
private respondents in G.R. No. 70295 are ordered to pay Eugenia C.
Credo, in addition to her backwages and damages as above
described, separation pay equivalent to one-half month's salary for
FIRST DIVISION
[G.R. No. 98107. August 18, 1997]
BENJAMIN C. JUCO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and NATIONAL HOUSING
CORPORATION, respondents.
DECISION
HERMOSISIMA, JR., J.:
This is a petition for certiorari to set aside the Decision of
the National Labor Relations Commission (NLRC) dated March
14, 1991, which reversed the Decision dated May 21, 1990 of
Labor Arbiter Manuel R. Caday, on the ground of lack of
jurisdiction.
SYNOPSIS
Petitioner had worked with the private respondent
Seventh Day Adventists (SDA) for 28 years before he was
terminated. Prior to said termination, petitioner was asked to
admit accountability for the church offerings collected by his
wife in the amount of P15,078.10. Petitioner refused since it
was private respondents Pastor Buhat and Eufronio Ibesate
who authorized his wife to collect. Thereafter petitioner
requested Pastor Buhat to convene the Executive Committee
to settle the dispute between him and Pastor Rodrigo, but the
latter denied the same, and heated arguments between the
two ensued until petitioner banged the attach case of Pastor
Buhat on the table, scattered the books and threw the
phone. Later, an Executive Committee meeting was held
where the non-remittance of church collections and the
events that transpired were discussed. Subsequently,
petitioner received a letter of dismissal citing therein grounds
for the termination of his services. Petitioner then filed a
complaint for illegal dismissal and a decision was rendered in
his favor. The SDA appealed the same to the NLRC and after
DECISION
[4]
KAPUNAN, J.:
as
grounds
for
the
SO ORDERED.
[13]
Petitioner filed a motion for reconsideration of the abovenamed decision. On 18 July 1995, the NLRC issued a
Resolution reversing its original decision. The dispositive
portion of the resolution reads:
WHEREFORE, premises considered, Our decision dated
August 26, 1994 is VACATED and the decision of the Labor
Arbiter dated February 15, 1993 is REINSTATED.
SO ORDERED.[14]
In view of the reversal of the original decision of the
NLRC, the SDA filed a motion for reconsideration of the above
resolution. Notable in the motion for reconsideration filed by
private respondents is their invocation, for the first time on
appeal, that the Labor Arbiter has no jurisdiction over the
complaint filed by petitioner due to the constitutional
provision on the separation of church and state since the
case allegedly involved and ecclesiastical affair to which the
State cannot interfere.
With this clear mandate, the SDA cannot hide behind the
mantle of protection of the doctrine of separation of church
and state to avoid its responsibilities as an employer under
the Labor Code.
Finally, as correctly pointed out by petitioner, private
respondents are estopped from raising the issue of lack of
jurisdiction for the first time on appeal. It is already too late
in the day for private respondents to question the jurisdiction
of the NLRC and the Labor Arbiter since the SDA had fully
participated in the trials and hearings of the case from start
to finish. The Court has already ruled that the active
participation of a party against whom the action was brought,
coupled with his failure to object to the jurisdiction of the
court or quasi-judicial body where the action is pending, is
tantamount to an invocation of that jurisdiction and a
willingness to abide by the resolution of the case and will bar
said party from later on impugning the court or bodys
jurisdiction.[25] Thus, the active participation of private
respondents in the proceedings before the Labor Arbiter and
the NLRC mooted the question on jurisdiction.
The jurisdictional question now settled, we shall now
proceed to determine whether the dismissal of petitioner was
valid.
At the outset, we note that as a general rule, findings of
fact of administrative bodies like the NLRC are binding upon
this Court. A review of such findings is justified, however, in
instances when the findings of the NLRC differ from those of
the labor arbiter, as in this case. [26] When the findings of
NLRC do not agree with those of the Labor Arbiter, this Court
must of necessity review the records to determine which
findings should be preferred as more comformable to the
evidentiary facts.[27]
and breach of trust. The Court does not find any cogent
reason, therefore, to digress from the findings of the Labor
Arbiter which is fully supported by the evidence on record.
With respect to the grounds of serious misconduct and
commission of an offense against the person of the
employers duly authorized representative, we find the same
unmeritorious and, as such, do not warrant petitioners
dismissal from the service.
Misconduct has been defined as improper or wrong
conduct. It is the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere
error in judgment.[43] For misconduct to be considered serious
it must be of such grave and aggravated character and not
merely trivial or unimportant. [44] Based on this standard, we
believe that the act of petitioner in banging the attache case
on the table, throwing the telephone and scattering the
books in the office of Pastor Buhat, although improper,
cannot be considered as grave enough to be considered as
serious misconduct. After all, as correctly observed by the
Labor Arbiter, though petitioner committed damage to
property, he did not physically assault Pastor Buhat or any
other pastor present during the incident of 16 October
1991. In fact, the alleged offense committed upon the person
of the employers representatives was never really
established or proven by private respondents. Hence, there is
no basis for the allegation that petitioners act constituted
serious misconduct or that the same was an offense against
the
person
of
the
employers
duly
authorized
representative. As such, the cited actuation of petitioner does
not justify the ultimate penalty of dismissal from
employment. While the Constitution does not condone
wrongdoing by the employee, it nevertheless urges a
moderation of the sanctions that may be applied to him in
the member of the crew of another vessel the next day, the
herein petitioners, on the other hand, were directly hired by
private respondent, through its general manager, Arsenio de
Guzman, and its operations manager, Conrado de Guzman
and have been under the employ of private respondent for a
period of 8-15 years in various capacities, except for
Laurente Bautu who was hired on August 3, 1983 as assistant
engineer. Petitioner Alipio Ruga was hired on September 29,
1974 as patron/captain of the fishing vessel; Eladio Calderon
started as a mechanic on April 16, 1968 until he was
promoted as chief engineer of the fishing vessel; Jose Parma
was employed on September 29, 1974 as assistant engineer;
Jaime Barbin started as a pilot of the motor boat until he was
transferred as a master fisherman to the fishing vessel 7/B
Sandyman II; Philip Cervantes was hired as winchman on
August 1, 1972 while Eleuterio Barbin was hired as winchman
on April 15, 1976.
While tenure or length of employment is not considered as
the test of employment, nevertheless the hiring of petitioners
to perform work which is necessary or desirable in the usual
business or trade of private respondent for a period of 8-15
years since 1968 qualify them as regular employees within
the meaning of Article 281 of the Labor Code as they were
indeed engaged to perform activities usually necessary or
desirable in the usual fishing business or occupation of
private respondent. 14
Aside from performing activities usually necessary and
desirable in the business of private respondent, it must be
noted that petitioners received compensation on a
percentage commission based on the gross sale of the fishcatch i.e. 13% of the proceeds of the sale if the total
proceeds exceeded the cost of the crude oil consumed during
the fishing trip, otherwise only 10% of the proceeds of the
sale. Such compensation falls within the scope and meaning
THIRD DIVISION
[G.R. No. 121948. October 8, 2001]
PERPETUAL
HELP
CREDIT
COOPERATIVE,
INC., petitioner, vs. BENEDICTO
FABURADA,
SISINITA
VILLAR, IMELDA TAMAYO, HAROLD CATIPAY, and the
NATIONAL LABOR RELATIONS COMMISSION, Fourth
Division, Cebu City, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
December 1988; P950 - from January to June 1989; and P1,000.00 from
July to December 1989. Duties: Among others, pick up balances for the
computation of interests on savings deposit, mortuary, dividends and
patronage funds; prepare cash vouchers; check petty cash vouchers; take
charge of the preparation of new passbooks and ledgers for new
applicants; fill up members logbook of regular depositors, junior
depositors and special accounts; take charge of loan releases every
Monday morning; assist in the posting and preparation of deposit slips;
receive deposits from members; and perform such other bookkeeping
and accounting duties as may be assigned her from time to time.
Harold D. Catipay - Clerk. Worked with the Cooperative since March
3 to December 29, 1989. Work schedule: - Monday to Friday - 8:00 to
11:30 a.m. and 2:00 to 5:30 p.m.; Saturday - 8:00 to 11:30 a.m. and 1:00
to 4:00 p.m.; and one Sunday each month - for at least three (3)
hours. Monthly salary: P900.00 - from March to June 1989; P1,050.00 from July to December 1989. Duties: Among others, Bookkeeping,
accounting and collecting duties, such as, post daily collections from the
two (2) collectors in the market; reconcile passbooks and ledgers of
members in the market; and assist the other clerks in their duties.
All of them were given a memorandum of termination on January 2,
1990, effective December 29, 1989.
We are not prepared to disregard the findings of both the Labor Arbiter
and respondent NLRC, the same being supported by substantial evidence,
that quantum of evidence required in quasi-judicial proceedings, like this
one..
Necessarily, this leads us to the issue of whether or not private
respondents are regular employees. Article 280 of the Labor Code provides
for three kinds of employees: (1) regular employees or those who have been
engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer; (2) project employees or those
whose employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season; and
(3) casual employees or those who are neither regular nor project employees.
[3]
The employees who are deemed regular are: (a) those who have been
engaged to perform activities which are usually necessary or desirable in the
usual trade or business of the employer; and (b) those casual employees who
have rendered at least one (1) year of service, whether such service is
continuous or broken, with respect to the activity in which they are
employed.[4] Undeniably, private respondents were rendering services
necessary to the day-to-day operations of petitioner PHCCI. This fact alone
qualified them as regular employees.
All of them, except Harold D. Catipay, worked with petitioner for more
than one (1) year: Benedicto Faburada, for one and a half (1 1/2) years;
Sisinita Vilar, for two (2) years; and Imelda C. Tamayo, for two (2) years and
two (2) months. That Benedicto Faburada worked only on a part-time basis,
does not mean that he is not a regular employee. Ones regularity of
employment is not determined by the number of hours one works but by the
nature and by the length of time one has been in that particular job.
[5]
Petitioner's contention that private respondents are mere volunteer
workers, not regular employees, must necessarily fail. Its invocation of San
Jose City Electric Cooperative vs. Ministry of Labor and Employment (173
SCRA 697, 703 (1989 ) is misplaced. The issue in this case is whether or not
the employees-members of a cooperative can organize themselves for
purposes of collective bargaining, not whether or not the members can be
employees. Petitioner missed the point.
As regular employees or workers, private respondents are entitled to
security of tenure. Thus, their services may be terminated only for a valid
cause, with observance of due process.
The valid causes are categorized into two groups: the just causes under
Articles 282 of the Labor Code and the authorized causes under Articles 283
and 284 of the same Code. The just causes are: (1) serious misconduct or
willful disobedience of lawful orders in connection with the employees work;
(2) gross or habitual neglect of duties; (3) fraud or willful breach of trust; (4)
commission of a crime or an offense against the person of the employer or
his immediate family member or representative; and, analogous cases. The
As aptly stated by the Solicitor General in his comment, P.D. 175 does
not provide for a grievance machinery where a dispute or claim may first be
submitted. LOI 23 refers to instructions to the Secretary of Public Works and
Communications to implement immediately the recommendation of the
Postmaster General for the dismissal of some employees of the Bureau of
Post. Obviously, this LOI has no relevance to the instant case.
