Beruflich Dokumente
Kultur Dokumente
]
ROYAL PLANT WORKERS UNION, petitioner, vs. COCA-COLA
BOTTLERS PHILIPPINES, INC.-CEBU PLANT, respondent.
DECISION
MENDOZA, J :
p
Assailed in this petition is the May 24, 2011 Decision 1 and the September 2,
2011
Resolution 2 of
the
Court
of
Appeals (CA) in
CA-G.R.
SP
No.
Factual
and
Procedural
Antecedents
The factual and procedural antecedents have been accurately recited in the May
24, 2011 CA decision as follows:
Petitioner Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic
corporation engaged in the manufacture, sale and distribution of
softdrink products. It has several bottling plants all over the country, one
of which is located in Cebu City. Under the employ of each bottling plant
are bottling operators. In the case of the plant in Cebu City, there are 20
bottling operators who work for its Bottling Line 1 while there are 12-14
bottling operators who man its Bottling Line 2. All of them are male and
they are members of herein respondent Royal Plant Workers Union
(ROPWU).
The bottling operators work in two shifts. The first shift is from 8 a.m. to 5
p.m. and the second shift is from 5 p.m. up to the time production
operations is finished. Thus, the second shift varies and may end beyond
eight (8) hours. However, the bottling operators are compensated with
overtime pay if the shift extends beyond eight (8) hours. For Bottling Line
1, 10 bottling operators work for each shift while 6 to 7 bottling operators
work for each shift for Bottling Line 2.
Each shift has rotations of work time and break time. Prior to September
2008, the rotation is this: after two and a half (2 1/2) hours of work, the
bottling operators are given a 30-minute break and this goes on until the
shift ends. In September 2008 and up to the present, the rotation has
changed and bottling operators are now given a 30-minute break after
one and one half (1 1/2) hours of work.
In 1974, the bottling operators of then Bottling Line 2 were provided with
chairs upon their request. In 1988, the bottling operators of then Bottling
Line 1 followed suit and asked to be provided also with chairs. Their
request was likewise granted. Sometime in September 2008, the chairs
provided for the operators were removed pursuant to a national directive
of petitioner. This directive is in line with the "I Operate, I Maintain, I
Clean" program of petitioner for bottling operators, wherein every bottling
operator is given the responsibility to keep the machinery and equipment
assigned to him clean and safe. The program reinforces the task of
bottling operators to constantly move about in the performance of their
duties and responsibilities.
AcSIDE
of
chairs
production/manufacturing
of
line
the
operators
while
assigned
performing
their
at
the
duties
and
The Arbitration Committee ruled, among others, that the use of chairs by the
operators had been a company practice for 34 years in Bottling Line 2, from 1974
to 2008, and 20 years in Bottling Line 1, from 1988 to 2008; that the use of the
chairs by the operators constituted a company practice favorable to the Union;
that it ripened into a benefit after it had been enjoyed by it; that any benefit being
enjoyed by the employees could not be reduced, diminished, discontinued, or
eliminated by the employer in accordance with Article 100 of the Labor Code,
which prohibited the diminution or elimination by the employer of the employees'
benefit; and that jurisprudence had not laid down any rule requiring a specific
minimum number of years before a benefit would constitute a voluntary company
practice which could not be unilaterally withdrawn by the employer.
The Arbitration Committee further stated that, although the removal of the chairs
was done in good faith, CCBPI failed to present evidence regarding instances of
sleeping while on duty. There were no specific details as to the number of
incidents of sleeping on duty, who were involved, when these incidents
happened, and what actions were taken. There was no evidence either of any
accident or injury in the many years that the bottling operators used chairs. To the
Arbitration Committee, it was puzzling why it took 34 and 20 years for CCBPI to
be so solicitous of the bottling operators' safety that it removed their chairs so that
they would not fall asleep and injure themselves.
Finally, the Arbitration Committee was of the view that, contrary to CCBPI's
position, line efficiency was the result of many factors and it could not be
attributed solely to one such as the removal of the chairs.
SHcDAI
Not contented with the Arbitration Committee's decision, CCBPI filed a petition for
review under Rule 43 before the CA.
Ruling of the CA
On May 24, 2011, the CA rendered a contrasting decision which nullified and set
aside the decision of the Arbitration Committee. The dispositive portion of the CA
decision reads:
WHEREFORE, premises considered, the petition is hereby GRANTED
and the Decision, dated 11 June 2010, of the Arbitration Committee in
AC389-VII-09-10-2009D is NULLIFIED and SET ASIDE. A new one is
entered in its stead SUSTAINING the removal of the chairs of the bottling
operators from the manufacturing/production line. 5
The CA held among others, that the removal of the chairs from the
manufacturing/production lines by CCBPI is within the province of management
prerogatives; that it was part of its inherent right to control and manage its
enterprise effectively; and that since it was the employer's discretion to constantly
develop measures or means to optimize the efficiency of its employees and to
keep its machineries and equipment in the best of conditions, it was only
appropriate that it should be given wide latitude in exercising it.
The CA stated that CCBPI complied with the conditions of a valid exercise of a
management prerogative when it decided to remove the chairs used by the
bottling operators in the manufacturing/production lines. The removal of the
chairs was solely motivated by the best intentions for both the Union and CCBPI,
in line with the "I Operate, I Maintain, I Clean" program for bottling operators,
wherein every bottling operator was given the responsibility to keep the
machinery and equipment assigned to him clean and safe. The program would
reinforce the task of bottling operators to constantly move about in the
performance of their duties and responsibilities. Without the chairs, the bottling
operators could efficiently supervise these machineries' operations and
maintenance. It would also be beneficial for them because the working time
before the break in each rotation for each shift was substantially reduced from
two and a half hours (2 1/2) to one and a half hours (1 1/2) before the 30-minute
break. This scheme was clearly advantageous to the bottling operators as the
number of resting periods was increased. CCBPI had the best intentions in
removing the chairs because some bottling operators had the propensity to fall
asleep while on the job and sleeping on the job ran the risk of injury exposure
and removing them reduced the risk.
The CA added that the decision of CCBPI to remove the chairs was not done for
the purpose of defeating or circumventing the rights of its employees under the
special laws, the Collective Bargaining Agreement (CBA) or the general principles
of justice and fair play. It opined that the principles of justice and fair play were
not violated because, when the chairs were removed, there was a commensurate
reduction of the working time for each rotation in each shift. The provision of
chairs for the bottling operators was never part of the CBAs contracted between
the Union and CCBPI. The chairs were not provided as a benefit because such
matter was dependent upon the exigencies of the work of the bottling operators.
As such, CCBPI could withdraw this provision if it was not necessary in the
exigencies of the work, if it was not contributing to the efficiency of the bottling
operators or if it would expose them to some hazards. Lastly, the CA explained
that the provision of chairs to the bottling operators cannot be covered by Article
100 of the Labor Code on elimination or diminution of benefits because the
employee's benefits referred to therein mainly involved monetary considerations
or privileges converted to their monetary equivalent.
Disgruntled with the adverse CA decision, the Union has come to this Court
praying for its reversal on the following:
GROUNDS
I
THAT
WITH
COMMITTED
DUE
RESPECT,
REVERSIBLE
THE
ERROR
COURT
IN
OF
HOLDING
APPEALS
THAT
ADCSEa
In advocacy of its positions, the Union argues that the proper remedy in
challenging the decision of the Arbitration Committee before the CA is a petition
for certiorari under Rule 65. The petition for review under Rule 43 resorted to by
CCBPI should have been dismissed for being an improper remedy. The Union
points out that the parties agreed to submit the unresolved grievance involving
the removal of chairs to voluntary arbitration pursuant to the provisions of Article
V of the existing CBA. Hence, the assailed decision of the Arbitration Committee
is a judgment or final order issued under the Labor Code of the Philippines.
Section 2, Rule 43 of the 1997 Rules of Civil Procedure, expressly states that the
said rule does not cover cases under the Labor Code of the Philippines. The
judgments or final orders of the Voluntary Arbitrator or Panel of Voluntary
Arbitrators are governed by the provisions of Articles 260, 261, 262, 262-A, and
262-B of the Labor Code of the Philippines.
On the substantive aspect, the Union argues that there is no connection between
CCBPI's "I Operate, I Maintain, I Clean" program and the removal of the chairs
because the implementation of the program was in 2006 and the removal of the
chairs was done in 2008. The 30-minute break is part of an operator's working
hours and does not make any difference. The frequency of the break period is not
advantageous to the operators because it cannot compensate for the time they
are made to stand throughout their working time. The bottling operators get tired
and exhausted after their tour of duty even with chairs around. How much more if
the chairs are removed?
The Union, further claims that management prerogatives are not absolute but
subject to certain limitations found in law, a collective bargaining agreement, or
general principles of fair play and justice. The operators have been performing
their assigned duties and responsibilities satisfactorily for thirty (30) years using
chairs. There is no record of poor performance because the operators are sitting
all the time. There is no single incident when the attention of an operator was
called for failure to carry out his assigned tasks. CCBPI has not submitted any
evidence to prove that the performance of the operators was poor before the
removal of the chairs and that it has improved after the chairs were removed. The
presence of chairs for more than 30 years made the operators awake and alert
as they could relax from time to time. There are sanctions for those caught
sleeping while on duty. Before the removal of the chairs, the efficiency of the
operators was much better and there was no recorded accident. After the
removal of the chairs, the efficiency of the operators diminished considerably,
resulting in the drastic decline of line efficiency.
Finally, the Union asserts that the removal of the chairs constitutes violation of
the Occupational Health and Safety Standards, which provide that every
company shall keep and maintain its workplace free from hazards that are likely
to cause physical harm to the workers or damage to property. The removal of the
chairs constitutes a violation of the State policy to assure the right of workers to a
just and humane condition of work pursuant to Article 3 of the Labor Code and of
CCBPI's Global Workplace Rights Policy. Hence, the unilateral withdrawal,
elimination or removal of the chairs, which have been in existence for more than
30 years, constitutes a violation of existing practice.
The respondent's position
CCBPI reiterates the ruling of the CA that a petition for review under Rule 43 of
the Rules of Court was the proper remedy to question the decision of the
Arbitration Committee. It likewise echoes the ruling of the CA that the removal of
the chairs was a legitimate exercise of management prerogative that it was done
not to harm the bottling operators but for the purpose of optimizing their efficiency
and CCBPI's machineries and equipment; and that the exercise of its
management prerogative, was done in good faith and not for the purpose of
circumventing the alights of the employees under the special laws, the CBA or
the general principles of justice and fair play.