Article 121 of Republic Act No. 6938 (Cooperative Code of the
Philippines) provides the procedure how cooperative disputes are to be
resolved, thus:
ART. 121. Settlement of Disputes.- Disputes among members, officers,
directors, and committee members, and intra-cooperative disputes shall, as
far as practicable, be settled amicably in accordance with the conciliation or
mediation mechanisms embodied in the bylaws of the cooperative, and in
applicable laws.
Should such a conciliation/mediation proceeding fail, the matter shall be
settled in a court of competent jurisdiction.
Complementing this Article is Section 8 of R.A. No. 6939 (Cooperative
Development Authority Law) which reads:
SEC. 8 Mediation and Conciliation.- Upon request of either or both parties,
the Authority shall mediate and conciliate disputes within a cooperative or
between cooperatives: Provided, That if no mediation or conciliation
succeeds within three (3) months from request thereof, a certificate of nonresolution shall be issued by the Commission prior to the filing of
appropriate action before the proper courts.
The above provisions apply to members, officers and directors of the
cooperative involved in disputes within a cooperative or between
cooperatives.
There is no evidence that private respondents are members of petitioner
PHCCI and even if they are, the dispute is about payment of wages, overtime
pay, rest day and termination of employment. Under Art. 217 of the Labor
Code, these disputes are within the original and exclusive jurisdiction of the
Labor Arbiter.
As illegally dismissed employees, private respondents are therefore
entitled to reinstatement without loss of seniority rights and other privileges
and to full backwages, inclusive of allowances, plus other benefits or their
monetary equivalent computed from the time their compensation was witheld
from them up to the time of their actual reinstatement. [9] Since they were
dismissed after March 21, 1989, the effectivity date of R.A. 6715 [10] they are
granted full backwages, meaning, without deducting from their backwages
the earnings derived by them elsewhere during the period of their illegal
dismissal.[11] If reinstatement is no longer feasible, as when the relationship
between petitioner and private respondents has become strained, payment of
their separation pay in lieu of reinstatement is in order.[12]
WHEREFORE, the petition is hereby DENIED. The decision of
respondent NLRC is AFFIRMED, with modification in the sense that the
backwages due private respondents shall be paid in full, computed from the
time they were illegally dismissed up to the time of the finality of this
Decision.[13]
SO ORDERED.
SECOND DIVISION
[G.R. No. 146530. January 17, 2005]
PEDRO CHAVEZ, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, SUPREME PACKAGING, INC. and ALVIN
LEE, Plant Manager, respondents.
DECISION
CALLEJO, SR., J.:
Before the Court is the petition for review on certiorari of the
Resolution[1] dated December 15, 2000 of the Court of Appeals (CA)
reversing its Decision dated April 28, 2000 in CA-G.R. SP No. 52485.
The assailed resolution reinstated the Decision dated July 10, 1998 of
the National Labor Relations Commission (NLRC), dismissing the
complaint for illegal dismissal filed by herein petitioner Pedro Chavez.
The said NLRC decision similarly reversed its earlier Decision dated
January 27, 1998 which, affirming that of the Labor Arbiter, ruled that
the petitioner had been illegally dismissed by respondents Supreme
Packaging, Inc. and Mr. Alvin Lee.
a) Backwages .. P248,400.00
b) Separation Pay .... P140,400.00
c) 13th month pay .P 10,800.00
After the parties had filed their respective pleadings, the Labor
Arbiter rendered the Decision dated February 3, 1997, finding the
respondents guilty of illegal dismissal. The Labor Arbiter declared that
the petitioner was a regular employee of the respondent company as
he was performing a service that was necessary and desirable to the
latters business. Moreover, it was noted that the petitioner had
discharged his duties as truck driver for the respondent company for a
continuous and uninterrupted period of more than ten years.
The contract of service invoked by the respondents was declared
null and void as it constituted a circumvention of the constitutional
provision affording full protection to labor and security of tenure. The
Labor Arbiter found that the petitioners dismissal was anchored on his
insistent demand to be regularized. Hence, for lack of a valid and just
cause therefor and for their failure to observe the due process
requirements, the respondents were found guilty of illegal dismissal.
The dispositive portion of the Labor Arbiters decision states:
WHEREFORE, in the light of the foregoing, judgment is hereby rendered
declaring respondent SUPREME PACKAGING, INC. and/or MR. ALVIN
LEE, Plant Manager, with business address at BEPZ, Mariveles, Bataan
guilty of illegal dismissal, ordering said respondent to pay complainant his
separation pay equivalent to one (1) month pay per year of service based on
the average monthly pay of P10,800.00 in lieu of reinstatement as his
reinstatement back to work will not do any good between the parties as the
employment relationship has already become strained and full backwages
from the time his compensation was withheld on February 23, 1995 up to
January 31, 1997 (cut-off date) until compliance, otherwise, his backwages
shall continue to run. Also to pay complainant his 13th month pay, night shift
differential pay and service incentive leave pay hereunder computed as
follows:
contractual relation, i.e., his violation of the terms and conditions of the
contract, we are very much inclined to believe complainants story that his
dismissal from the service was anchored on his insistent demand that he be
considered a regular employee. Because complainant in his right senses will
not just abandon for that reason alone his work especially so that it is only his
job where he depends chiefly his existence and support for his family if he
was not aggrieved by the respondent when he was told that his services as
driver will be terminated on February 23, 1995.[28]
Thus, the lack of a valid and just cause in terminating the services
of the petitioner renders his dismissal illegal. Under Article 279 of the
Labor Code, an employee who is unjustly dismissed is entitled to
reinstatement, without loss of seniority rights and other privileges, and
to the payment of full backwages, inclusive of allowances, and other
benefits or their monetary equivalent, computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.[29] However, as found by the Labor Arbiter, the
circumstances obtaining in this case do not warrant the petitioners
reinstatement. A more equitable disposition, as held by the Labor
Arbiter, would be an award of separation pay equivalent to one month
for every year of service from the time of his illegal dismissal up to the
finality of this judgment in addition to his full backwages, allowances
and other benefits.
WHEREFORE, the instant petition is GRANTED. The Resolution
dated December 15, 2000 of the Court of Appeals reversing its
Decision dated April 28, 2000 in CA-G.R. SP No. 52485 is
REVERSED and SET ASIDE. The Decision dated February 3, 1997 of
the Labor Arbiter in NLRC Case No. RAB-III-02-6181-5, finding the
respondents guilty of illegally terminating the employment of petitioner
Pedro Chavez, is REINSTATED.
SO ORDERED.
NCR
CA
No.
032766-02
which
affirmed
with
Petitioner,
Present:
- versus -
1996,
Manager. The
petitioner
corporation
was
also
designated
hired
Gerry
Acting
Nino
as
cashier but she was advised that the company was not
earning well.[10]
company
in
all
dealings
with
government
agencies,
[7]
[8]
Acedo,
the
designated
Treasurer,
companys employees.[12]
Petitioners
designation
as
technical
b. Salary
Differentials
(01/2001
09/2001) 22,500.00
c. Housing
Allowance
(01/2001
07/2002) 57,000.00
d. Midyear Bonus 2001 27,500.00
e. 13th Month Pay 27,500.00
f. 10% share in the profits of Kasei
Corp. from 1996-2001 361,175.00
g. Moral and exemplary damages 100,000.00
h. 10% Attorneys fees 87,076.50
P957,742.50
If reinstatement is no longer feasible,
respondents are ordered to pay complainant
separation pay with additional backwages that
would accrue up to actual payment of
separation pay.
consultant
private
respondents
submitted
list
of
employees for the years 1999 and 2000 duly received by the
BIR showing that petitioner was not among the employees
reported to the BIR, as well as a list of payees subject to
expanded withholding tax which included petitioner. SSS
records were also submitted showing that petitioners latest
employer was Seiji Corporation.[13]
SO ORDERED.[14]
The Labor Arbiter found that petitioner was illegally
On April 15, 2003, the NLRC affirmed with modification the
dismissed, thus:
WHEREFORE, premises considered, judgment is
hereby rendered as follows:
1. finding
complainant
respondent corporation;
an
employee
of
4) The
awards
representing
salary
differentials, housing allowance, mid year bonus
and 13th month pay are AFFIRMED.
by substantial evidence.[17]
SO ORDERED.[15]
of
an
employer-employee
relation. Generally,
thus:
right to control not only the end to be achieved but also the
WHEREFORE, the instant petition is hereby GRANTED.
constructive dismissal.
SO ORDERED.[16]
The
appellate
court
denied
petitioners
motion
for
there
was
petitioner
an
employer-employee
and
private
relationship
respondent
Kasei
of
the
employment
relations
help
provide
This
two-tiered
test
would
provide
us
with
Court of Appeals,[20] where we held that there is an employeremployee relationship when the person for whom the
services are performed reserves the right to control not only
the end achieved but also the manner and means used to
achieve that end.
In Sevilla v. Court of Appeals,[21] we observed the need to consider
the existing economic conditions prevailing between the parties, in addition
to the standard of right-of-control like the inclusion of the employee in the
payrolls, to give a clearer picture in determining the existence of an
employer-employee relationship based on an analysis of the totality of
economic circumstances of the worker.
by
the
employer;
(4)
the
workers
exercised
States,
the
touchstone
of
economic
reality
in
Federal
Labor
Standards
Act
is
dependency. [25] By
Corporate
Secretary,
with
substantially
the
same
job
[28]
firm that issues it. Together with the cash vouchers covering
before
her
dismissal,
receiving
check
vouchers
likewise
ruled
in Flores
v.
Nuestro[29] that
2000.
[26]
evinces
the
existence
of
an
employer-employee
employer-employee relationship.
Furthermore, the affidavit of Seiji Kamura dated
December 5, 2001 has clearly established that petitioner
never acted as Corporate Secretary and that her designation
as such was only for convenience. The actual nature of
petitioners job was as Kamuras direct assistant with the duty
of acting as Liaison Officer in representing the company to
secure construction permits, license to operate and other
requirements imposed by government agencies. Petitioner
where
the
petitioner
is
entitled
to
full
truth and would make solemn trials a mockery and place the
investigation of the truth at the mercy of unscrupulous
witnesses.[32] A recantation does not necessarily cancel an
earlier declaration, but like any other testimony the same is
subject to the test of credibility and should be received with
caution.[33]
to
when
continued
employment
becomes
her severance from the company was not of her own making
and
employment.
therefore
amounted
to
an
illegal
termination
of
accorded
to
them
by
law,
in
line
with
the
Petitioners,
- versus
ROBERTO C. SERVAA,
Respondent.
x----------------------------------------------------------------------------x
DECISION
TINGA, J.:
This petition for review under Rule 45 assails the 21 December
2004 Decision[1] and 8 April 2005 Resolution[2] of the Court of Appeals
declaring Roberto Servaa (respondent) a regular employee of petitioner
Television and Production Exponents, Inc. (TAPE). The appellate court
likewise ordered TAPE to pay nominal damages for its failure to observe
authorized cause.
had served as a security guard for TAPE from March 1987 until he was
benefits against TAPE. He alleged that he was first connected with Agro-
SO ORDERED.
SECOND DIVISION
TELEVISION AND PRODUCTION G.R. No. 167648
EXPONENTS, INC. and/or ANTONIO
P. TUVIERA, Present:
Respondent for his part insisted that he was a regular employee having been
made the following assertions: (1) that respondent was initially employed as
a security guard for Radio Philippines Network (RPN-9); (2) that he was
order in the studio, as necessary and desirable in the usual business activity
tasked to assist TAPE during its live productions, specifically, to control the
of TAPE. The Labor Arbiter also ruled that the termination was valid on the
crowd; (3) that when RPN-9 severed its relationship with the security agency,
TAPE engaged respondents services, as part of the support group and thus a
pay equivalent to one (1)-month pay for every year of service. The
talent, to provide security service to production staff, stars and guests of Eat
Decision dated 22 April 2002 reversed the Labor Arbiter and considered
respondent a mere program employee, thus:
We have scoured the records of this case and we find
nothing to support the Labor Arbiters conclusion that
complainant was a regular employee.
xxxx
The primary standard to determine regularity of employment
is the reasonable connection between the particular activity
performed by the employee in relation to the usual business
or trade of the employer. This connection can be determined
by considering the nature and work performed and its
relation to the scheme of the particular business or trade in
its entirety. x x x Respondent company is engaged in the
xxxx
SO ORDERED.[12]
Complainant was indubitably a program employee of
respondent company. Unlike [a] regular employee, he did
not observe working hours x x x. He worked for other
companies, such as M-Zet TV Production, Inc. at the same
time that he was working for respondent company. The
foregoing indubitably shows that complainant-appellee was
a program employee. Otherwise, he would have two (2)
employers at the same time.[9]
On 27 September 2006, the Court gave due course to the petition and
considered the case submitted for decision. [14]
At the outset, it bears emphasis that the existence of employer-employee
relationship is ultimately a question of fact. Generally, only questions of law
are entertained in appeals by certiorari to the Supreme Court. This rule,
however, is not absolute. Among the several recognized exceptions is when
the findings of the Court of Appeals and Labor Arbiters, on one hand, and
that of the NLRC, on the other, are conflicting, [15] as obtaining in the case at
bar.
mainly identify the holder thereof as a bona fide employee of the firm who
issues it.
[22]
to perform the job, work or service on its own account and under its own
responsibility according to its own manner and method, and free from the
control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof. [25] TAPE failed to
of Appeals:
guard for said company. Notably, the said certificate categorically stated that
to be an independent contractor.
working hours such that on some days they work for less
than eight (8) hours and on other days beyond the normal
work hours observed by station employees and are allowed
to enter into employment contracts with other persons,
stations, advertising agencies or sponsoring companies. The
engagement of program employees, including those hired by
advertising or sponsoring companies, shall be under a
written contract specifying, among other things, the nature
of the work to be performed, rates of pay and the programs
in which they will work. The contract shall be duly
registered by the station with the Broadcast Media Council
within three (3) days from its consummation.[27]
xxxx
Under recent jurisprudence, the Supreme Court
fixed the amount of P30,000.00 as nominal damages. The
basis of the violation of petitioners right to statutory due
process by the private respondents warrants the payment of
indemnity in the form of nominal damages. The amount of
such damages is addressed to the sound discretion of the
court, taking into account the relevant circumstances. We
believe this form of damages would serve to deter employer
from future violations of the statutory due process rights of
the employees. At the very least, it provides a vindication or
recognition of this fundamental right granted to the latter
under the Labor Code and its Implementing
Rules. Considering the circumstances in the case at bench,
we deem it proper to fix it at P10,000.00.[30]
xxxx
We uphold the finding of the Labor Arbiter that
complainant [herein petitioner] was terminated upon [the]
managements option to professionalize the security services
in its operations. x x xHowever, [we] find that although
petitioners services [sic] was for an authorized cause, i.e.,
redundancy, private respondents failed to prove that it
complied with service of written notice to the Department of
Labor and Employment at least one month prior to
the intended date of retrenchment. It bears stressing that
although notice was served upon petitioner through a
Memorandum dated 2 March 2000, the effectivity of his
dismissal is fifteen days from the start of the agencys take
over which was on 3 March 2000. Petitioners services with
private respondents were severed less than the month
requirement by the law.
Under prevailing jurisprudence the termination for
an authorized cause requires payment of separation
pay. Procedurally, if the dismissal is based on authorized
causes under Articles 283 and 284, the employer must give
the employee and the Deparment of Labor and Employment
written notice 30 days prior to the effectivity of his
separation. Where the dismissal is for an authorized cause
but due process was not observed, the dismissal should be
upheld. While the procedural infirmity cannot be cured, it
should not invalidate the dismissal. However, the employer
should be liable for non-compliance with procedural
requirements of due process.
GARCIA, J.:
In this petition for review under Rule 45 of the Rules of Court,
petitioner San Miguel Corporation (SMC) seeks the reversal and setting aside
of the Decision[1] dated September 30, 1999 of the Court of Appeals (CA)
in CA-G.R. SP No. 50321, as reiterated in its Resolution[2] of March 20, 2001,
affirming in toto an earlier decision of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 005478-93, entitled Rafael C.
Maliksi v. San Miguel Corporation and/or Philippine Software Services &
Education Center. The affirmed NLRC decision overturned that of the Labor
Arbiter and declared the herein private respondent Rafael Maliksi (Maliksi) a
regular employee of the petitioner and ordered the latter to reinstate him with
benefits.
As found by the NLRC and subsequently adopted by the CA, the
facts are as follows:
SECOND DIVISION
SAN MIGUEL CORPORATION,
Petitioner,
- versus Promulgated:
NATIONAL
LABOR
RELATIONS December 6, 2006
COMMISSION and RAFAEL MALIKSI,
Respondents.
x------------------------------------------------------------------------------------x
DECISION
entities, are deemed to have been entered into in violation of labor laws.
26, 1998, the NLRC reversed that of the Labor Arbiter by declaring Maliksi
a regular employee of the petitioner and ordering the latter to reinstate him
regular after the statutory period of one year of service through these entities.
Decision dated September 30, 1999, affirmed in toto that of the NLRC. In
so doing, the CA found SMC to have utilized PHILSSEC, Lipercon Services,
Inc. (Lipercon) and Skillpower, Inc. (Skillpower) as conduits to circumvent
Article 280 of the Labor Code, employing Maliksi as contractual or project
employee through these entities, thereby undermining his right to gain
regular employment status under the law. The appellate court echoed the
NLRCs assessment that Maliksis work was necessary or desirable in the
business of SMC in its Magnolia Division, for more than the required oneyear period. It affirmed the NLRCs finding that the three (3) conduit entities
adverted to, Lipercon and Skillpower, are labor-only contractors such that
I
The Court of Appeals gravely erred in declaring
private respondent a regular employee of petitioner SMC
despite its findings that PHILSSEC, the contractor that
employed private respondent, is an independent job
contractor.
Corollarily, the declaration of the Honorable Court
of Appeals that private respondent is a regular employee of
petitioner SMC proceeds from the erroneous premise that
private respondent was already a regular employee of SMC
when he was hired by the independent contractor
PHILSSEC. Having been placed in petitioner SMC by a
supposed labor-only contractor, for just five months and for
a different job, three years after his last assignment therein,
private respondent had not thereby become a regular
employee of petitioner SMC.
II
The Court of Appeals gravely erred in ultimately
resolving the case upon the principle that all doubts must be
III
having served SMC for an aggregate period of more than three (3) years
We DENY.
SMC concedes that Maliksi, before his employment with
PHILSSEC, worked in SMC from November 1988 to April 1990, but as
employee of Skillpower[7] and that he was previously assigned to
SMC between 1981 up to February 1985, for periods spread apart.[8] The
Labor Arbiter found, as earlier stated, that Maliksi rendered service with
Liperconfrom 1 April 1981 to February 1982 as budget head assigned to
SMC-Beer Division; from July 1983 to April 1985 with Skillpower as
accounting clerk assigned to SMC-Magnolia Division, then from October
1988 to 1989[9] also with Skillpower as acting clerk assigned to SMCMagnolia Finance, and from October 1989 to 31 October 1990 with
PHILSSEC assigned to Magnolia Finance as accounting clerk. In all, it
appears that, while under the employ of either Lipercon or Skillpower,
Maliksi has undisputedly rendered service with SMC for at least three years
and seven months.[10]
The Court takes judicial notice of the fact that Lipercon and
Skillpower were declared to be labor-only contractors, [11] providing as they
products better, or monitor its sales and collection with efficiency. Without
With respect to PHILSSEC, there was no need for Maliksi to be
employed under the formers computerization program to be considered a
the data gatherer or encoder, no analysis could occur. SMC would then, for
the most part, be kept in the dark.
regular employee of SMC at the time. Moreover, SMC itself admits that
Maliksis work under the computerization program did not require the
need to resolve the present case under the principle that all doubts should be
developed by PHILSSEC.
[16]
resolved in favor of the workingman. The perceived doubt does not obtain in
the first place.
Maliksi was fresh out of his employment with SMC (through Skillpower) as
continuous bid to circumvent labor laws. The act of hiring and re-hiring
1989).
evidences bad faith on the part of the employer.[17] Where, from the
circumstances, it is apparent that periods have been imposed to preclude the
Maliksis
mainly
These were:
customs or public order.[18] In point of law, any person who willfully causes
a.
b.
c.
d.
e.
work
under
the
PHILSSEC
project
was
Simply put, the data gathered by SMC on a daily basis through Maliksis
work would be submitted for analysis and evaluation, thereby allowing SMC
to make the necessary business decisions that would enable it to market its
to enroll them for entitlement to social security and other benefits; give them
bad faith, it should be held liable to pay damages for causing undue injury
rehiring scheme.
labor practices and the like. In those instances, the poor employees, finding
the shell or dummy company to be without assets, often end up confused and
without recourse as to whom to run after. They sue the mother company
decision
dated
September
30,
1999
is AFFIRMED,
with
[20]
addition to the other monetary awards, separation pay for the period from
October 31, 1990 when he was dismissed until he shall have been actually
other specific business interests, such that after the specific SMC business or
paid at the rate of one (1) month salary for every year of his employment,
with a fraction of at least six (6) months being considered as one (1) year, or
operations.
the workers right to be secure in his (or her) proprietary right to regular
respondent the amount of P50,000.00 as nominal damages for its bad faith in
employment and his right to a secure employment, viz, one that is free from
juggling the latter from one labor contractor to another and causing him
fear and doubt, that anytime he could be removed, retrenched, his contract
unnecessary injury and inconvenience, and for denying him his proprietary
not renewed or he might not be re-hired. The ramifications may seem trivial,
but we cannot allow the ordinary Filipino workers right to tenurial security to
be put in jeopardy by recurrent but abhorrent practices that threaten the very
lives of those that depend on him.
DECISION
QUISUMBING, J.:
This
SO ORDERED.
is
an
appeal
to
reverse
and
set
aside
both
the
[1]
Decision dated August 29, 2003 of the Court of Appeals and its
Resolution[2] dated March 15, 2004 in CA-G.R. SP No. 69639. The appellate
court had reversed the decision [3] dated December 29, 2000 of the Secretary
of Labor and Employment which ordered the holding of a certification
election among the rank-and-file promo employees of respondent
Burlingame Corporation.