The Court's Ruling
The decision in this case rests on the resolution of two basic questions. First, is
an appeal to the CA via a petition for review under Rule 43 of the 1997 Rules of
Civil Procedure a proper remedy to question the decision of the Arbitration
Committee? Second, was the removal of the bottling operators' chairs from
CCBPI's production/manufacturing lines a valid exercise of a management
prerogative?
The Court sustains the ruling of the CA on both issues.
Regarding the first issue, the Union insists that the CA erred in ruling that the
recourse taken by CCBPI in appealing the decision of the Arbitration Committee
was proper. It argues that the proper remedy in challenging the decision of the
Voluntary Arbitrator before the CA is by filing a petition for certiorari under Rule
65 of the Rules of Court, not a petition for review under Rule 43.
TAaEIc
CCBPI counters that the CA was correct in ruling that the recourse it took in
appealing the decision of the Arbitration Committee to the CA via a petition for
review under Rule 43 of the Rules of Court was proper and in conformity with the
rules and prevailing jurisprudence.
A
Petition
under
Rule
for
43
Review
is
the
proper remedy
CCBPI is correct. This procedural issue being debated upon is not novel. The
Court has already ruled in a number of cases that a decision or award of a
voluntary arbitrator is appealable to the CA via a petition for review under Rule
43. The recent case of Samahan ng mga Manggagawa sa Hyatt (SAMASAHNUWHRAIN) v. Hon. Voluntary Arbitrator Buenaventura C. Magsalin and Hotel
Enterprises of the Philippines 6 reiterated the well-settled doctrine on this issue, to
wit:
In the case of Samahan ng mga Manggagawa sa Hyatt-NUWHRAINAPL v. Bacungan, 7 we repeated the well-settled rule that a decision or
award of a voluntary arbitrator is appealable to the CA via petition for
review under Rule 43. We held that:
"The question on the proper recourse to assail a decision of a
voluntary
arbitrator
has
already
been
settled
in Luzon
and
quasi-judicial
agencies,
instrumentalities,
aTADcH
On the second issue, the Union basically claims that the CCBPI's decision to
unilaterally remove the operators' chairs from the production/manufacturing lines
of its bottling plants is not valid because it violates some fundamental labor
policies. According to the Union, such removal constitutes a violation of the 1)
Occupational Health and Safety Standards which provide that every worker is
entitled to be provided by the employer with appropriate seats, among others; 2)
policy of the State to assure the right of workers to a just and humane condition
of work as provided for in Article 3 of the Labor Code;
3) Global Workplace
Rights Policy of CCBPI which provides for a safe and healthy workplace by
maintaining a productive workplace and by minimizing the risk of accident, injury
and exposure to health risks; and 4) diminution of benefits provided in Article 100
of the Labor Code. 9
Opposing the Union's argument, CCBPI mainly contends that the removal of the
subject chairs is a valid exercise of management prerogative. The management
decision to remove the subject chairs was made in good faith and did not intend
to defeat or circumvent the rights of the Union under the special laws, the CBA
and the general principles of justice and fair play.
Again, the Court agrees with CCBPI on the matter.
A
Valid
Exercise
of
Management Prerogative
The Court has held that management is free to regulate, according to its own
discretion and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place, and manner of work, processes to
be followed, supervision of workers, working regulations, transfer of employees,
work supervision, lay-off of workers, and discipline, dismissal and recall of
workers. The exercise of management prerogative, however, is not absolute as it
must be exercised in good faith and with due regard to the rights of labor. 10
In the present controversy, it cannot be denied that CCBPI removed the
operators' chairs pursuant to a national directive and in line with its "I Operate, I
Maintain, I Clean" program, launched to enable the Union to perform their duties
and
responsibilities
more
efficiently.
The
chairs
were
not
removed
indiscriminately. They were carefully studied with due regard to the welfare of the
members of the Union. The removal of the chairs was compensated
by: a) a reduction of the operating hours of the bottling operators from a twoand-one-half (2 1/2)-hour rotation period to a one-and-a-half (1 1/2) hour rotation
period; and b) an increase of the break period from 15 to 30 minutes between
rotations.
Apparently, the decision to remove the chairs was done with good intentions as
CCBPI wanted to avoid instances of operators sleeping on the job while in the
performance of their duties and responsibilities and because of the fact that the
chairs were not necessary considering that the operators constantly move about
while working. In short, the removal of the chairs was designed to increase work
efficiency. Hence, CCBPI's exercise of its management prerogative was made in
good faith without doing any harm to the workers' rights.
cTEICD
The fact that there is no proof of any operator sleeping on the job is of no
moment. There is no guarantee that such incident would never happen as sitting
on a chair is relaxing. Besides, the operators constantly move about while doing
their job. The ultimate purpose is to promote work efficiency.
No Violation of Labor Laws
The rights of the Union under any labor law were not violated. There is no law
that requires employers to provide chairs for bottling operators. The CA correctly
ruled that the Labor Code, specifically Article 132
11
health
and
early
death,
even
among
those
who
meet,
or
exceed,
HcACST
Of course, in this case, if the chairs would be returned, no risks would be involved
because of the shorter period of working time. The study was cited just to show
that there is a health risk in prolonged sitting.
No Violation of the CBA
The CBA 15 between the Union and CCBPI contains no provision whatsoever
requiring the management to provide chairs for the operators in the
production/manufacturing line while performing their duties and responsibilities.
On the contrary, Section 2 of Article 1 of the CBA expressly provides as follows:
Article I
SCOPE
SECTION 2. Scope of the Agreement. All the terms and conditions of
employment of employees and workers within the appropriate bargaining
unit (as defined in Section 1 hereof) are embodied in this Agreement and
the same shall govern the relationship between the COMPANY and such
employees and/or workers. On the other hand, all such benefits
As can be gleaned from the aforecited provision, the CBA expressly provides that
benefits and/or privileges, not expressly given therein but which are presently
being granted by the company and enjoyed by the employees, shall be
considered as purely voluntary acts by the management and that the continuance
of such benefits and/or privileges, no matter how long or how often, shall not be
understood as establishing an obligation on the company's part. Since the matter
of the chairs is not expressly stated in the CBA, it is understood that it was a
purely voluntary act on the part of CCBPI and the long practice did not convert it
into an obligation or a vested right in favor of the Union.
No
Violation
of
the
general
principles
A break time of thirty (30) minutes after working for only one and a half (1 1/2)
hours is a just and fair work schedule.
No
Violation
of
Article
100
CIaASH
In this regard, the Court agrees with the CA when it resolved the matter and
wrote:
Let it be stressed that the aforequoted article speaks of non-diminution of
supplements and other employee benefits. Supplements are privileges
given to an employee which constitute as extra remuneration besides his
or her basic ordinary earnings and wages. From this definition, We can
only deduce that the other employee benefits spoken of by Article 100
pertain only to those which are susceptible of monetary considerations.
Indeed, this could only be the most plausible conclusion because the
cases tackling Article 100 involve mainly with monetary considerations or
privileges converted to their monetary equivalents.
xxx xxx xxx
Without a doubt, equating the provision of chairs to the bottling operators
as something within the ambit of "benefits" in the context of Article 100 of
the Labor Code is unduly stretching the coverage of the law. The
interpretations of Article 100 of the Labor Code do not show even with
the slightest hint that such provision of chairs for the bottling operators
may be sheltered under its mantle. 21
(Royal Plant Workers Union v. Coca-Cola Bottlers Phils., Inc., G.R. No. 198783,
DECISION
CHICO-NAZARIO, J :
p
Before this Court is a Petition for Review on Certiorari under Rule 45 of the 1997
Revised Rules of Civil Procedure seeking to reverse and set aside (1) the
Decision 1 of the Court of Appeals in CA-G.R. SP No. 50806, dated 24 April
2000, which modified the Decision 2 of the National Labor Relations Commission
(NLRC), dated 30 January 1996 in NLRC NCR CA No. 001737-91 (NLRC NCR
Case No. 00-09-04432-89), and thereby held the petitioner solidarily liable with
the private respondents for the satisfaction of the separation pay of the latter's
employees; and (2) the Resolution 3 of the appellate court, dated 27 September
2000, in the same case which denied the petitioner's Motion for Reconsideration.
Petitioner Meralco Industrial Engineering Services Corporation (MIESCOR) is a
corporation duly organized and existing under the laws of the Republic of the
Philippines and a client of private respondents. Private respondent Ofelia P.
Landrito General Services (OPLGS) is a business firm engaged in providing and
rendering general services, such as janitorial and maintenance work to its clients,
while private respondent Ofelia P. Landrito is the Proprietor and General Manager
of OPLGS.
The factual milieu of the present case is as follows:
On 7 November 1984, petitioner and private respondents executed Contract
Order No. 166-84, 4 whereby the latter would supply the petitioner janitorial
services, which include labor, materials, tools and equipment, as well as
supervision of its assigned employees, at petitioner's Rockwell Thermal Plant in
Makati City. Pursuant thereto, private respondents assigned their 49 employees
as janitors to petitioner's Rockwell Thermal Plant with a daily wage of P51.50 per
employee.
On 20 September 1989, however, the aforesaid 49 employees (complainants)
lodged a Complaint for illegal deduction, underpayment, non-payment of overtime
pay, legal holiday pay, premium pay for holiday and rest day and night
differentials 5 against the private respondents before the Labor Arbiter. The case
was docketed as NLRC NCR Case No. 00-09-04432-89.
In view of the enactment of Republic Act No. 6727, 6 the contract between the
petitioner and the private respondents was amended 7 for the 10th time on 3
November 1989 to increase the minimum daily wage per employee from P63.55
to P89.00 or P2,670.00 per month. Two months thereafter, or on 2 January
1990, 8 petitioner sent a letter to private respondents informing them that effective
at the close of business hours on 31 January 1990, petitioner was terminating
Contract Order No. 166-84. Accordingly, at the end of the business hours on 31
January 1990, the complainants were pulled out from their work at the petitioner's
Rockwell Thermal Plant. Thus, on 27 February 1990, complainants amended
their Complaint to include the charge of illegal dismissal and to implead the
petitioner as a party respondent therein.