The facts are undisputed.
On January 17, 2000, the petitioner Lakas sa Industriya ng
Kapatirang Haligi ng Alyansa-Pinagbuklod ng Manggagawang Promo
ng Burlingame (LIKHA-PMPB) filed a petition for certification election
before the Department of Labor and Employment (DOLE). LIKHA-PMPB
sought to represent all rank-and-file promo employees of respondent
numbering about 70 in all. The petitioner claimed that there was no existing
union in the aforementioned establishment representing the regular rank-andfile promo employees. It prayed that it be voluntarily recognized by the
SECOND DIVISION
LAKAS SA INDUSTRIYA NG KAPATIRANG G.R. No. 162833
HALIGI NG ALYANSA-PINAGBUKLOD NG
MANGGAGAWANG
PROMO
NGBURLINGAME,
Petitioner,
Promulgated:
The resolution of this issue boils down to a determination of the true status of
[5]
contractor.
statutory criteria:
19,
2002 of
the
Secretary
of
Labor
and
Employment.
Respondent then filed a complaint with the Court of Appeals, which
then reversed[8] the decision of the Secretary. The petitioner then filed a
motion for reconsideration,[9] which the Court of Appeals denied[10] on March
15, 2004.
According to Section 5 of DOLE Department Order No. 18-02,
Hence the instant petition for review on certiorari.
The issue raised in the petition is:
WHETHER THE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR IN DECLARING
THAT THERE IS NO EMPLOYER-EMPLOYEE
RELATIONSHIP BETWEEN PETITIONERS MEMBERS
AND BURLINGAME BECAUSE F. GARIL MANPOWER
SERVICES IS AN INDEPENDENT CONTRACTOR.[11]
Series of 2002:[16]
Section
5. Prohibition
against
labor-only
contracting. Labor-only contracting is hereby declared
prohibited. For this purpose, labor-only contracting shall
refer to an arrangement where the contractor or
subcontractor merely recruits, supplies or places workers to
perform a job, work or service for a principal, and any of the
following elements are [is] present:
i)
ii)
The four-fold test will show that respondent is the employer of petitioners
members. The elements to determine the existence of an employment relationship
are: (a) the selection and engagement of the employee; (b) the payment of wages;
(c) the power of dismissal; and (d) the employers power to control the employees
conduct. The most important element is the employers control of the employees
conduct, not only as to the result of the work to be done, but also as to the means
Given the above criteria, we agree with the Secretary that F. Garil is
not an independent contractor.
First, F. Garil does not have substantial capitalization or investment
in the form of tools, equipment, machineries, work premises, and other
materials, to qualify as an independent contractor. No proof was adduced to
show F. Garils capitalization.
Second, the work of the promo-girls was directly related to the
principal business or operation of Burlingame. Marketing and selling of
products is an essential activity to the main business of the principal.
Lastly, F. Garil did not carry on an independent business or undertake
the performance of its service contract according to its own manner and
method, free from the control and supervision of its principal, Burlingame.
only with respect to the recruitment aspect, i.e. the screening, testing and pre-
These are indications that F. Garil was not left alone in the supervision
and control of its alleged employees. Consequently, it can be concluded that F.
The contract states that Burlingame would pay the workers through
F. Garil, stipulating that Burlingame shall pay F. Garil a certain sum per
worker on the basis of eight-hour work every 15 th and 30th of each calendar
month. This evinces the fact that F. Garil merely served as conduit in the
payment of wages to the deployed personnel. The interpretation would have
been different if the payment was for the job, project, or services rendered
during the month and not on a per worker basis. In Vinoya v. National Labor
Relations Commission,[19] we held:
Garil was not an independent contractor since it did not carry a distinct
not be contrary to law, morals, good customs, public order or public policy. A
On March 9, 2010, this Court rendered a Decision[1] holding: (a) that Promm-Gem,
employees had been directly employed by the principal employer. [21] Since F.
are considered employees of Procter & Gamble Phils., Inc. (P&G); (c) that PrommGem is guilty of illegal dismissal; (d) that SAPS/P&G is likewise guilty of illegal
dismissal; (e) that petitioners are entitled to reinstatement; and (f) that the dismissed
dated August 29, 2003 and the Resolution dated March 15, 2004 denying the
employees of SAPS/P&G are entitled to moral damages and attorneys fees there
FIRST DIVISION
JOEB M. ALIVIADO,
et. al., Petitioners,
Clarification, Motion to Refer the Case to the Supreme Court En Banc with Second
Motion for Reconsideration and Motion for Clarification, Motion for Leave to
Admit the Attached Supplement to the Motion to Refer the Case to the Supreme
Court En Banc with Second Motion for Reconsideration and Motion for
Clarification as well as its Supplement to the Motion to Refer the Case to the
SO ORDERED.
[2]
Supreme Court En Banc with Second Motion for Reconsideration and Motion for
Clarification, be resolved as they were filed before it received notice of the entry of
[3]
[4]
judgment.
[5]
filed
a Motion
for
Partial
In our Resolution[15] dated January 17, 2011, we resolved to note the aforesaid
pleadings and at the same time to require the petitioners to file their comment
thereto. We reiterated our directive for petitioners to file their comment via our
On June 16, 2010, we denied the Motion for Reconsideration of P&G as well as the
Resolution[16] dated February 28, 2011. On March 16, 2011, petitioners filed a Very
Urgent Manifestation[17] in lieu of their comment. In gist, they reminded this Court of
the Entry of Judgment made on July 27, 2010 and argued that the motions filed by
[9]
Before any of the parties received the notice of Entry of Judgment, P&G filed on
August 9, 2010 a Motion for Leave to File Motion to Refer the Case to the Supreme
Court En Banc with Second Motion for Reconsideration and Motion for
Issuance of Entry
Judgment was Proper.
of
Clarification[10] and a Motion to Refer the Case to the Supreme Court En Banc with
Second Motion for Reconsideration and Motion for Clarification.[11]On October 4,
We stress that the issuance of the Entry of Judgment on July 27, 2010 was proper
2010, P&G filed a Motion for Leave to Admit the Attached Supplement to the
because it was made after receipt by P&G of a copy of the Resolution denying its
Motion to Refer the Case to the Supreme Court En Banc with Second Motion for
motion for reconsideration. Section 1, Rule 15 of the Internal Rules of the Supreme
[12]
Motion to Refer the Case to the Supreme Court En Banc with Second Motion for
Reconsideration and Motion for Clarification.[13]
Thereafter, or on November 8, 2010, P&G filed a Manifestation and
Motion[14] praying that its Motion for Leave to File Motion to Refer the Case to the
Supreme Court En Banc with Second Motion for Reconsideration and Motion for
It is immaterial that the Entry of Judgment was made without the Court having first
resolved P&Gs second motion for reconsideration. This is because the issuance of
The March 9, 2010 Decision had already attained finality. It could no longer be set
the entry of judgment is reckoned from the time the parties received a copy of the
aside or modified.
resolution denying the first motion for reconsideration. The filing by P&G of several
pleadings after receipt of the resolution denying its first motion for reconsideration
does not in any way bar the finality or entry of judgment. Besides, to reckon the
finality of a judgment from receipt of the denial of the second motion for
reconsideration would be absurd. First, the Rules of Court and the Internal Rules of
the
Supreme
Court
prohibit
the
filing
of
second
motion
for
for
a
Section 2, Rule 52 of the Rules of Court explicitly provides that [n]o motion for
reconsideration of a judgment or final resolution by the same party shall be
entertained. Moreover, Section 3, Rule 15 of the Internal Rules of the Supreme
Court[23] decrees viz:
SEC. 3. Second motion for reconsideration. - The Court shall not
entertain a second motion for reconsideration and any exception to
this rule can only be granted in the higher interest of justice by the
Court en banc upon a vote of at least two-thirds of its actual
membership. There is reconsideration 'in the highest interest of
justice' when the assailed decision is not only legally erroneous but
is likewise patently unjust and potentially capable of causing
unwarranted and irremediable injury or damage to the parties. A
second motion for reconsideration can only be entertained before
the ruling sought to be reconsidered becomes final by
operation of law or by the Court's declaration.
In the Division, a vote of three Members shall be required to
elevate a second motion for reconsideration to the Court En Banc.
[24]
ruling sought to be reconsidered has already become final per Entry of Judgment
made on July 27, 2010.
The foregoing notwithstanding, we will proceed to discuss the issues raised by P&G
not because they are of transcendental importance or that P&G proffered
extraordinarily persuasive reasons[25]but only to dispel any doubt that it is being
There is no basis for P&G's claim that the Court erred in not applying the four-fold
test, particularly the control test in determining whether SAPS is a legitimate
independent contractor or a labor-only contractor. As discussed in our March 9, 2010
Decision, the applicable rules are Article 106 of the Labor Code and Rule VIII-A,
Book III of the Omnibus Rules Implementing the Labor Code, as amended by
Department Order No. 18-02.[26]
Therefore, the control test is merely one of the factors to consider. This is clearly
deduced from the above-provision which states that labor-only contracting exists
when any of the two elements is present. In our March 9, 2010 Decision, it was
established that SAPS has no substantial capitalization and it was performing
merchandising and promotional activities which are directly related to P&G's
business. Since SAPS met one of the requirements, it was enough basis for us to
hold that it is a labor-only contractor. Consequently, its principal, P&G, is considered
the employer of its employees. This is pursuant to our ruling in Aklan v. San Miguel
Corporation[27] where we held that [a] finding that a contractor is a laboronly contractor, as opposed to permissible job contracting, is equivalent to
declaring that there is an employer-employee relationship between the
principal and the employees of the supposed contractor, and the labor-only
contractor is considered as a mere agent of the principal, the real employer.
Corollarily, we also decreed in Coca-Cola Bottlers Phils., Inc. v.
Agito
[28]
that:
On the same vein, Rule VIII-A, Book III of the Omnibus Rules Implementing the
Labor Code, as amended by Department Order No. 18-02, pertinently provides:
Section 5. Prohibition against labor-only contracting. Labor only
contracting is hereby declared prohibited. For this purpose, labor-
The records also show that Promm-Gem supplied its complainantworkers with the relevant materials, such as markers, tapes, liners
and cutters, necessary for them to perform their work. PrommGem also issued uniforms to them. It is also relevant to mention
that Promm-Gem already considered the complainants working
under it as its regular, not merely contractual or project,
employees. This circumstance negates the existence of element (ii)
as stated in Section 5 of DOLE Department Order No. 18-02,
which speaks of contractual employees. This, furthermore,
negates on the part of Promm-Gem bad faith and intent to
circumvent labor laws which factors have often been tipping
points that lead the Court to strike down the employment practice
or agreement concerned as contrary to public policy, morals, good
customs or public order.
Under the circumstances, Promm-Gem cannot be considered as a
labor-only contractor. We find that it is a legitimate independent
contractor.
On the other hand, the Articles of Incorporation of SAPS
shows that it has a paid-in capital of only P31,250. There is no
other evidence presented to show how much its working
capital and assets are.Furthermore, there is no showing of
substantial investment in tools, equipment or other assets.