Since the parties failed to settle amicably before the Labor Arbiter, they submitted
their respective position papers and other pleadings together with their
documentary evidence. Thereafter, a Decision was rendered by the Labor Arbiter
on 26 March 1991, dismissing the Complaint against the petitioner for lack of
merit, but ordering the private respondents to pay the complainants the total
amount of P487,287.07 representing unpaid wages, separation pay and overtime
pay; as well as attorney's fees in an amount equivalent to 10% of the award or
P48,728.70. All other claims of the complainants against the private respondents
were dismissed. 9
Feeling aggrieved, private respondents appealed the aforesaid Decision to the
NLRC. Private respondents alleged, among other things, that: (1) 48 of the 49
complainants had executed affidavits of desistance and they had never attended
any hearing nor given any authority to anyone to file a case on their behalf; (2)
the Labor Arbiter erred in not conducting a full-blown hearing on the case; (3)
there is only one complainant in that case who submitted a position paper on his
own; (4) the complainants were not constructively dismissed when they were not
given assignments within a period of six months, but had abandoned their jobs
when they failed to report to another place of assignment; and (5) the petitioner,
being the principal, was solidarily liable with the private respondents for
failure to make an adjustment on the wages of the complainants.
May 1993, the NLRC issued a Resolution
11
10
On 28
Arbiter dated 26 March 1991 with the modification that the petitioner was
solidarily liable with the private respondents, ratiocinating thus:
We, however, disagree with the dismissal of the case against
[herein petitioner]. Under Art. 107
12
contractor. Under
Art.
109, 13 for
purposes
of
of
employer-employee
relations.
14
[Emphasis
aHcDEC
15
of the case, the judgment award in the amount of P487,287.07 was secured
by a surety bond posted by the private respondents; 16 hence, there was no
the
NLRC
denied
the
private
respondents'
Motion
for
Reconsideration. The NLRC likewise directed the Labor Arbiter to enforce the
monetary award against the private respondents' surety bond and to determine
who should finally shoulder the liability therefor. 17
Alleging grave abuse of discretion of the NLRC in its issuance of the Resolution
and Order dated 28 May 1993 and 30 July 1993, respectively, private
respondents filed before this Court a Petition for Certiorari with prayer for the
issuance of a writ of preliminary injunction. The same was docketed as G.R. No.
111506 entitled Ofelia Landrito General Services v. National Labor Relations
Commission. The said Petition suspended the proceedings before the Labor
Arbiter.
On 23 May 1994, however, this Court issued a Resolution
18
111506 for failure of private respondents to sufficiently show that the NLRC had
committed grave abuse of discretion in rendering its questioned judgment. This
Court's Resolution in G.R. No. 111506 became final and executory on 25 July
1994. 19
As a consequence thereof, the proceedings before the Labor Arbiter resumed
with respect to the determination of who should finally shoulder the liability for the
monetary awards granted to the complainants, in accordance with the NLRC
Order dated 30 July 1993.
On 5 October 1994, the Labor Arbiter issued an Order, 20 which reads:
As can be gleaned from the Resolution dated [28 May 1993], there is
that necessity of clarifying the respective liabilities of [herein petitioner]
and [herein private respondents] insofar as the judgment award in the
total sum of P487,287.07 is concerned.
The judgment award in the total sum of P487,287.07 as contained in
the Decision dated [26 March 1991]consists of three (3) parts, as
follows: First, the judgment award on the underpayment; Second, the
DaIAcC
21
employees
for
purposes
of
paying
the
should
the
complainants
enforce
the
judgment
on
the
Again, both the private respondents and the petitioner appealed the afore-quoted
Order of the Labor Arbiter to the NLRC. On 25 April 1995, the NLRC issued a
Resolution 22 affirming the Order dated 5 October 1994 of the Labor Arbiter and
dismissing both appeals for non-posting of the appeal or surety bond and/or for
utter lack of merit. 23When the private respondents and the petitioner moved for
reconsideration, however, it was granted by the NLRC in its Order
24
dated 27
July 1995. The NLRC thus set aside its Resolution dated 25 April 1995, and
directed the private respondents and the petitioner to each post an appeal bond
in the amount of P487,287.62 to perfect their respective appeals.
25
Both parties
complied. 26
On 30 January 1996, the NLRC rendered a Decision modifying the Order of the
Labor Arbiter dated 5 October 1994, the dispositive portion of which reads:
28
This NLRC Order dated 30 October 1996 became final and executory on 29
November 1996.
On 4 December 1996, private respondents filed a Petition for Certiorari 29 before
this Court assailing the Decision and the Order of the NLRC dated 30 January
1996 and 30 October 1996, respectively. On 9 December 1998, this Court issued
a Resolution 30 referring the case to the Court of Appeals conformably with its
ruling in St. Martin Funeral Home v. National Labor Relations Commission. 31 The
case was docketed before the appellate court as CA-G.R. SP No. 50806.
The Petition made a sole assignment of error, to wit:
THE HONORABLE COMMISSION GRAVELY ERRED AND GRAVELY
ABUSED ITS DISCRETION IN FINDING THAT THE ULTIMATE
LIABILITY
SHOULD
FALL
ON
THE
[HEREIN
PRIVATE
After due proceedings, the Court of Appeals rendered the assailed Decision on
24 April 2000, modifying the Decision of the NLRC dated 30 January 1996
and holding the petitioner solidarily liable with the private respondents for
The petitioner filed a Motion for Reconsideration of the aforesaid Decision but it
was denied by the Court of Appeals in a Resolution dated 27 September 2000.
Petitioner
now
comes
before
this
Court via a
Petition
for
Review
on Certiorari, docketed as G.R. No. 145402, raising the sole issue of "whether or
not the Honorable Court of Appeals palpably erred when it went beyond the
issues of the case as it modified the factual findings of the Labor Arbiter which
attained finality after it was affirmed by Public Respondent NLRC and by the
Supreme Court which can no longer be disturbed as it became the law of the
case." 34
Petitioner argues that in the assailed Decision dated 24 April 2000, the Court of
Appeals found that the sole issue for its resolution was whether the ultimate
liability to pay the monetary awards in favor of the 49 employees falls on the
private respondents without reimbursement from the petitioner. Hence, the
appellate court should have limited itself to determining the right of private
respondents to still seek reimbursement from petitioner for the monetary awards
on the unpaid wages and overtime pay of the complainants.
According to petitioner, the NLRC, in its Resolution dated 28 May 1993, already
found that petitioner had fully complied with its salary obligations to the
complainants. Petitioner invokes the same NLRC Resolution to support its claim
that it was not liable to share with the private respondents in the payment of
separation pay to complainants. When private respondents questioned the said
NLRC Resolution in a Petition for Certiorari with this Court, docketed as G.R. No.
111506, this Court found that the NLRC did not commit grave abuse of discretion
in the issuance thereof and accordingly dismissed private respondents' Petition.
Said NLRC Resolution, therefore, has since become final and executory and can
no longer be disturbed for it now constitutes the law of the case.
Assuming for the sake of argument that the Court of Appeals can still take
cognizance of the issue of petitioner's liability for complainants' separation pay,
petitioner asserts that the appellate court seriously erred in concluding that it is
jointly and solidarily liable with private respondents for the payment thereof. The
IDSaTE
Law of the case has been defined as the opinion delivered on a former appeal. It
is a term applied to an established rule that when an appellate court passes on a
question and remands the case to the lower court for further proceedings,
the question there settled becomes the law of the case upon subsequent
appeal. It means that whatever is once irrevocably established as the controlling
legal rule or decision between the same parties in the same case continues to be
the law of the case, whether correct on general principles or not, so long as the
facts on which such decision was predicated continue to be the facts of the case
before the court. 35 Indeed, courts must adhere thereto, whether the legal
principles laid down were "correct on general principles or not" or "whether the
question is right or wrong" because public policy, judicial orderliness and
economy require such stability in the final judgments of courts or tribunals of
competent jurisdiction. 36
Petitioner's application of the law of the case principle to the case at bar as
regards its liability for payment of separation pay is misplaced.
The only matters settled in the 23 May 1994 Resolution of this Court in G.R. No.
111506, which can be regarded as the law of the case, were (1) both the
petitioner and the private respondents were jointly and solidarily liable for the
judgment awards due the complainants; and (2) the said judgment awards shall
be enforced against the surety bond posted by the private respondents. However,
the issue as regards the liability of the petitioner for payment of separation pay
was yet to be resolved because precisely, the NLRC, in its Order dated 30 July
1993, still directed the Labor Arbiter to make a determination on who should
finally shoulder the monetary awards granted to the complainants. And it was
only after G.R. No. 111506 was dismissed by this Court that the Labor Arbiter
promulgated his Decision dated 5 October 1994, wherein he clarified the
respective liabilities of the petitioner and the private respondents for the judgment
awards. In his 5 October 1994 Decision, the Labor Arbiter explained that the
solidary liability of the petitioner was limited to the monetary awards for wage
underpayment and non-payment of overtime pay due the complainants, and it did
not, in any way, extend to the payment of separation pay as the same was the
sole liability of the private respondents.
However, the afore-quoted provision must be read in conjunction with Articles 106
and 107 of the Labor Code,as amended.
Article 107 of the Labor Code,as amended, defines an indirect employer as "any
person, partnership, association or corporation which, not being an employer,
contracts with an independent contractor for the performance of any work, task,
job or project." To ensure that the contractor's employees are paid their
appropriate wages, Article 106 of the Labor Code,as amended, provides:
ART. 106. CONTRACTOR OR SUBCONTRACTOR. . . . .
In the event that the contractor or subcontractor fails to pay the wages of
his employees in accordance with this Code, the employer shall be
Taken together, an indirect employer (as defined by Article 107) can only be held
solidarily liable with the independent contractor or subcontractor (as provided
under Article 109) in the event that the latter fails to pay the wages of its
employees (as described in Article 106).
Hence, while it is true that the petitioner was the indirect employer of the
complainants, it cannot be held liable in the same way as the employer in every
respect. The petitioner may be considered an indirect employer only for
purposes of unpaid wages. As this Court succinctly explained in Philippine
Airlines, Inc. v. National Labor Relations Commission: 37
While USSI is an independent contractor under the security service
agreement and PAL may be considered an indirect employer, that status
did not make PAL the employer of the security guards in every respect.
As correctly posited by the Office of the Solicitor General, PAL may be
considered an indirect employer only for purposes of unpaid wages since
Article 106, which is applicable to the situation contemplated in Section
107, speaks of wages. The concept of indirect employer only relates or
refers to the liability for unpaid wages. Read together, Articles 106 and
109 simply mean that the party with whom an independent contractor
deals is solidarily liable with the latter for unpaid wages, and only to that
extent and for that purpose that the latter is considered a direct
employer. The term "wage" is defined in Article 97(f) of the Labor
Code as "the remuneration of earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on a
time, task, piece, or commission basis, or other method of calculating the
unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and
reasonable value, as determined by the Secretary of Labor, of board,
aHATDI
It is the established fact of conspiracy that will tie the principal or indirect
employer to the illegal dismissal of the contractor or subcontractor's
employees. In the present case, there is no allegation, much less proof
presented, that the petitioner conspired with private respondents in the illegal
dismissal of the latter's employees; hence, it cannot be held liable for the
same.