In Vinoya v. National Labor Relations Commission, the Court held
that [w]ith the current economic atmosphere in the country, the
paid-in capitalization of PMCI amounting to P75,000.00 cannot be
considered as substantial capital and, as such, PMCI cannot qualify
as an independent contractor. Applying the same rationale to the
present case, it is clear that SAPS having a paid-in capital of
only P31,250 has no substantial capital. SAPS' lack of
substantial capital is underlined by the records which show
that its payroll for its merchandisers alone for one month
would already total P44,561.00. It has 6-month contracts with
P&G. Yet SAPS failed to show that it could complete the 6month contracts using its own capital and investment. Its
capital is not even sufficient for one month's payroll. SAPS
failed to show that its paid-in capital of P31,250.00 is sufficient
for the period required for it to generate [the] needed revenue
to sustain its operations independently. Substantial capital
refers to capitalization used in the performance or
there was any bad faith in the dismissal of the petitioners, it could only be attributed
to SAPS and not to P&G. [34] It asserts that it acted in good faith in dealing with
SAPS.
The contentions are untenable. It must be emphasized that in labor-only
P&G insists that to be entitled to moral damages, it must be proven that the act of
dismissal was attended by bad faith or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy.[31] Our March 9, 2010
Decision complied with this requirement when we ruled in this wise:
We now go to the issue of whether petitioners are entitled to
damages. Moral and exemplary damages are recoverable where
the dismissal of an employee was attended by bad faith or fraud or
constituted an act oppressive to labor or was done in a manner
contrary to moral, good customs or public policy.
With regard to the employees of Promm-Gem, there being no
evidence of bad faith, fraud or any oppressive act on the part of the
latter, we find no support for the award of damages.
As for P&G, the records show that it dismissed its employees
through SAPS in a manner oppressive to labor. The sudden
and peremptory barring of concerned petitioners from work,
and from admission to the work place, after just a one-day
verbal notice, and for no valid cause bellows oppression and
utter disregard of the right to the due process of the concerned
petitioners. Hence, an award of moral damages is called for.
Attorney's fees may likewise be awarded to the concerned
petitioners who were illegally dismissed in bad faith and were
compelled to litigate or incur expenses to protect their rights by
reason of the oppressive acts of P&G.[32]
P&G claims that 10 out of the 50 employees of SAPS have never been assigned to
P&G; thus, they should not be declared employees of P&G.[36] In particular, P&G
asserts that Rosedy Yordan, Dennis Dacasin, Allan Baltazar, Philip Loza, Emil
Tawat, Cresente Garcia, Romeo Vasquez, Renato dela Cruz, Romeo Viernes, Jr. and
Elias Basco, were never assigned to it.
It would appear that this issue was raised for the first time in P&G's second motion
for reconsideration. It will be noted that in petitioners' Petition for Review
Nevertheless, P&G insists that there is no evidence to prove that it dismissed the
petitioners, much less that it was done in an oppressive manner.[33] It claims that if
Viernes, Jr.[46] and Elias Basco[47] were employees of P&G through its own agents
and salesmen. However, this was never rebutted by P&G. In fact, in its
Comment[48] P&G even alleged that it was amply shown throughout the course of
Even after the rendition of our March 9, 2010 Decision where we ordered the
reinstatement of the petitioners, P&G still failed to raise the non-feasibility of the
same. In its Motion for Reconsideration,[52] P&G only tersely stated that there is no
performance, and oversaw their actual day-to-day work in the areas where they had
basis for petitioners' reinstatement or payment of backwages because they are not its
been engaged to promote the products of respondent P&G.[49] This alone belies the
employees. It is only now that it is raising the issue that no similar or equivalent
claim that these 10 petitioners were never assigned by SAPS to P&G. Moreover, this
position exists in its plantilla and that there is existing antagonism between the
issue has not been raised in P&G's Memorandum; consequently it is now considered
parties.[53] It is likewise in its second motion for reconsideration and in its supplement
thereto that P&G is raising the issue that reinstatement is no longer feasible because
parties that [n]o new issues may be raised by a party in his/its memorandum and the
of the length of time that has passed from the date of their dismissal to the final
issues raised in his/its pleadings but not included in the memorandum shall be
resolution of the case.[54] P&G failed to raise this matter in its first motion for
reconsideration. It was only after the Decision became final and executory that it
the Court may consider the memoranda alone in deciding or resolving this petition.
brought this issue to the attention of the Court. For the orderly administration of
justice, the rules of court provide for only one motion for reconsideration so errors
committed by the Court may be brought to its attention and the Court be given a
reinstated because its existing plantilla does not have positions for them; that there is
chance to timely correct its mistake. It wreaks havoc on the administration of justice
a climate of antagonism pervading between the parties; and because of the prolonged
period of time that has passed between the dismissals and the resolution of the case.
and with no time limit. Even P&G concedes to this principle when it stated in its
We note that petitioners had been consistently praying for reinstatement as shown in
their Memorandum filed before the Labor Arbiter, Memorandum of Appeal filed
allow fresh issues on appeal is violative of the rudiments of fair play, justice and due
before the National Labor Relations Commission, Motion for Reconsideration filed
process.[56]
before the Court of Appeals, and their Petition for Review on Certiorari and
Well-settled is the rule that issues or grounds not raised below cannot be resolved on
review by the Supreme Court, for to allow the parties to raise new issues is
before this Court, it merely confined its discussion to the fact that it was allegedly not
antithetical to the sporting idea of fair play, justice and due process. Issues not raised
the employer of the herein petitioners and proceeded to argue that there being no
during the trial cannot be raised for the first time on appeal and more especially on
motion for reconsideration. Litigation must end at some point; once the case is
[51]
are
finally adjudged, the parties must learn to accept victory or defeat. [57] Finally, we
wish to reiterate our discussion above that a second motion for reconsideration is a
prohibited pleading and that the instant Decision had already attained finality hence
it is already immutable.
Every case must end at some some point. Every Decision becomes final
and executory at some point. In the present case, the Entry of Judgment states that
the Decision became final and executory on July 27, 2010.
ACCORDINGLY, premises
considered,
we DENY with FINALITY respondent Procter & Gamble Phils., Inc.'s Motion to
Refer the Case to the Supreme Court En Banc with Second Motion for
Reconsideration and Motion for Clarification and its Supplement to the Motion to
Refer the Case to the Supreme Court En Banc with Second Motion for
Reconsideration and Motion for Clarification considering that the assailed March 9,
2010 Decision has already attained finality in view of the Entry of Judgment made
on July 27, 2010. No further pleadings shall be entertained.
SO ORDERED.
SYNOPSIS
Private respondent Ramon Canonicato was hired as a janitor by the
Bacolod Janitorial Services (BJS). He was assigned at the Coca Cola
Bottlers, Inc. considering his familiarity with its premises, having been
previous casual employee there. On July 23, 1993, respondent filed with the
Labor Arbiter a complaint for illegal dismissal and underpayment of wages.
He included BJS therein as a co-respondent. The Labor Arbiter dismissed
the complaint and ruled that there was employer-employee relationship
between Canonicato and Coca Cola. The NLRC rejected the decision of the
Labor Arbiter on the ground that the janitorial services of Canonicato were
found to be necessary in the usual trade of Coca Cola. Its motion for
reconsideration having been denied, Coca Cola filed this petition. Petition
granted. Although janitorial services may be considered directly related to the
principal business of an employer, the Court deemed them unnecessary in the
conduct of the employers principal business. This judicial notice however
employment with COCA COLA and the subsequent denial by the latter
of an employer-employee relationship with the applicant. It was error
therefore for the NLRC to apply Art. 280 of the Labor Code in
determining the existence of an employment relationship of the parties
herein, especially in light of our explicit holding in Singer Sewing
Machine Company v. Drilon that x x x [t]he definition that regular
employees are those who perform activities which are desirable and
necessary for business of the employer is not determative in this case.
Any agreement may provide that one party shall render services for and
in behalf of another for a consideration ( no matter how necessary for
the latters business ) even without being hired as an employee. This is
precisely true in the case of an independent contractorship as well as in
an agency agreement. The Court agrees with the petitioners argument
that Article 280 is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two
kinds of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benefits, to
join or form a union, or to security of tenure. Article 280 does not apply
where the existence of an employment relationship is in dispute.
3.
when it sees fit. Since BJS is the one who engages their services, then it
only follows that it also has the power to dismiss them when justified
under the circumstances. Lastly, BJS has the power to control the
conduct of the janitors. x x x.
4. ID.; ID.; POWER OF CONTROL; UNAVAILING IN CASE AT
BAR. The power of the employer to control the work of the employee is
said to be the most significant determinant. Canonicato disputed this
power of BJS over him by asserting that his employment with COCA
COLA was not interrupted by his application with BJS since his duties
before and after he applied for regularization were the same, involving
as they did, working in the maintenance department and doing painting
tasks within its facilities. Canonicato cited the Labor Utilization
Reports of COCA COLA showing his painting assignments. These
reports, however, are not expressive of the true nature of the relationship
between Canonicato and COCA COLA; neither do they detract from the
fact that BJS exercised real authority over Canonicato as its employee.
5.
SECOND DIVISION
[G.R. No. 120466. May 17, 1999]
COCA COLA BOTTLERS PHILS., INC., petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION and RAMON B.
CANONICATO, respondents.
DECISION
BELLOSILLO, J.:
This petition for certiorari under Rule 65 of the Revised Rules of Court
assails the 3 January 1995 decision [1] of the National Labor Relations
Commission (NLRC) holding that private respondent Ramon B. Canonicato
is a regular employee of petitioner Coca Cola Bottlers Phils. Inc. (COCA
COLA) entitled to reinstatement and back wages. The NLRC reversed the
decision of the Labor Arbiter of 28 April 1994 [2] which declared that no
employer-employee relationship existed between COCA COLA and
Canonicato thereby foreclosing entitlement to reinstatement and back wages.
On 7 April 1986 COCA COLA entered into a contract of janitorial
services with Bacolod Janitorial Services (BJS) stipulating [3] among others That the First Party (COCA COLA) desires to engage the services of the
Second Party (BJS), as an Independent Contractor, to perform and provide
for the maintenance, sanitation and cleaning services for the areas
hereinbelow mentioned, all located within the aforesaid building of the First
Party x x x x
commodes, urinals and washbasins, water spots on chrome and other fixtures
to be checked; 3) Cleaning of glass surfaces, windows and glass partitions
that require daily attention; 4) Cleaning and dusting of horizontal and vertical
surfaces; 5) Cleaning of fixtures, counters, panels and sills; 6) Clean, pick-up
cigarette butts from sandburns and ashtrays and trash receptacles; 7) Trash
and rubbish disposal and burning.
In addition, the Second Party will also do the following once a week, to wit:
1) Cleaning, waxing and polishing of lobbies and offices; 2) Washing of
windows, glasses that require cleaning; 3) Thorough disinfecting and
cleaning of toilets and washrooms.
3. The Second Party shall supply the necessary utensils, equipment and
supervision, and it shall only employ the services of fifteen (15) honest,
reliable, carefully screened, cooperative and trained personnel, who are in
good faith, in the performance of its herein undertaking x x x x
4. The Second Party hereby guarantees against unsatisfactory
workmanship. Minor repair of comfort rooms are free of charge provided the
First Party will supply the necessary materials for such repairs at its
expense.As may be necessary, the Second Party shall also report on such
part or areas of the premises covered by this contract which may require
repairs from time to time x x x (italics supplied).