Neither can the liability for the separation pay of the complainants be extended to
the petitioner based on contract. Contract Order No. 166-84 executed between
the petitioner and the private respondents contains no provision for separation
pay in the event that the petitioner terminates the same. It is basic that a contract
is the law between the parties and the stipulations therein, provided that they are
not contrary to law, morals, good customs, public order or public policy, shall be
binding as between the parties. 39 Hence, if the contract does not provide for
such a liability, this Court cannot just read the same into the contract without
possibly violating the intention of the parties.
It is also worth noting that although the issue in CA-G.R. SP No. 50806 pertains
to private respondents' right to reimbursement from petitioner for the "monetary
awards" in favor of the complainants, they limited their arguments to the
monetary awards for underpayment of wages and non-payment of overtime pay,
and were conspicuously silent on the monetary award for separation pay. Thus,
private respondents' sole liability for the separation pay of their employees should
have been deemed settled and already beyond the power of the Court of Appeals
to resolve, since it was an issue never raised before it. 40
Although petitioner is not liable for complainants' separation pay, the Court
conforms to the consistent findings in the proceedings below that the petitioner is
solidarily liable with the private respondents for the judgment awards for
underpayment of wages and non-payment of overtime pay.
In this case, however, private respondents had already posted a surety bond in
an amount sufficient to cover all the judgment awards due the complainants,
including those for underpayment of wages and non-payment of overtime pay.
The joint and several liability of the principal with the contractor and subcontractor
were enacted to ensure compliance with the provisions of the Labor
Code,principally those on statutory minimum wage. This liability facilitates, if not
guarantees, payment of the workers' compensation, thus, giving the workers
ample protection as mandated by the 1987 Constitution. 41 With private
respondents' surety bond, it can therefore be said that the purpose of the Labor
Code provision on the solidary liability of the indirect employer is already
accomplished since the interest of the complainants are already adequately
protected. Consequently, it will be futile to continuously hold the petitioner jointly
and solidarily liable with the private respondents for the judgment awards for
underpayment of wages and non-payment of overtime pay.
But while this Court had previously ruled that the indirect employer can recover
whatever amount it had paid to the employees in accordance with the terms of
the service contract between itself and the contractor,
42
43
by the Labor Arbiter, 44 untouched by the NLRC 45 and explicitly affirmed by the
Court of Appeals, 46 and which should already bind this Court.
This Court is not a trier of facts. Well-settled is the rule that the jurisdiction of this
Court in a petition for review oncertiorari under Rule 45 of the Revised Rules of
Court is limited to reviewing only errors of law, not of fact, unless the factual
findings complained of are completely devoid of support from the evidence on
record, or the assailed judgment is based on a gross misapprehension of facts.
Besides, factual findings of quasi-judicial agencies like the NLRC, when affirmed
by the Court of Appeals, are conclusive upon the parties and binding on this
Court. 47
Having already received from petitioner the correct amount of wages and
benefits, but having failed to turn them over to the complainants, private
respondents should now solely bear the liability for the underpayment of wages
and non-payment of the overtime pay.
Commission, G.R. No. 145402, [March 14, 2008], 572 PHIL 94-118)
DECISION
CARPIO MORALES, J :
p
And it expressly provided that Synergy was "an independent contractor and . . .
that there w[ould] be no employer-employee relationship between
CONTRACTOR and/or its employees on the one hand, and OWNER, on the
other." 4
On the duration of the Agreement, Section 10 thereof provided:
10.1 Should at any time OWNER find the services herein undertaken by
CONTRACTOR to be unsatisfactory, it shall notify CONTRACTOR
who shall have fifteen (15) days from such notice within which to
improve the services. If CONTRACTOR fails to improve the
services under this Agreement according to OWNER'S
specifications and standards, OWNER shall have the right to
terminate this Agreement immediately and without advance
notice.
10.2 Should CONTRACTOR fail to improve the services within the period
stated above or should CONTRACTOR breach the terms of this
Agreement and fail or refuse to perform the Work in such a
manner as will be consistent with the achievement of the result
therein contracted for or in any other way fail to comply strictly
with any terms of this
Agreement, OWNER at its option, shall have the right toterminate
this Agreement and to make other arrangements for having said
Work performed and pursuant thereto shall retain so much of the
money held on the Agreement as is necessary to cover the
OWNER's costs and damages, without prejudice to the right of
OWNER to seek resort to the bond furnished by CONTRACTOR
should the money in OWNER's possession be insufficient.
aIDHET
Except for respondent Benedicto Auxtero (Auxtero), the rest of the respondents,
who appear to have been assigned by Synergy to petitioner following the
execution of the July 15, 1991 Agreement, filed on March 3, 1992 complaints
before the NLRC Regional Office VII at Cebu City against petitioner, Synergy and
their respective officials forunderpayment, non-payment of premium pay for
holidays, premium pay for rest days, service incentive leave
pay,13th month pay and allowances, and for regularization of
employment status with petitioner, they claiming to be "performing duties for the
benefit of [petitioner] since their job is directly connected with [its]
business . . . ." 5
Respondent Auxtero had initially filed a complaint against petitioner and Synergy
and their respective officials for regularization of his employment status. Later
alleging that he was, without valid ground, verbally dismissed, he filed a
complaint against petitioner and Synergy and their respective
officials for illegal dismissal and reinstatementwith full backwages. 6
The complaints of respondents were consolidated.
By Decision 7 of August 29, 1994, Labor Arbiter Dominador Almirante found
Synergy an independent contractor and dismissed respondents' complaint for
regularization against petitioner, but granted their money claims. The fallo of the
decision reads:
WHEREFORE, foregoing premises considered, judgment is hereby
rendered as follows:
(1) Ordering respondents PAL and Synergy jointly and severally to
pay all the complainants herein their 13th month pay and service
incentive leave benefits;
xxx xxx xxx
(3) Ordering respondent Synergy to pay complainant Benedicto
Auxtero a financial assistance in the amount of P5,000.00.
The awards hereinabove enumerated in the aggregate total amount of
THREE HUNDRED TWENTY-TWO THOUSAND THREE HUNDRED
FIFTY NINE PESOS AND EIGHTY SEVEN CENTAVOS (P322,359.87)
On appeal by respondents, the NLRC, Fourth Division, Cebu City, vacated and
set aside the decision of the Labor Arbiter by Decision 9 of January 5, 1996,
the fallo of which reads:
WHEREFORE, the Decision of the Labor Arbiter Dominador A.
Almirante, dated August 29, 1994, is hereby VACATED and SET ASIDE
and judgment is hereby rendered:
1. Declaring respondent Synergy Services Corporation to be a 'laboronly' contractor;
2. Ordering respondent Philippine Airlines to accept, as its regular
employees, all the complainants, . . . and
to give each of them the salaries, allowances and other employme
nt benefits and privileges of aregular employee under the
Collective Bargaining Agreement subsisting during the period of
their employment;
Only petitioner assailed the NLRC decision via petition for certiorari before this
Court.
By Resolution 11 of January 25, 1999, this Court referred the case to the Court of
Appeals for appropriate action and disposition, conformably with St. Martin
Funeral Homes v. National Labor Relations Commission which was promulgated
on September 16, 1998.
The appellate court, by Decision of September 29, 2000, affirmed the Decision of
the NLRC. 12 Petitioner's motion for reconsideration having been denied by
Resolution of December 21, 2000, 13 the present petition was filed, faulting the
appellate court
ScaEIT
I.
. . . IN UPHOLDING THE NATIONAL LABOR RELATIONS
COMMISSION DECISION
WHICH IMPOSED THERELATIONSHIP OF EMPLOYER-EMPLOYEE B
ETWEEN PETITIONER AND THE RESPONDENTS HEREIN.
II.
. . . IN AFFIRMING THE RULING OF THE NATIONAL LABOR
RELATIONS
COMMISSION ORDERING THEREINSTATEMENT OF RESPONDENT
AUXTERO DESPITE THE ABSENCE [OF] ANY FACTUAL FINDING IN
THE
DECISION THAT PETITIONER ILLEGALLY TERMINATED HIS EMPLO
YMENT.
III.
. . . [IN ANY EVENT IN] COMMITT[ING] A PATENT AND GRAVE
ERROR IN UPHOLDING THE DECISION OF THE NATIONAL LABOR
RELATIONS COMMISSION WHICH COMPELLED
THE PETITIONER TO EMPLOY THE
RESPONDENTS AS REGULAR EMPLOYEES DESPITE THE
FACT THAT THEIR SERVICES ARE IN EXCESS OF
Petitioner argues that the law does not prohibit an employer from engaging an
independent contractor, like Synergy, which has substantial capital in carrying on
an independent business of contracting, to perform specific jobs.
Petitioner further argues that its contracting out to Synergy various services like
janitorial, aircraft cleaning, baggage-handling, etc., which are directly related to its
business, does not make respondents its employees.
Petitioner furthermore argues that none of the four (4) elements of an employeremployee relationship between petitioner and respondents, viz.: selection and
engagement of an employee, payment of wages, power of dismissal, and the
power to control employee's conduct, is present in the case. 15
Finally, petitioner avers that reinstatement of respondents had been rendered
impossible because it had reduced its personnel due to heavy losses as it had in
fact terminated its service agreement with Synergy effective June 30, 1998 16 as
a cost-saving measure.
The decision of the case hinges on a determination of whether Synergy is a mere
job-only contractor or a legitimate contractor. If Synergy is found to be a mere
job-only contractor, respondents could be considered as regular employees of
petitioner as Synergy would then be a mere agent of petitioner in which case
respondents would be entitled to all the benefits granted to petitioner's regular
employees; otherwise, if Synergy is found to be a legitimate contractor,
respondents' claims against petitioner must fail as they would then be considered
employees of Synergy.
The statutory basis of legitimate contracting or subcontracting is provided in
Article 106 of the Labor Code which reads:
ART. 106. CONTRACTOR OR SUBCONTRACTOR. Whenever an
employer enters into a contract with another person for the performance
of the former's work, the employees of the contractor and of the latter's
HEISca
"Substantial capital or investment" and the "right to control" are defined in the
same Section 5 of the Department Order as follows:
"Substantial capital or investment" refers to capital stocks and
subscribed capitalization in the case of
From the records of the case, it is gathered that the work performed by almost all
of the respondents loading and unloading of baggage and cargo of
passengers is directly related to the main business of petitioner. And the
equipment used by respondents as station loaders, such as trailers and
conveyors, are owned by petitioner. 17
Petitioner asserts, however, that mere compliance with substantial capital
requirement suffices for Synergy to be considered a legitimate contractor,
citing Neri v. National Labor Relations Commission. 18 Petitioner's reliance on
said case is misplaced.