Every year thereafter a service contract was entered into between the
parties under similar terms and conditions until about May 1994. [4]
1. The scope of work of the Second Party includes all floors, walls, doors,
vertical and horizontal areas, ceiling, all windows, glass surfaces, partitions,
furniture, fixtures and other interiors within the aforestated covered areas.
2. Except holidays which are rest days, the Second Party will undertake daily
the following: 1) Sweeping, damp-mopping, spot scrubbing and polishing of
floors; 2) Cleaning, sanitizing and disinfecting agents to be used on
The NLRC rejected on appeal the decision of the Labor Arbiter on the
ground that the janitorial services of Canonicato were found to be necessary
or desirable in the usual business or trade of COCA COLA. The NLRC
accepted Canonicato's proposition that his work with the BJS was the same
as what he did while still a casual employee of COCA COLA. In so holding
the NLRC applied Art. 280 of the Labor Code and declared that Canonicato
was a regular employee of COCA COLA and entitled to reinstatement and
payment of P18,105.10 in back wages.[15]
BJS paid the wages of private respondent, as evidenced by the fact that on
July 15, 1993, private respondent sent his sister to BJS with a note
authorizing her to receive his pay.
Lastly, BJS has the power to control the conduct of the janitors. The
supervisors of petitioner, being interested in the result of the work of the
janitors, also gives suggestions as to the performance of the janitors, but this
does not mean that BJS has no control over them. The interest of petitioner is
only with respect to the result of their work. On the other hand, BJS oversees
the totality of their performance.
Power of dismissal is also exercised by BJS and not petitioner. BJS is the one
that assigns the janitors to its clients and transfers them when it sees fit. Since
BJS is the one who engages their services, then it only follows that it also has
the power to dismiss them when justified under the circumstances.
The power of the employer to control the work of the employee is said
to be the most the most significant determinant. Canonicato disputed this
power of BJS over him by asserting that his employment with COCA COLA
was not interrupted by his application with BJS since his duties before and
after he applied for regularization were the same, involving as they did,
working in the maintenance department and doing painting tasks within its
facilities. Canonicato cited the Labor Utilization Reports of COCA COLA
showing his painting assignments. These reports, however, are not expressive
of the true nature of the relationship between Canonicato and COCA COLA;
neither do they detract from the fact that BJS exercised real authority over
Canonicato as its employee.
Moreover, a closer scrutiny of the reports reveals that the painting jobs
were performed by Canonicato sporadically, either in a few days within a
month and only for a few months in a year.[23] This infrequency or irregularity
of assignments countervails Canonicatos submission that he was assigned
specifically to undertake the task of painting the whole year round. If
anything, it hews closely to the assertion of BJS that it assigned Canonicato
to these jobs to maintain and sanitize the premises of petitioner COCA
COLA pursuant to its contract of services with the company.[24]
It is clear from these established circumstances that NLRC should have
recognized BJS as the employer of Canonicato and not COCA COLA. This is
demanded by the fact that it did not disturb, and therefore it upheld, the
finding of the Labor Arbiter that BJS was truly a legitimate job-contractor
and could by itself hire its own employees. The Commission could not have
reached any other legitimate conclusion considering that BJS satisfied all the
requirements of a job-contractor under the law, namely, (a) the ability to
carry on an independent business and undertake the contract work on its own
account under its own responsibility according to its manner and method,
free from the control and direction of its principal or client in all matters
connected with the performance of the work except as to the results thereof;
and, (b) the substantial capital or investment in the form of tools, equipment,
machinery, work premises, and other materials which are necessary in the
conduct of its business.[25]
It is to be noted that COCA COLA is not the only client of BJS which
has its roster of clients like San Miguel Corporation, Distileria Bago
Incorporated, University of Negros Occidental-Recolletos, University of St.
La Salle, Riverside College, College Assurance Plan Phil., Inc., and Negros
Consolidated Farmers Association, Inc.[26] This is proof enough that BJS has
the capability to carry on its business of janitorial services with big
establishments aside from petitioner and has sufficient capital or materials
necessary therefor.[27] All told, there being no employer-employee
FIRST DIVISION
[G.R. No. 158255. July 8, 2004]
MANILA WATER COMPANY, INC., petitioner, vs. HERMINIO D.
PENA, et. al., respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition assails the decision[1] of the Court of Appeals
dated November 29, 2002, in CA-G.R. SP No. 67134, which reversed
the decision of the National Labor Relations Commission and
reinstated the decision of the Labor Arbiter with modification.
Petitioner Manila Water Company, Inc. is one of the two private
concessionaires contracted by the Metropolitan Waterworks and
Sewerage System (MWSS) to manage the water distribution system
in the East Zone of Metro Manila, pursuant to Republic Act No. 8041,
otherwise known as the National Water Crisis Act of 1995. Under the
Concession Agreement, petitioner undertook to absorb former
employees of the MWSS whose names and positions were in the list
furnished by the latter, while the employment of those not in the list
was terminated on the day petitioner took over the operation of the
East Zone, which was on August 1, 1997. Private respondents, being
contractual collectors of the MWSS, were among the 121 employees
not included in the list; nevertheless, petitioner engaged their services
without written contract from August 1, 1997 to August 31,
TOTAL P222,500.00
Respondent [petitioner herein] is further directed to pay ten (10%) percent of
the total award as attorneys fee or the sum of P22,250.00.
SO ORDERED.[5]
Both parties appealed to the NLRC, which reversed the decision
of the Labor Arbiter and ruled that the documentary
evidence, e.g., letters
and
memoranda
by
the
petitioner
to ACGI regarding the poor performance of the collectors, did not
constitute proof of control since these documents merely identified the
erring collectors; the appropriate disciplinary actions were left to the
corporation to impose.[6] Further, there was no evidence showing that
the incorporation of ACGI was irregular.
Private respondents filed a petition for certiorari with the Court of
Appeals, contending that the NLRC acted with grave abuse of
discretion amounting to lack or excess of jurisdiction when it reversed
the decision of the Labor Arbiter.
The Court of Appeals reversed the decision of the NLRC and
reinstated with modification the decision of the Labor Arbiter. [7] It held
that petitioner deliberately prevented the creation of an employment
relationship with the private respondents; and that ACGI was not an
independent contractor. It likewise denied petitioners motion for
reconsideration.[8]
Hence, this petition for review raising the following errors:
THE HONORABLE COURT OF APPEALS IN RENDERING THE
ASSAILED DECISION AND RESOLUTION COMMITTED GRAVE
REVERSIBLE ERRORS:
A. IN GOING BEYOND ITS JURISDICTION AND
PROCEEDING
TO
GIVE
DUE
COURSE
TO
RESPONDENTS PETITION FOR CERTIORARI UNDER
RULE
65
OF
THE
RULES
OF
COURT,
NOTWITHSTANDING THE ABSENCE OF ANY PROOF
OF GRAVE ABUSE OF DISCRETION ON THE PART OF
THE NATIONAL LABOR RELATIONS COMMISSION
WHEN IT RENDERED THE DECISION ASSAILED BY
HEREIN RESPONDENTS.
B. WHEN IT MANIFESTLY OVERLOOKED THE EVIDENCE
PRESENTED BY THE PETITIONER COMPANY AND
RULING THAT THE PETITIONERS DEFENSE OF LACK
OF EMPLOYER-EMPLOYEE RELATIONS IS WITHOUT
MERIT.
C. IN CONCLUDING THAT PETITIONER COMPANY
REQUIRED RESPONDENTS TO INCORPORATE THE
ASSOCIATED COLLECTORS GROUP, INC. [ACGI]
NOTWITHSTANDING ABSENCE OF ANY SPECIFIC
EVIDENCE IN SUPPORT OF THE SAME.
D. IN FINDING PETITIONER COMPANY GUILTY OF BAD
FAITH NOTWITHSTANDING ABSENCE OF ANY
SPECIFIC EVIDENCE IN SUPPORT OF THE SAME,
AND AWARDING MORAL AND EXEMPLARY DAMAGES
TO HEREIN RESPONDENTS.[9]
The pivotal issue to be resolved in this petition is whether or not
there exists an employer-employee relationship between petitioner
and private respondents. Corollary thereto is the issue of whether or
not private respondents were illegally dismissed by petitioner.
The issue of whether or not an employer-employee relationship
exists in a given case is essentially a question of fact. [10] As a rule, the
Supreme Court is not a trier of facts, and this applies with greater
force in labor cases. Hence, factual findings of quasi-judicial bodies
like the NLRC, particularly when they coincide with those of the Labor
Arbiter and if supported by substantial evidence, are accorded respect
and even finality by this Court.[11] However, a disharmony between the
factual findings of the Labor Arbiter and the National Labor Relations
Commission opens the door to a review thereof by this Court. Factual
findings of administrative agencies are not infallible and will be set
aside when they fail the test of arbitrariness. Moreover, when the
findings of the National Labor Relations Commission contradict with
those of the labor arbiter, this Court, in the exercise of its equity
jurisdiction, may look into the records of the case and reexamine the
questioned findings.[12]
The resolution of the foregoing issues initially boils down to a
determination of the true status of ACGI, i.e., whether it is an
independent contractor or a labor-only contractor.
Petitioner asserts that ACGI, a duly organized corporation
primarily engaged in collection services, is an independent contractor
which entered into a service contract for the collection of petitioners
accounts starting November 30, 1997 until the early part of February
1999. Thus, it has no employment relationship with private
respondents, being employees of ACGI.
The existence of an employment relationship between petitioner
and private respondents cannot be negated by simply alleging that the
latter are employees of ACGI as an independent contractor, it being
crucial that ACGIs status, whether as labor-only contractor or
independent contractor, be measured in terms of and determined by
the criteria set by statute.
The case of De los Santos v. NLRC[13] succinctly enunciates this
statutory criteria
Job contracting is permissible only if the following conditions are met: 1) the
contractor carries on an independent business and undertakes the contract
work on his own account under his own responsibility according to his own
manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work except as
to the results thereof; and 2) the contractor has substantial capital or
in Brent School, Inc. v. Zamora, 181 SCRA 702. The individual contracts in
question were prepared by MWC in the form of the letter addressed to
complainants. The letter-contract is dated September 1, 1997, when
complainants were already working for MWC as collectors. With their
employment as their means of survival, there was no room then for
complainants to disagree with the presented letter-contracts. Their choice
then was not to negotiate for the terms of the contract but to lose or not to
lose their employment employment which they already had at that time. The
choice is obvious, as what they did, to sign the ready made letter-contract to
retain their employment, and survive. It is a defiance of the teaching in Brent
School, Inc. v. Zamora if this Office rules that the individual contracts in
question are valid, so, in deference to Brent School ruling, this Office rules
they are null and void.[23]
In view of the foregoing, we hold that an employment relationship
exists between petitioner and private respondents. We now proceed
to ascertain whether private respondents were dismissed in
accordance with law.
As private respondents employer, petitioner has the burden of
proving that the dismissal was for a cause allowed under the law and
that they were afforded procedural due process.[24] Petitioner failed to
discharge this burden by substantial evidence as it maintained the
defense that it was not the employer of private respondents. Having
established that the schemes employed by petitioner were devious
attempts to defeat the tenurial rights of private respondents and that it
failed to comply with the requirements of termination under the Labor
Code, the dismissal of the private respondent is tainted with illegality.
Under Article 279 of the Labor Code, an employee who is unjustly
dismissed from work is entitled to reinstatement without loss of
seniority rights and other privileges, and to his full backwages,
inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement. However, if
reinstatement is no longer possible, the employer has the alternative
of paying the employee his separation pay in lieu of reinstatement.[25]
A. Messengerial/Janitorial
B. Shrimp Harvesting/Receiving
C. Sanitation/Washing/Cold Storage[2]
subject to the control and direction of the company only as to the result to be
accomplished by the work or services herein specified, and not as to the work
herein contracted. The cooperative and its members recognize that it is taking
a business risk in accepting a fixed service fee to provide the services
contracted for and its realization of profit or loss from its undertaking, in
relation to all its other undertakings, will depend on how efficiently it
deploys and fields its members and how they perform the work and manage
its operations.
5. The cooperative shall, whenever possible, maintain and keep under its
control the premises where the work under this contract shall be performed.
12. Unless sooner terminated for the reasons stated in paragraph 9 this
contract shall be for a period of one (1) year commencing on January 1,
1993. Thereafter, this Contract will be deemed renewed on a month-to-month
basis until terminated by either party by sending a written notice to the other
at least thirty (30) days prior to the intended date of termination.
xxx
xxx
8. The cooperative undertakes to pay the wages or salaries of its memberworkers, as well as all benefits, premiums and protection in accordance with
the provisions of the labor code, cooperative code and other applicable laws
and decrees and the rules and regulations promulgated by competent
authorities, assuming all responsibility therefor.
The cooperative further undertakes to submit to the company within the first
ten (10) days of every month, a statement made, signed and sworn to by its
Justifying its reversal of the findings of the labor arbiter and the
NLRC, the appellate court reasoned:
Although the terms of the non-exclusive contract of service between SMC
and [Sunflower] showed a clear intent to abstain from establishing an
employer-employee relationship between SMC and [Sunflower] or the latters
members, the extent to which the parties successfully realized this intent in
the light of the applicable law is the controlling factor in determining the real
and actual relationship between or among the parties.
xxx
With respect to the power to control petitioners conduct, it appears
that petitioners were under the direct control and supervision of SMC
supervisors both as to the manner they performed their functions and as to
the end results thereof. It was only after petitioners lodged a complaint to
have their status declared as regular employees of SMC that certain members
of [Sunflower] began to countersign petitioners daily time records to make it
appear that they (petitioners) were under the control and supervision of
[Sunflower] team leaders (rollo, pp. 523-527). xxx
Even without these instances indicative of control by SMC over the
petitioners, it is safe to assume that SMC would never have allowed the
petitioners to work within its premises, using its own facilities, equipment
and tools, alongside SMC employees discharging similar or identical
activities unless it exercised a substantial degree of control and supervision
over the petitioners not only as to the manner they performed their functions
but also as to the end results of such functions.
xxx
xxx it becomes apparent that [Sunflower] and the petitioners do not qualify
as independent contractors. [Sunflower] and the petitioners did not have
substantial capital or investment in the form of tools, equipment, implements,
work premises, et cetera necessary to actually perform the service under their
own account, responsibility, and method. The only work premises maintained
by [Sunflower] was a small office within the confines of a small carinderia or
refreshment parlor owned by the mother of its chair, Roy Asong; the only
equipment it owned was a typewriter (rollo, pp. 525-525) and, the only assets
it provided SMC were the bare bodies of its members, the petitioners
herein (rollo, p. 523).
In addition, as shown earlier, petitioners, who worked inside the premises of
SMC, were under the control and supervision of SMC both as to
the manner and method in discharging their functions and as to
theresults thereof.
Besides, it should be taken into account that the activities undertaken by the
petitioners as cleaners, janitors, messengers and shrimp harvesters, packers
and handlers were directly related to the aquaculture business of
SMC (See Guarin vs. NLRC, 198 SCRA 267, 273). This is confirmed by
the renewal of the service contract from January 1993 to September 1995, a
period of close to three (3) years.
Moreover, the petitioners here numbering ninety seven (97), by itself, is a
considerable workforce and raises the suspicion that the non-exclusive
service contract between SMC and [Sunflower] was designed to evade the
obligations inherent in an employer-employee relationship (See RhonePoulenc Agrochemicals Philippines, Inc. vs. NLRC, 217 SCRA 249, 259).
Equally suspicious is the fact that the notary public who signed the bylaws of [Sunflower] and its [Sunflower] retained counsel are both
partners of the local counsel of SMC (rollo, p. 9).
xxx
There being a finding of labor-only contracting, liability must be shouldered
either by SMC or [Sunflower] or shared by both (See Tabas vs. California
Manufacturing, Inc., supra, p. 502). SMC however should be
held solely liable for [Sunflower] became non-existent with the closure of
the aquaculture business of SMC.
Furthermore, since the closure of the aquaculture operations of SMC appears
to be valid, reinstatement is no longer feasible. Consistent with the
pronouncement in Bustamante, et al., vs. NLRC, G.R. No. 111651, 28
November 1996, petitioners are thus entitled to separation pay (in the
computation similar to those given to regular SMC employees at its Bacolod
Shrimp Processing Plant) with full backwages, inclusive of allowances and
other benefits or their monetary equivalent, from the time their actual
compensation was withheld from them up to the time of the finality of this
decision. This is without prejudice to differentials pays (sic) effective as of
and from the time petitioners acquired regular employment status pursuant to
the discussion mentioned above, and all such other and further benefits as
provided by applicable collective bargaining agreement(s) or other relations,
or by law, beginning such time up to their termination from employment on
11 September 1995.[16] (Emphasis and underscoring supplied)
SMCs Motion for Reconsideration[17] having been denied for lack
of merit by Resolution of July 11, 2001, it comes before this Court via
the present petition for review on certiorari assigning to the CA the
following errors:
xxx
I
With these observations, no other logical conclusion can be reached except
that [Sunflower] acted as an agent of SMC, facilitating the manpower
requirements of the latter, the real employer of the petitioners. We simply
cannot allow these two entities through the convenience of a non-exclusive
service contract to stipulate on the existence of employer-employee relation.
Such existence is a question of law which cannot be made the subject of
agreement to the detriment of the petitioners (Tabas vs. California
Manufacturing, Inc., 169 SCRA 497, 500).
process, the technicalities of law and procedure and the rules obtaining in the
courts of law shall not strictly apply thereto. The Labor Arbiter may avail
himself of all reasonable means to ascertain the facts of the controversy
speedily, including ocular inspection and examination of well-informed
persons. (underscoring supplied)
As regards private respondents Joint-Affidavit which is being
assailed in view of the failure of some complainants to affix their
signatures thereon, this Court quotes with approval the appellate
courts ratiocinations:
A perusal of the Southern Cotabato Development Case would reveal that
movant did not quote the whole text of paragraph 5 on page 865 of 280
SCRA. The whole paragraph reads:
Clearly then, as to those who opted to move for the dismissal of their
complaints, or did not submit their affidavits nor appear during trial and in
whose favor no other independent evidence was adduced, no award for back
wages could have been validly and properly made for want of factual
basis. There is no showing at all that any of the affidavits of the thirty-four
(34) complainants were offered as evidence for those who did not submit
their affidavits, or that such affidavits had any bearing at all on the rights and
interest of the latter. In the same vein, private respondents position paper was
not of any help to these delinquent complainants.
The implication is that as long as the affidavits of the complainants were
offered as evidence for those who did not submit theirs, or the affidavits
were material and relevant to the rights and interest of the latter, such
affidavits may be sufficient to establish the claims of those who did not
give their affidavits.
Here, a reading of the joint affidavit signed by twelve (12) of the ninetyseven (97) complainants (petitioners herein) would readily reveal that the
affidavit was offered as evidence not only for the signatories therein but for
all of the complainants. (These ninety-seven (97) individuals were previously
identified during the mandatory conference as the only complainants in the
proceedings before the labor arbiter) Moreover, the affidavit touched on the
In legitimate labor contracting, the law creates an employeremployee relationship for a limited purpose, i.e., to ensure that the
employees are paid their wages. The principal employer becomes
jointly and severally liable with the job contractor, only for the payment
of the employees wages whenever the contractor fails to pay the
same. Other than that, the principal employer is not responsible for
any claim made by the employees.[50]
In labor-only contracting, the statute creates an employeremployee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. The contractor is considered merely an
agent of the principal employer and the latter is responsible to the
employees of the labor-only contractor as if such employees had been
directly employed by the principal employer.[51]
The Contract of Services between SMC and Sunflower shows
that the parties clearly disavowed the existence of an employeremployee relationship between SMC and private respondents.The
language of a contract is not, however, determinative of the parties
relationship; rather it is the totality of the facts and surrounding
circumstances of the case.[52] A party cannot dictate, by the mere
expedient of a unilateral declaration in a contract, the character of its
business, i.e., whether as labor-only contractor or job contractor, it
being crucial that its character be measured in terms of and
determined by the criteria set by statute.[53]
SMC argues that Sunflower could not have been issued a
certificate of registration as a cooperative if it had no substantial
capital.[54]
While indeed Sunflower was issued Certificate of Registration No.
IL0-875[55] on February 10, 1992 by the Cooperative Development
Authority, this merely shows that it had at least P2,000.00 in paid-up
share capital as mandated by Section 5 of Article 14 [56] of Republic Act
No. 6938, otherwise known as the Cooperative Code, which amount
cannot be considered substantial capitalization.
And from the job description provided by SMC itself, the work
assigned to private respondents was directly related to the
aquaculture operations of SMC. Undoubtedly, the nature of the work
performed by private respondents in shrimp harvesting, receiving and
packing formed an integral part of the shrimp processing operations of
SMC. As for janitorial and messengerial services, that they are
considered directly related to the principal business of the
employer[58] has been jurisprudentially recognized.
Furthermore, Sunflower did not carry on an independent business
or undertake the performance of its service contract according to its
own manner and method, free from the control and supervision of its
principal, SMC, its apparent role having been merely to recruit
persons to work for SMC.
Thus, it is gathered from the evidence adduced by private
respondents before the labor arbiter that their daily time records
were signed by SMC supervisors Ike Puentebella, Joemel Haro,
Joemari Raca, Erwin Tumonong, Edison Arguello, and Stephen
Palabrica, which fact shows that SMC exercised the power of control
and supervision over its employees.[59] And control of the premises in
which private respondents worked was by SMC. These tend to
disprove the independence of the contractor.[60]
More. Private respondents had been working in the aqua
processing plant inside the SMC compound alongside regular SMC
shrimp processing workers performing identical jobs under the same
SMC supervisors.[61] This circumstance is another indicium of the
existence of a labor-only contractorship.[62]
And as private respondents alleged in their Joint Affidavit which
did not escape the observation of the CA, no showing to the contrary
having been proffered by SMC, Sunflower did not cater to clients
other than SMC,[63] and with the closure of SMCs Bacolod Shrimp
Processing Plant, Sunflower likewise ceased to exist. This Courts
ruling in San Miguel Corporation v. MAERC Integrated Services, Inc.