In Neri, the Labor Arbiter and the NLRC both determined that Building Care
Corporation had a capital stock of P1 million fully subscribed and paid for. 19 The
corporation's status as independent contractor had in fact been previously
confirmed in an earlier case 20 by this Court which found it to be serving, among
others, a university, an international bank, a big local bank, a hospital center,
government agencies, etc."
In stark contrast to the case at bar, while petitioner steadfastly asserted before
the Labor Arbiter and the NLRC that Synergy has a substantial capital to engage
in legitimate contracting, it failed to present evidence thereon. As the NLRC held:
The decision of the Labor Arbiter merely mentioned on page 5 of his
decision that respondent SYNERGY has substantial capital, but there
is no showing in the records as to how much is that capital. Neither hadr
It was only after the appellate court rendered its challenged Decision of
September 29, 2002 when petitioner, in its Motion for Reconsideration of the
decision, sought to prove, for the first time, Synergy's substantial capitalization by
attaching photocopies of Synergy's financial statements, e.g., balance sheets,
statements of income and retained earnings, marked as "Annexes 'A' 'A-4.'" 22
More significantly, however, is that respondents worked alongside petitioner's
regular employees who were performing identical work. 23 As San Miguel
Corporation v. Aballa 24 and Dole Philippines, Inc. v. Esteva, et al. 25teach, such is
an indicium of labor-only contracting.
CTEDSI
Even if only one of the two elements is present then, there is labor-only
contracting.
The control test element under the immediately-quoted paragraph (ii), which was
not present in the old Implementing Rules (Department Order No. 10, Series of
1997), 26 echoes the prevailing jurisprudential trend 27elevating such element as
a primary determinant of employer-employee relationship in job contracting
agreements.
Petitioner in fact admitted that it fixes the work schedule of respondents as their
work was dependent on the frequency of plane arrivals. 30 And as the NLRC
found, petitioner's managers and supervisors approved respondents' weekly work
assignments and respondents and other regular PAL employees were all referred
to as "station attendants" of the cargo operation and airfreight services of
petitioner. 31
Respondents having performed tasks which are usually necessary and desirable
in the air transportation business of petitioner, they should be deemed its regular
employees and Synergy as a labor-only contractor. 32
The express provision in the Agreement that Synergy was an independent
contractor and there would be "no employer-employee relationship between
[Synergy] and/or its employees on one hand, and [petitioner] on the other hand"
is not legally binding and conclusive as contractual provisions are not valid
determinants of the existence of such relationship. For it is the totality of the
facts and surrounding circumstances of the case 33which is determinative of
the parties' relationship.
Respecting the dismissal on November 15, 1992 34 of Auxtero, a regular
employee of petitioner who had been working as utility man/helper since
November 1988, it is not legally justified for want of just or authorized cause
therefor and for non-compliance with procedural due process. Petitioner's claim
that he abandoned his work does not persuade. 35 The elements of abandonment
being (1) the failure to report for work or absence without valid or justifiable
reason, and (2) a clear intention to sever the employer-employee relationship
manifested by some overt acts, 36 the onus probandi lies with petitioner which,
however, failed to discharge the same.
Auxtero, having been declared to be a regular employee of petitioner, and found
to be illegally dismissed from employment, should be entitled to salary
differential 37 from the time he rendered one year of service until his dismissal,
cdasia
Petitioner claims, however, that it has become impossible for it to comply with the
orders of the NLRC and the Court of Appeals, for during the pendency of this
case, it was forced to reduce its personnel due to heavy losses caused by
economic crisis and the pilots' strike of June 5, 1998. 41 Hence, there are no
available positions where respondents could be placed.
And petitioner informs that "the employment contracts of all if not most of the
respondents . . . were terminated by Synergy effective 30 June 1998 when
petitioner terminated its contract with Synergy." 42
Other than its bare allegations, petitioner presented nothing to substantiate its
impossibility of compliance. In fact, petitioner waived this defense by failing to
raise it in its Memorandum filed on June 14, 1999 before the Court of
Appeals. 43 Further, the notice of termination in 1998 was in disregard of a
subsisting temporary restraining order 44to preserve the status quo, issued by this
Court in 1996 before it referred the case to the Court of Appeals in January 1999.
So as to thwart the attempt to subvert the implementation of the assailed
decision, respondents are deemed to be continuously employed by petitioner, for
purposes of computing the wages and benefits due respondents.
Finally, it must be stressed that respondents, having been declared to be regular
employees of petitioner, Synergy being a mere agent of the latter, had acquired
security of tenure. As such, they could only be dismissed by petitioner, the real
(Philippine Airlines Inc. v. Ligan, G.R. No. 146408, [February 29, 2008], 570
PHIL 497-515)
DECISION
CHICO-NAZARIO, J :
p
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court, filed by petitioners Randy Almeda, Edwin Audencial,
Nolie Ramirez, Ernesto Calicagan and Reynaldo Calicagan, seeking to reverse
and set aside the Decision 1 dated 10 November 2006 and the Resolution 2 dated
27 April 2007 of the Court of Appeals in CA-G.R. SP No. 93291. The appellate
court reversed and set aside the Decision dated 29 June 2005 and Resolution
dated 24 November 2005 of the National Labor Relations Commission (NLRC) in
NLRC NCR CA No. 039768-04 finding respondent Asahi Glass Philippines, Inc.
jointly and severally liable with San Sebastian Allied Services, Inc. (SSASI) for
illegal dismissal, and ordering both respondent and SSASI to reinstate petitioners
to their former positions and to pay their backwages from 2 December 2002 up to
the date of their actual reinstatement. Instead, the Court of Appeals reinstated the
Decision dated 18 February 2004 of the Labor Arbiter dismissing petitioners'
complaint for illegal dismissal against respondent and SSASI, but ordering the
payment of separation benefits to petitioners.
THIcCA
The present Petition arose from a complaint for illegal dismissal with claims for
moral and exemplary damages and attorney's fees filed by petitioners against
respondent and SSASI.
In their Complaint 3 filed before the Labor Arbiter, petitioners alleged that
respondent (a domestic corporation engaged in the business
of glass manufacturing) and SSASI (a labor-only contractor) entered into a
service contract on 5 March 2002 whereby the latter undertook to provide the
former with the necessary manpower for its operations. Pursuant to such a
contract, SSASI employed petitioners Randy Almeda, Edwin Audencial, Nolie
Ramirez and Ernesto Calicagan as glass cutters, and petitioner Reynaldo
Calicagan as Quality Controller, 4 all assigned to work for respondent. Petitioners
worked for respondent for periods ranging from three to 11 years. 5 On 1
December 2002, respondent terminated its service contract with SSASI, which in
turn, terminated the employment of petitioners on the same date. Believing that
SSASI was a labor-only contractor, and having continuously worked
as glass cutters and quality controllers for the respondent functions which are
directly related to its main line of business as glass manufacturer for three to
11 years, petitioners asserted that they should be considered regular employees
of the respondent; and that their dismissal from employment without the benefit of
due process of law was unlawful. In support of their complaint, petitioners
submitted a copy of their work schedule to show that they were under the direct
control of the respondent which dictated the time and manner of performing their
jobs.
STaAcC
Respondent, on the other hand, refuted petitioners' allegations that they were its
regular employees. Instead, respondent claimed that petitioners were employees
of SSASI and were merely assigned by SSASI to work for respondent to perform
aSHAIC
On 18 February 2004, the Labor Arbiter promulgated his Decision 7 finding that
respondent submitted overwhelming documentary evidence to refute the bare
allegations of the petitioners and accordingly dismissing the complaint for lack of
merit. However, he also ordered the payment of separation benefits to petitioners.
The Labor Arbiter thus decreed:
WHEREFORE, premises considered, judgment is hereby rendered
declaring that the instant case should be, as it is hereby DISMISSED for
lack of merit. However, the respondent San Sebastian Allied Services,
On appeal, the NLRC reversed the afore-quoted Decision of the Labor Arbiter,
giving more evidentiary weight to petitioners' testimonies. It appeared to the
NLRC that SSASI was engaged in labor-only contracting since it did not have
substantial capital and investment in the form of tools, equipment and
machineries. The petitioners were recruited and assigned by SSASI to
respondent as glass cutters, positions which were directly related to respondent's
principal business of glass manufacturing. In light of the factual circumstances of
the case, the NLRC declared that petitioners were employees of respondent and
not of SSASI. Hence, the NLRC ruled in its Decision 8dated 29 June 2005:
cSTDIC
Only respondent moved for the reconsideration of the foregoing NLRC Decision.
Respondent prayed that the NLRC vacate its previous finding that SSASI was
a labor-only contractor and that it was guilty of the illegal dismissal of petitioners.
In a Resolution 9 dated 24 November 2005, the NLRC denied the Motion for
Reconsideration of respondent for lack of compelling justification to modify, alter
or reverse its earlier Decision.
TaSEHC
This prompted respondent to elevate its case to the Court of Appeals by the filing
of a Petition for Certiorari with Application for the Issuance of Temporary
Restraining Order (TRO), 10 alleging that the NLRC abused its discretion in
ignoring the established facts and legal principles fully substantiated by the
documentary evidence on record and legal opinions of labor officials, and in
giving more credence to the empty allegations advanced by petitioners.
To prevent the execution of the Decision dated 25 June 2005 and Resolution
dated 24 November 2005 of the NLRC, respondent included in its Petition a
prayer for the issuance of a TRO, which it reiterated in a motion filed on 29
August 2006. Acting on respondent's motion, the Court of Appeals issued a TRO
on 11 September 2006 enjoining the NLRC from enforcing its 25 June 2005
Decision and 24 November 2005 Resolution. 11
On 10 November 2006, the Court of Appeals rendered a Decision granting
respondent's Petition for Certiorari and reversing the NLRC Decision dated 25
June 2005. The appellate court found merit in respondent's argument that the
NLRC gravely abused its discretion in not finding that there was a legitimate job
contracting between respondent and SSASI. SSASI is a legitimate job contractor
as proven by its Certificate of Registration issued by the DOLE. Respondent
entered into a valid service contract with SSASI, by virtue of which petitioners
were assigned by SSASI to work for respondent. The service contract itself,
which was duly approved by the DOLE, defined the relationship between SSASI
and petitioners as one of employer-employees. It was SSASI which exercised the
power of control over petitioners. Petitioners were merely allowed to work at
respondent's premises for reasons of efficiency. Moreover, it was SSASI, not
respondent, who terminated petitioners' services. The fallo of the Decision of the
Court of Appeals state:
EACTSH
I.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
REVERSING THE FINDING OF THE NLRC THAT RESPONDENT
COMPANY IS ENGAGED IN LABOR-ONLY CONTRACTING.
II.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
REVERSING THE RULING OF THE NLRC THAT SAN SEBASTIAN
ALLIED SERVICES, INC. IS MERELY RESPONDENT'S AGENT AND
RESPONDENT IS PETITIONERS' REAL EMPLOYER.
TcSaHC
III.
THE COURT OF APPEALS COMMITTED AN ERROR IN DISMISSING
PETITIONERS' COMPLAINT FOR ILLEGAL DISMISSAL.
It is apparent to this Court that the judicious resolution of the Petition at bar
hinges on two elemental issues: (1) whether petitioners were employees of
respondent; and (2) if they were, whether they were illegally dismissed.
aETASc
Respondent adamantly insists that petitioners were not its employees but those
of SSASI, a legitimate job contractor duly licensed by the DOLE to undertake job
contracting activities. The job performed by petitioners were not directly related to
respondent's primary venture as flat glass manufacturer, for they were assigned
to the mirroring line to perform glass cutting on occasions when the employees of
respondent could not comply with the market's intermittent increased demand.
And even if petitioners were working at respondent's premises, it was SSASI
which effectively supervised the manner and method petitioners performed their
jobs, except as to the result thereof.
The Court would only be able to deem petitioners as employees of respondent if
it is established that SSASI was a labor-only contractor, and not a legitimate job
contractor or subcontractor.
ISADET
14
cDTHIE
16
DSacAE
was absolute lack of evidence that SSASI exercised control over them or their
work.
ScTCIE
The fact that it was SSASI which dismissed petitioners from employment is
irrelevant. It is hardly proof of control, since it was demonstrated only at the end
of petitioners' employment. What is more, the dismissal of petitioners by SSASI
was a mere result of the termination by respondent of its contractual relations
with SSASI.
Despite respondent's disavowal of the existence of an employer-employee
relationship between it and petitioners and its unyielding insistence that
petitioners were employees of SSASI, the totality of the facts and the surrounding
circumstances of the case convey otherwise. SSASI is a labor-only contractor;
hence, it is considered as the agent of respondent. Respondent is deemed by
law as the employer of petitioners. Surely, respondent cannot expect this Court to
sustain its stance and accord full evidentiary weight to the documentary evidence
belatedly procured in its vain attempt to evade liability as petitioners' employer.
The Certificate of Registration presented by respondent to buttress its position
that SSASI is a duly registered job contractor is of little significance, considering
that it were issued only on 3 January 2003. There is no further proof that prior to
said date, SSASI had already registered with and had been recognized by the
DOLE as a job contractor.
cIECaS
SDECAI
Hence, the status of SSASI as a job contractor previous to its registration with the
DOLE on 3 January 2003 is still refutable. It can only be determined upon an
evaluation of its activities as contractor prior to the issuance of its Certificate of
Registration.
For the same reasons, this Court cannot give much weight to the Opinions dated
18 February 2003 and 10 July 2003 of DOLE Secretary Sto. Tomas and DOLEBLR Director Cacdac, respectively, allowing respondent to contract out certain
services. The said Opinions were noticeably issued only after the hiring and
termination of petitioners. And, although the Opinions allow respondent to
contract out certain services, they do not necessarily prove that the services
respondent contracted to SSASI were actually among those it was allowed to
contract out; or that SSASI was a legitimate job contractor, thus, relieving
respondent of any liability for the dismissal of petitioners by SSASI.
Equally unavailing is respondent's stance that its relationship with petitioners
should be governed by the Accreditation Agreement stipulating that petitioners
were to remain employees of SSASI and shall not become regular employees of
the respondent. To permit respondent to disguise the true nature of its
transactions with SSASI by the terms of its contract, for the purpose of evading
its liabilities under the law, would seriously impair the administration of justice. A
party cannot dictate, by the mere expedient of a unilateral declaration in a
DaEATc
performing the job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and
continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence,
the employment is also considered regular, but only with respect to such
activity and while such activity exists.
20
In the instant Petition, the Court has already declared that petitioners'
employment as quality controllers and glasscutters are directly related to the
usual business or trade of respondent as a glass manufacturer. Respondent
would have wanted this Court to believe that petitioners' employment was
dependent on the increased market demand. However, bearing in mind that
petitioners have worked for respondent for not less than three years and as much
as 11 years, which respondent did not refute, then petitioners' continued
employment clearly demonstrates its continuing necessity and indispensability to
the business of respondent, raising their employment to regular status. Thus,
having gained regular status, petitioners were entitled to security of tenure and
could only be dismissed on just or authorized causes and after they had been
accorded due process. 21
As petitioners' employer, respondent has the burden of proving that the dismissal
was for a cause allowed under the law, and that they were afforded procedural
due process. 22 However, respondent failed to discharge this burden with
substantial evidence as it noticeably narrowed its defense to the denial of any
employer-employee relationship between it and petitioners.
DaScCH
The sole reason given for the dismissal of petitioners by SSASI was the
termination of its service contract with respondent. But since SSASI was a laboronly contractor, and petitioners were to be deemed the employees of respondent,
then the said reason would not constitute a just or authorized cause 23 for
petitioners' dismissal. It would then appear that petitioners were summarily
dismissed based on the afore-cited reason, without compliance with the
procedural due process for notice and hearing.
Herein petitioners, having been unjustly dismissed from work, are entitled to
reinstatement without loss of seniority rights and other privileges and to full back
wages, inclusive of allowances, and to other benefits or their monetary
equivalents computed from the time compensation was withheld up to the time of
actual reinstatement.24 Their earnings elsewhere during the periods of their illegal
dismissal shall not be deducted therefrom. 25
WHEREFORE, premises considered, the instant Petition is GRANTED. The
Decision dated 10 November 2006 and Resolution dated 27 April 2007 of the
Court of Appeals in CA-G.R. SP No. 93291 are REVERSED and SET ASIDE.
The Decision dated 29 June 2005 of the National Labor Relations Commission in
NLRC-NCR CA No. 039768-04 is thereby REINSTATED. Let the records of this
case be remanded to the Computation and Examination Unit of the NLRC for the
proper computation of subject money claims as above-discussed. No costs.
SO ORDERED.
Ynares-Santiago, Austria-Martinez, Nachura and Reyes, JJ., concur.
Footnotes
(Almeda v. Asahi Glass Philippines, Inc., G.R. No. 177785, [September 3,
|||
JUANITO
AMIDO,
REYNALDO
BATICA,
JOAN
JOSELITO
ERICO
DUYANEN,
DUMALAGAN,
REX
JULITO
FARNACIO,
DURIAN,
ROLANDO
STcEaI
RODRIGO
SUPRINO,
RONALD
CORPORATION,
BMA
PHILASIA,
INC.,
SAN
and
SUPRINO,
MIGUEL
ARLENE
EUSEBIO, respondents.
DECISION
REYES, R.T., J :
p
HcISTE
The Facts
Respondent BMA Philasia, Inc. (BMA) is a domestic corporation engaged in the
business of transporting and hauling of cargoes, goods, and commodities of all
kinds. Respondent Arlene Eusebio is the president of BMA.
Petitioners, numbering forty-seven (47) in all, are the former employees of
respondent BMA at respondent San Miguel Corporation's (SMC) warehouse in
Pasig City. They were hired under fixed-term contracts beginning October 1999.
On July 31, 2001, a number of petitioners went to the Department of Labor and
Employment (DOLE) District Office to file a complaint against BMA and Eusebio
for underpayment of wages and non-payment of premium pay for rest day, 13th
month pay, and service incentive leave pay. 2
On August 14, 2001, petitioner Elmer Caboteja was charged with insubordination
and disrespect to superior, failure to properly perform his job assignment, and
unauthorized change of schedule. He was directed to submit his written
explanation within forty-eight (48) hours. On August 17, 2001, Caboteja was
terminated for the offenses of disregard of company rules and regulations and
rude attitude to supervisors. On August 27, 2001, he filed a complaint for illegal
dismissal against BMA. 3
On various dates thereafter, BMA agreed to a settlement with some of the
complainants in the case 4 for underpayment of wages. 5 Eleven of the present
petitioners executed quitclaims and releases in favor of BMA and Eusebio in the
presence of DOLE district officers. BMA refused to settle the claim of other
complainants.
On September 13, 2001, petitioners Joan Erico Dumalagan and Ronaldo
Salvador were also terminated for failure to perform their job responsibilities. On
September 17, 2001, Dumalagan and Salvador filed complaints for illegal
dismissal against BMA. 6
DIEACH
only the owner of the warehouse and equipment used by BMA, it was their true
employer. The manner and means by which they performed their work were
controlled by SMC through its Sales Logistic Coordinator who was overseeing
their performance everyday.
Private respondents BMA and Eusebio countered that petitioners Caboteja,
Dumalagan, and Salvador were validly and justly dismissed. They were among
the eleven who already signed quitclaims and releases before the DOLE district
office after receiving an amount in settlement of their claims. As for the rest of
petitioners (36 complainants), there was no illegal dismissal to speak of. Said
employees simultaneously did not go back to work for no apparent reason on
October 18, 2001.
Private respondent SMC maintained that it had no employer-employee
relationship with petitioners who were hired and supervised exclusively by BMA
pursuant to a warehousing and delivery agreement in consideration of a fixed
monthly fee. SMC argued that BMA is a legitimate and independent contractor,
duly registered with the Securities and Exchange Commission (SEC) as a
separate and distinct corporation with substantial capitalization, investment,
equipment, and tools. It submitted documentary evidence proving that BMA
engaged the services of petitioners, paid for their wages and benefits, and
exercised exclusive control and supervision over them.
SMC showed that under their contract, BMA provided delivery trucks, drivers, and
helpers in the storage and distribution of SMC products. On a day-to-day basis,
after the routes were made by SMC salesmen, they would book the orders they
obtained. In turn, BMA's Schedular Planner, detailed at the Pasig Warehouse,
downloaded these booked orders from the computer and processed the
necessary documents to be forwarded to the Warehouse Checker, also an
employee of BMA. SMC contended that petitioners were dismissed by BMA for
staging a two-hour strike without complying with the mandatory requirements for
a valid strike. As a result, BMA had to come up with ways and means in order to
avoid the disruption of delivery operations.
SECHIA
are
solidarily
held
liable
to
pay
the
TEIHDa
respondents,
hence,
no
liability
for
backwages.