[64]
is thus instructive.
employer; and (2) those who have rendered at least one year of
service, whether continuous or broken, with respect to the activity in
which they are employed.[69]
As for those of private respondents who were engaged in
janitorial and messengerial tasks, they fall under the second category
and are thus entitled to differential pay and benefits extended to other
SMC regular employees from the day immediately following their first
year of service.[70]
Regarding the closure of SMCs aquaculture operations and the
consequent termination of private respondents, Article 283 of the
Labor Code provides:
ART. 283. Closure of establishment and reduction of personnel. The
employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the
Department of Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to the installation of labor
saving devices or redundancy, the worker affected thereby shall be entitled to
a separation pay equivalent to at least his one (1) month pay or to at least one
(1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of
operations of establishment or undertaking not due to serious business losses
or financial reverses, the separation pay shall be equivalent to one (1) month
pay or to at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered
one (1) whole year. (Underscoring supplied)
In the case at bar, a particular department under the SMC group
of companies was closed allegedly due to serious business reverses.
This constitutes retrenchment by, and not closure of, the enterprise or
the company itself as SMC has not totally ceased operations but is
still very much an on-going and highly viable business concern.[71]
THIRD DIVISION
EPARWA SECURITY AND JANITORIAL
SERVICES, INC.,
Petitioner,
- versus -
Promulgated:
November 28, 2006
x-------------------------------------------------- x
Eparwa allocated the contracted amount of P5,000 per security guard per
month in the following manner:
DECISION
Basic Pay (P104.50 x 391.5/12)
Night Diff. Pay
13th mo. Pay
5 day incentive leave
Uniform allowance
Employers SSS, Medicare, ECC contribution
Agency share
VAT
CONTRACT RATE
(rounded off to P5,000.00)[5]
CARPIO, J.:
The Case
This is a petition for certiorari[1] of the Decision[2] dated 20 April 2001 and
the Resolution dated 21 September 2001 of the Court of Appeals (appellate
court) in CA-G.R. SP No. 59120, Liceo de Cagayan University v. The Hon.
P3,409
113
284
43
50
224
420
454
P5,000
On 21
December
1998,
11
security
guards
(security
guards)
1999 decision of the Labor Arbiter and remanded the case to the Regional
(NLRC)
The Facts
Regional
Arbitration
Branch
No.
10
99, the complaint was filed against both Eparwa and LDCU for
underpayment of salary, legal holiday pay, 13th month pay, rest day, service
incentive leave, night shift differential, overtime pay, and payment for
entered into a Contract for Security Services. The pertinent portion of the
attorneys fees.
LDCU made a cross-claim and prayed that Eparwa should reimburse LDCU
2.
3.
4.
5.
6.
rest
day
work. The
pursuant
Labor
to
Arbiter
Article
109
the
Labor
Ordering
respondents
[LDCU]
and
[Eparwa] solidarily liable to pay [the security
guards] for underpayment, holiday and rest day, as
follows:
Name
So Ordered.[6]
Amount
LDCU filed an appeal before the NLRC. LDCU agreed with the Labor
P 46,819.95
Arbiters decision on the security guards entitlement to salary differential but
46,819.95
challenged the propriety of the amount of the award. LDCU alleged that
46,819.95
security guards not similarly situated were granted uniform monetary awards
46,819.95
and that the decision did not include the basis of the computation of the
37,918.95
amount of the award.
20,321.10
1.
Casiero
Jovencio
2.
Villarino
Leonardo
3.
Lumbab
Adriano
4.
Caballero
Gregorio, Jr.
5.
Cajilla
Delfin, Jr.
6.
Paduanga
Arnold
7.
Dungog
Achimedes
8.
Magallanes
Eduardo
9.
Dungog
Luigi
10.
Dungog
Telford
46,819.95
Eparwa also
filed
an
appeal
before
the
NLRC. For
its
46,819.95
part, Eparwa questioned its liability for the security guards claims and the
46,819.95
awarded cross-claim amounts.
46,819.95
11.
Bahian
Wilfredo
30,741.30
P 463,540.95
The Fifth Division of the NLRC resolved Eparwa and LDCUs separate
appeals in its Resolution[7] dated 19 January 2000. The NLRC found that the
reimburse Eparwa for whatever amount it may pay to the security guards.
security guards are entitled to wage differentials and premium for holiday
and
NLRC
although Eparwa and LDCU are solidarily liable to the security guards for
held Eparwa and LDCU solidarily liable for the wage differentials and
the monetary award, LDCU alone is ultimately liable. The NLRC resolved
premium for holiday and rest day work, the NLRC did not require Eparwa to
rest
day
work. Although
the
reimburse LDCU for its payments to the security guards. The NLRC also
ordered the recomputation of the monetary awards according to the dates
actually worked by each security guard. The dispositive portion of the NLRC
Resolution reads thus:
WHEREFORE, the
appealed
decision
is AFFIRMED, subject to the modification that the portions
thereof directing respondent EPARWA Security Agency and
Janitorial
Services,
Inc.
to
reimburse
respondent Liceo de Cagayan University
for
whatever
amount the latter may have paid complainants and to pay
respondent Liceo de Cagayan University the sum [sic]
[of] P20,000.00 and P5,000.00, representing moral and
exemplary damages, respectively, of each complainants [sic],
are deleted for lack of legal basis. Further the monetary
awards for wage differential and premiums for holiday and
rest day works shall be recomputed by the Regional
Arbitration Branch of origin at the execution stage of the
proceedings.
Co[n]formably, the award of Attorneys fee[s] is equivalent to
ten (10%) percent of the aggregate monetary award as finally
adjusted.
SO ORDERED.[8]
Eparwa and LDCU again filed separate motions for partial reconsideration of
the 19
January
2000 NLRC
Resolution. LDCU
of LDCUs entitlement
to
questioned
reimbursement
court
also
allowed
LDCU
to
claim
reimbursement
SO ORDERED.[11]
Eparwa filed a motion for reconsideration of the appellate courts
decision. Eparwa stressed that jurisprudence is consistent in ruling that the
ultimate liability for the payment of the monetary award rests with LDCU
alone.
The appellate court denied Eparwas motion for reconsideration for lack of
merit.
Hence, this petition.
The Issue
The petition raises this sole legal issue: Is LDCU alone ultimately liable to
the security guards for the wage differentials and premium for holiday and
rest day pay?
The Ruling of the Court
The petition has merit.
Eparwa and LDCUs Solidary Liability and
LDCUs Ultimate Liability
Articles 106, 107 and 109 of the Labor Code read:
Art. 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person for the
performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
This Courts ruling in Eagle Security Agency, Inc. v. NLRC[12] squarely applies
to the present case. In Eagle, we ruled that:
This joint and several liability of the contractor and the
principal is mandated by the Labor Code to assure
compliance of the provisions therein including the statutory
minimum wage [Article 99, Labor Code]. The contractor is
made liable by virtue of his status as direct employer. The
principal, on the other hand, is made the indirect employer of
the contractors employees for purposes of paying the
employees their wages should the contractor be unable to
pay them. This joint and several liability facilitates, if not
guarantees, payment of the workers performance of any
work, task, job or project, thus giving the workers ample
protection as mandated by the 1987 Constitution [See Article
II Sec. 18 and Article XIII Sec. 3].
In the case at bar, it is beyond dispute that the security
guards are the employees of EAGLE [See Article VII Sec. 2
of the Contract for Security Services; G.R. No. 81447, Rollo,
p. 34]. That they were assigned to guard the premises of
PTSI pursuant to the latters contract with EAGLE and that
neither of these two entities paid their wage and allowance
increases under the subject wage orders are also admitted
[See Labor Arbiters Decision, p. 2; G.R. No. 81447, Rollo,
p. 75]. Thus, the application of the aforecited provisions of
the Labor Code on joint and several liability of the principal
and contractor is appropriate [See Del Rosario & Sons
Logging Enterprises, Inc. v. NLRC, G.R. No. 64204, May
31, 1985, 136 SCRA 669].
The solidary liability of PTSI and EAGLE, however, does
not preclude the right of reimbursement from his co-debtor
by the one who paid [See Article 1217, Civil Code]. It is
with respect to this right of reimbursement that petitioners
can find support in the aforecited contractual stipulation and
Wage Order provision.
The Wage Orders are explicit that payment of the increases
are to be borne by the principal or client. To be borne,
however, does not mean that the principal, PTSI in this case,
would directly pay the security guards the wage and
allowance increases because there is no privity of contract
between them. The security guards contractual relationship is
with their immediate employer, EAGLE. As an employer,
EAGLE is tasked, among others, with the payment of their
wages [See Article VII Sec. 3 of the Contract for Security
Services, supra and Bautista v. Inciong, G.R. No. 52824,
March 16, 1988, 158 SCRA 665].
On the other hand, there existed a contractual agreement
between PTSI and EAGLE wherein the former availed of the
security services provided by the latter. In return, the security
agency collects from its client payment for its security
services. This payment covers the wages for the security
guards and also expenses for their supervision and training,
the guards bonds, firearms with ammunitions, uniforms and
other equipments, accessories, tools, materials and supplies
necessary for the maintenance of a security force.
Premises considered, the security guards immediate
recourse for the payment of the increases is with their
direct employer, EAGLE. However, in order for the
security agency to comply with the new wage and allowance
rates it has to pay the security guards, the Wage Orders made
specific provision to amend existing contracts for security
services by allowing the adjustment of the consideration paid
by the principal to the security agency concerned. What the
Wage Orders require, therefore, is the amendment of the
contract as to the consideration to cover the service
contractors payment of the increases mandated. In the end,
therefore, ultimate liability for the payment of the increases
rests with the principal.
In view of the foregoing, the security guards should claim
the amount of the increases from EAGLE. Under the Labor
Code, in case the agency fails to pay them the amounts
claimed, PTSI should be held solidarily liable with EAGLE
[Articles 106,107 and 109]. Should EAGLE pay, it can claim
an adjustment from PTSI for an increase in consideration to
cover the increases payable to the security guards.
guards, may collect from anyone of the solidary debtors. Solidary liability
does not mean that, as between themselves, two solidary debtors are liable
for only half of the payment.
LDCUs ultimate liability comes into play because of the expiration of the
Contract for Security Services. There is no privity of contract between the
security guards and LDCU, butLDCUs liability to the security guards
remains because of Articles 106, 107 and 109 of the Labor Code. Eparwa is
already precluded from asking LDCU for an adjustment in the contract price
because of the expiration of the contract, but Eparwas liability to the security
guards remains because of their employer-employee relationship. In lieu of
LDCU for any payment it may make to the security guards. However, LDCU
[14]
[16]
[15]
Appeals.[18]
cannot claim any reimbursement from Eparwafor any payment it may make
to the security guards.
WHEREFORE, we GRANT the petition. We SET ASIDE the Decision
dated 20 April 2001 and the Resolution dated 21 September 2001 of the
Court of Appeals. We REINSTATEthe Resolutions dated 19 January
For the security guards, the actual source of the payment of their wage
differentials and premium for holiday and rest day work does not matter as
long
as
they
are
paid. This
is
the
import
SO ORDERED.