However,
The NLRC found that petitioners Caboteja, Dumalagan, and Salvador were
separated from their jobs for just and valid causes. They were given the
opportunity to explain their sides. As for the quitclaims previously executed by the
other petitioners, the NLRC ruled that these were sufficient basis to release
respondent BMA from liability.
With respect to the first and second assigned errors, the records show
that complainants Elmer Caboteja, Erico "Jojo" Dumalagan and Ronaldo
Salvador were separated from their jobs for just and valid causes and
after they were given the chance to explain their sides. Copies of
memoranda were served upon them advising their violation of company
rules and regulations and rude attitude and disrespect to superiors and
disrespect to superiors in the case of Caboteja and failure to perform
duties and responsibilities in the case of Dumalagan and Salvador. They
were asked to explain and finding their explanations unacceptable,
respondents dismissed them. Hence, they are not entitled to separation
pay.
TCSEcI
CA Disposition
Aggrieved, petitioners filed a Rule 65 petition with the CA. The following grounds
were interposed: (1) that the NLRC gravely abused its discretion in holding that
Caboteja, Dumalagan, and Salvador were validly dismissed; (2) that the other
petitioners were not dismissed but were guilty of abandonment; and (3) that the
quitclaims executed by eleven of the petitioners barred the complaint for illegal
dismissal. 12
On April, 15, 2005, the CA denied the petition, affirming in full the NLRC
disposition, thus:
WHEREFORE, premises considered, the present petition is hereby
DENIED DUE COURSE and accordingly DISMISSED, for lack of merit.
The assailed Decision dated December 19, 2003 and Resolution dated
July 20, 2004 of the National Labor Relations Commission in the
consolidated cases, NLRC Case No. CN 08-04522-01-CA No. 03685603 (NLRC NCR North Sector Case Nos. 08-04522-2001, 09-049412001, 00-11-05023-2001, 00-11-05969-2001, 11-01-00450-2002, 0200934-2002,
12-06288-2001,
and
12-06320-2001),
are
hereby
In ruling against petitioners, the CA found that the NLRC committed no reversible
error or grave abuse of discretion in ruling that petitioners were not illegally
dismissed but actually refused to report back to work after staging a surprise
stoppage that paralyzed respondent BMA's business operations at the Pasig
warehouse on October 18, 2001.
Issues
Undaunted, petitioners resorted to this review on certiorari, anchored on the
following grounds:
The CA committed a serious legal error in not ruling that respondent San
Miguel
Corporation (principal
of
respondent
BMA
Philasia), and
San
Miguel
Corporation
was
petitioners'
real
employer despite the fact that respondent BMA Philasia was not duly
registered with the DOLE and caused the workers to perform tasks
directly related to the business of respondent San Miguel Corporation
and under the latter's supervision.
The CA committed a legal error and acted with grave abuse of
discretion in holding that petitioners Elmer Caboteja, Joan Erico
Dumalagan, and Ronaldo Salvador were not illegally dismissed from
their jobs, despite a previous ruling of the Labor Arbiter to the contrary.
The CA committed a serious legal error in not awarding damages, at the
very least, to petitioners Joan Erico Dumalagan, and Ronaldo Salvador
for violation of their right to due process.
EHaASD
The CA seriously committed an error of law in holding that the rest of the
petitioners abandoned their jobs and were not dismissed therefrom,
contrary to the findings of the Labor Arbiter who heard the
case. 14(Underscoring supplied)
Our Ruling
Petitioners argue mainly that their employer is, in fact, respondent SMC, not
respondent BMA. They contend that BMA is a labor-only contractor and SMC, as
their true employer, should be held directly liable for their money claims.
A finding that a contractor is a "labor-only" 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. 15
Both the Labor Arbiter and the NLRC found that the employment contracts of
petitioners duly prove that an employer-employee relationship existed between
petitioners and BMA. We hasten to add that the existence of an employeremployee relationship is ultimately a question of fact and the findings by the
Labor Arbiter and the NLRC on that score shall be accorded not only respect but
even finality when supported by ample evidence. 16
In its ruling, the NLRC considered the following elements to determine the
existence of an employer-employee relationship: (1) the selection and
engagement of the workers; (2) power of dismissal; (3) the payment of wages by
whatever means; and (4) the power to control the worker's conduct.
17
All four
elements were found by the NLRC to be vested in BMA. This NLRC finding was
affirmed by the CA:
HCITDc
18
HaAIES
October 18, 2001 to further press their demands for payment of their
money claims. At this time, the labor standards case was already
pending with the DOLE District Office and petitioners could have availed
of said proceedings with the intervention of DOLE officials. Instead,
however, they resorted to an illegal stoppage of work that paralyzed the
business operations of BMA. As aptly noted by the NLRC, there is simply
no probable or logical reason for private respondent BMA to
simultaneously dismiss its workers that will disrupt business operations
at the warehouse. Under the factual circumstances, it clearly appears
that petitioners refused to report back to their work in order to force their
employer BMA to give in to their immediate demand for the salary
differentials and unpaid benefits subject of their complaint with the
DOLE. Hence, BMA cannot be held liable for illegal dismissal.
While it is true that the defense of abandonment may not be given
credence or is negated by the immediate filing of illegal dismissal cases
by the affected employees, records clearly reveal that as of October 18,
2001, petitioners without justifiable cause failed and refused to report
back to their work. Their claim of having been prevented from entering
the work premises was not given due weight for no particulars was even
alleged by them in their report back to their jobs, who prevented their
entry to the company premises and details as to what steps they took to
bring the matter to the attention of DOLE District Office wherein their
complaint
for
labor
standards
violation
was
already
20
22
In the
case under review, the quitclaims and releases signed by petitioners stated:
HIAEcT
WHEREFORE, the petition is DENIED and the assailed Decision of the Court of
Appeals AFFIRMED.
EaIcAS
SO ORDERED.
Puno, C.J., * Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.
|||
(Aklan v. San Miguel Corp. , G.R. No. 168537, [December 11, 2008], 594 PHIL
344-361)
SECOND DIVISION
[G.R. No. 195466. July 2, 2014.]
ARIEL L. DAVID, doing business under the name and style
"YIELS HOG DEALER", petitioner, vs. JOHN G.
MACASIO, respondent.
DECISION
BRION, J :
p
We resolve in this petition for review on certiorari 1 the challenge to the November
22, 2010 decision 2 and the January 31, 2011 resolution 3 of the Court of
Appeals (CA) in CA-G.R. SP No. 116003. The CA decision annulled and set
aside
the
May
26,
2010
decision 4 of
the
National
Labor
Relations
Commission (NLRC) 5 which, in turn, affirmed the April 30, 2009 decision 6 of the
Labor Arbiter (LA). The LA's decision dismissed respondent John G. Macasio's
monetary claims.
The Factual Antecedents
TDAcCa
Macasio disputed David's allegations. 11 He argued that, first, David did not start
his business only in 2005. He pointed to the Certificate of Employment
12
that
David issued in his favor which placed the date of his employment, albeit
erroneously, in January 2000. Second, he reported for work every day which the
payroll or time record could have easily proved had David submitted them in
evidence.
Refuting Macasio's submissions, 13 David claims that Macasio was not his
employee as he hired the latter on"pakyaw" or task basis. He also claimed that he
issued the Certificate of Employment, upon Macasio's request, only for overseas
employment
purposes.
He
pointed
to
the "Pinagsamang
Sinumpaang
16
observed that David did not require Macasio to observe an eight-hour work
schedule to earn the fixed P700.00 wage; and that Macasio had been performing
a non-time work, pointing out that Macasio was paid a fixed amount for the
completion of the assigned task, irrespective of the time consumed in its
performance. Since Macasio was paid by result and not in terms of the time that
he spent in the workplace, Macasio is not covered by the Labor Standards laws
on overtime, SIL and holiday pay, and 13th month pay under the Rules and
Regulations Implementing the 13th month pay law. 18
19
August 11, 2010 resolution, 20prompting Macasio to elevate his case to the
CA via a petition for certiorari. 21
The CA's Ruling
In
its
November
22,
2010
decision, 22 the
CA
partly
granted
Macasio's certiorari petition and reversed the NLRC's ruling for having been
rendered with grave abuse of discretion.
While the CA agreed with the LA and the NLRC that Macasio was a task basis
employee, it nevertheless found Macasio entitled to his monetary claims following
the doctrine laid down in Serrano v. Severino Santos Transit. 23The CA explained
that as a task basis employee, Macasio is excluded from the coverage of holiday,
SIL and 13th month pay only if he is likewise a "field personnel." As defined
by the Labor Code, a "field personnel" is one who performs the work away from
the office or place of work and whose regular work hours cannot be determined
with reasonable certainty. In Macasio's case, the elements that characterize a
"field personnel" are evidently lacking as he had been working as a butcher at
David's "Yiels Hog Dealer" business in Sta. Mesa, Manila under David's
supervision and control, and for a fixed working schedule that starts at 10:00
p.m.
aTICAc
Accordingly, the CA awarded Macasio's claim for holiday, SIL and 13th month pay
for three years, with 10% attorney's fees on the total monetary award. The CA,
however, denied Macasio's claim for moral and exemplary damages for lack of
basis.
David filed the present petition after the CA denied his motion for
reconsideration 24 in the CA's January 31, 2011 resolution. 25
The Petition
In this petition, 26 David maintains that Macasio's engagement was on
a "pakyaw" or task basis. Hence, the latter is excluded from the coverage of
holiday, SIL and 13th month pay.
27
never had any control over the manner by which Macasio performed his work and
he simply looked on to the "end-result." He also contends that he never
compelled Macasio to report for work and that under their arrangement, Macasio
was at liberty to choose whether to report for work or not as other butchers could
carry out his tasks. He points out that Solano and Antonio had, in fact, attested to
their (David and Macasio's) established "pakyawan" arrangement that rendered a
written contract unnecessary. In as much as Macasio is a task basis employee
who is paid the fixed amount of P700.00 per engagement regardless of the time
consumed in the performance David argues that Macasio is not entitled to the
benefits he claims. Also, he posits that because he engaged Macasio
on "pakyaw" or task basis then no employer-employee relationship exists
between them.
Finally, David argues that factual findings of the LA, when affirmed by the NLRC,
attain finality especially when, as in this case, they are supported by substantial
evidence. Hence, David posits that the CA erred in reversing the labor tribunals'
findings and granting the prayed monetary claims.
The Case for the Respondent
Macasio counters that he was not a task basis employee or a "field personnel" as
David would have this Court believe. 28 He reiterates his arguments before the
lower tribunals and adds that, contrary to David's position, the P700.00 fee that
he was paid for each day that he reported for work does not indicate
a "pakyaw" or task basis employment as this amount was paid daily, regardless
of the number or pieces of hogs that he had to chop. Rather, it indicates a dailywage method of payment and affirms his regular employment status. He points
out that David did not allege or present any evidence as regards the quota or
number of hogs that he had to chop as basis for the"pakyaw" or task basis
payment; neither did David present the time record or payroll to prove that he
worked for less than eight hours each day. Moreover, David did not present any
contract to prove that his employment was on task basis. As David failed to prove
the alleged task basis or "pakyawan" agreement, Macasio concludes that he was
David's employee.
Procedurally, Macasio points out that David's submissions in the present petition
raise purely factual issues that are not proper for a petition for review
on certiorari. These issues whether he (Macasio) was paid by result or
on"pakyaw" basis; whether he was a "field personnel"; whether an employeremployee relationship existed between him and David; and whether David
exercised control and supervision over his work are all factual in nature and
are, therefore, proscribed in a Rule 45 petition. He argues that the CA's factual
findings bind this Court, absent a showing that such findings are not supported by
the evidence or the CA's judgment was based on a misapprehension of facts. He
adds that the issue of whether an employer-employee relationship existed
between him and David had already been settled by the LA
29
and the
NLRC 30 (as well as by the CA per Macasio's manifestation before this Court
dated November 15, 2012), 31 in his favor, in the separate illegal case that he filed
against David.
TaDAHE
The Issue
The issue revolves around the proper application and interpretation of the labor
law provisions on holiday, SIL and 13th month pay to a worker engaged
on "pakyaw" or task basis. In the context of the Rule 65 petition before the CA,
the issue is whether the CA correctly found the NLRC in grave abuse of
discretion in ruling that Macasio is entitled to these labor standards benefits.
The Court's Ruling
We partially grant the petition.
Preliminary considerations: the
Montoya ruling and the factualissue-bar rule
In this Rule 45 petition for review on certiorari of the CA's decision rendered
under a Rule 65 proceeding, this Court's power of review is limited to resolving
matters pertaining to any perceived legal errors that the CA may have committed
in issuing the assailed decision. This is in contrast with the review for
jurisdictional errors, which we undertake in an original certiorari action. In
reviewing the legal correctness of the CA decision, we examine the CA decision
based on how it determined the presence or absence of grave abuse of
discretion in the NLRC decision before it and not on the basis of whether the
NLRC decision on the merits of the case was correct.
32
relation
to
Article
97
(6),
Article
101
36
of the
Labor
Code speaks of workers paid by results or those whose pay is calculated in terms
of the quantity or quality of their work output which includes"pakyaw" work and
other non-time work.
More importantly, by implicitly arguing that his engagement of Macasio
on "pakyaw" or task basis negates employer-employee relationship, David would
want the Court to engage on a factual appellate review of the entire case to
determine the presence or existence of that relationship. This approach however
is not authorized under a Rule 45 petition for review of the CA decision rendered
under a Rule 65 proceeding.
EcDATH
First, the LA and the NLRC denied Macasio's claim not because of the absence
of an employer-employee but because of its finding that since Macasio is paid
on pakyaw or task basis, then he is not entitled to SIL, holiday and 13th month
pay. Second, we consider it crucial, that in the separate illegal dismissal case
Macasio filed with the LA, the LA, the NLRC and the CA uniformly found the
existence of an employer-employee relationship. 37
In other words, aside from being factual in nature, the existence of an employeremployee relationship is in fact a non-issue in this case. To reiterate, in deciding
a Rule 45 petition for review of a labor decision rendered by the CA under 65, the
narrow scope of inquiry is whether the CA correctly determined the presence or
absence of grave abuse of discretion on the part of the NLRC. In concrete
question form, "did the NLRC gravely abuse its discretion in denying Macasio's
claims simply because he is paid on a non-time basis?"
At any rate, even if we indulge the petitioner, we find his claim that no employeremployee relationship exists baseless. Employing the control test, 38 we find that
such a relationship exist in the present case.
Even
factual
review
shows
that
hog meats given to him for the day's task. Also, David would still engage
Macasio's services and have him report for work even during the days when only
few hogs were delivered for butchering.
CDHAcI
Under this overall setup, all those working for David, including Macasio, could
naturally be expected to observe certain rules and requirements and David would
necessarily exercise some degree of control as the chopping of the hog meats
would be subject to his specifications. Also, since Macasio performed his tasks at
David's workplace, David could easily exercise control and supervision over the
former. Accordingly, whether or not David actually exercised this right or power to
control is beside the point as the law simply requires the existence of this power
to control 42
43
45
completed, the worker receives a fixed amount as wage, without regard to the
standard measurements of time generally used in pay computation.
In Macasio's case, the established facts show that he would usually start his work
at 10:00 p.m. Thereafter, regardless of the total hours that he spent at the
workplace or of the total number of the hogs assigned to him for chopping,
Macasio would receive the fixed amount of P700.00 once he had completed his
task. Clearly, these circumstances show a "pakyaw" or task basis engagement
that all three tribunals uniformly found.
In sum, the existence of employment relationship between the parties is
determined by applying the "four-fold" test; engagement on "pakyaw" or task
basis does not determine the parties' relationship as it is simply a method of pay
computation. Accordingly, Macasio is David's employee, albeit engaged
on "pakyaw" or task basis.
As an employee of David paid on pakyaw or task basis, we now go to the core
issue of whether Macasio is entitled to holiday, 13th month, and SIL pay.
On the issue of Macasio's
entitlement to holiday, SIL and 13th
month pay
The LA dismissed Macasio's claims pursuant to Article 94 of the Labor Code in
relation to Section 1, Rule IV of theIRR of the Labor Code, and Article 95 of
the Labor Code,as well as Presidential Decree (PD) No. 851. The NLRC, on the
other hand, relied on Article 82 of the Labor Code and the Rules and Regulations
Implementing PD No. 851. Uniformly, these provisions exempt workers paid
on "pakyaw" or task basis from the coverage of holiday, SIL and 13th month pay.
In reversing the labor tribunals' rulings, the CA similarly relied on these
provisions, as well as on Section 1, Rule V of the IRR of the Labor Code and the
Court's ruling in Serrano v. Severino Santos Transit. 46 These labor law
provisions, when read together with the Serrano ruling, exempt those engaged
on "pakyaw" or task basis only if they qualify as "field personnel."
ICTacD
In other words, what we have before us is largely a question of law regarding the
correct interpretation of theselabor code provisions and the implementing rules;
although, to conclude that the worker is exempted or covered depends on the
facts and in this sense, is a question of fact: first, whether Macasio is a "field
personnel"; andsecond, whether those engaged on "pakyaw" or task basis, but
who are not "field personnel," are exempted from the coverage of holiday, SIL
and 13th month pay.
To put our discussion within the perspective of a Rule 45 petition for review of a
CA decision rendered under Rule 65 and framed in question form, the legal
question is whether the CA correctly ruled that it was grave abuse of discretion on
the part of the NLRC to deny Macasio's monetary claims simply because he is
paid on a non-time basis without determining whether he is a field personnel or
not.
To resolve these issues, we need to re-visit the provisions involved.
Provisions governing SIL and holiday pay
Article 82 of the Labor Code provides the exclusions from the coverage of Title I,
Book III of the Labor Code provisions governing working conditions and rest
periods.
Art.
of [Title
I] shall
apply to
Among the Title I provisions are the provisions on holiday pay (under Article 94
of the Labor Code) and SIL pay (under Article 95 of the Labor Code). Under
Article 82, "field personnel" on one hand and "workers who are paid by results"
on the other hand, are not covered by the Title I provisions. The wordings of
Article 82 of the Labor Codeadditionally categorize workers "paid by results" and
"field personnel" as separate and distinct types of employees who are exempted
from the Title I provisions of the Labor Code.
The pertinent portion of Article 94 of the Labor Code and its corresponding
provision in the IRR 47 reads:
Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular
daily wage during regular holidays, except in retail and service
establishments regularly employing less than (10) workers[.] [emphasis
ours]
xxx xxx xxx
SECTION 1. Coverage. This Rule shall apply to all employees except:
xxx xxx xxx
(e) Field
employees
whose
time
and
On the other hand, Article 95 of the Labor Code and its corresponding
provision in the IRR 48 pertinently provides:
Art. 95. Right to service incentive. (a) Every employee who has
rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the
benefit herein provided, those enjoying vacation leave with pay of at
least five days and those employed in establishments regularly
DaCEIc
Under these provisions, the general rule is that holiday and SIL pay provisions
cover all employees. To be excluded from their coverage, an employee must be
one of those that these provisions expressly exempt, strictly in accordance with
the exemption.
Under the IRR, exemption from the coverage of holiday and SIL pay refer to "field
personnel and other employees whose time and performance is unsupervised by
the employer including those who are engaged on task or contract basis[.]" Note
that unlike Article 82 of the Labor Code, the IRR on holiday and SIL pay do not
exclude employees "engaged on task basis" as a separate and distinct category
from employees classified as "field personnel." Rather, these employees are
altogether merged into one classification of exempted employees.
Because of this difference, it may be argued that the Labor Code may be
interpreted to mean that those who are engaged on task basis, per se, are
excluded from the SIL and holiday payment since this is what the Labor
Codeprovisions, in contrast with the IRR, strongly suggest. The arguable
interpretation of this rule may be conceded to be within the discretion granted to
the LA and NLRC as the quasi-judicial bodies with expertise on labor matters.
HDTSCc
The Autobus ruling was in turn the basis of Serrano v. Santos Transit which
the CA cited in support of granting Macasio's petition.
In Serrano, the Court, applying the rule on ejusdem generis 50 declared
that "employees
engaged
on
task
or
contract
basis .
. are
not
does
not
fall
under
the
DSAICa
Note that unlike the IRR of the Labor Code on holiday and SIL pay, Section 3 (e)
of the Rules and Regulations Implementing PD No. 851 exempts employees
"paid on task basis" without any reference to "field personnel." This could only
mean that insofar as payment of the 13th month pay is concerned, the law did not
intend to qualify the exemption from its coverage with the requirement that the
task worker be a "field personnel" at the same time.
WHEREFORE, in light of these considerations, we hereby PARTIALLY
GRANT the petition insofar as the payment of 13th month pay to respondent is
concerned. In all other aspects, we AFFIRM the decision dated November 22,
2010 and the resolution dated January 31, 2011 of the Court of Appeals in CAG.R. SP No. 116003.
SO ORDERED.
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