THIRD DIVISION
[G.R. No. 205123. February 25, 2013.]
DEPARTMENT OF AGRICULTURE-REGIONAL FIELD UNIT NO. 02, REPRESENTED BY REGIONAL DIRECTOR LUCRECIO R. ALVIAR, JR., petitioners,vs.AGUSTIN B. TAGUIBAO, MANUEL MARIGMEN, ARTURO O. CARANGUIAN, AND BERNARD D. BACUD, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution dated February 25, 2013, which reads as follows:
"G.R. No. 205123 (Department of Agriculture-Regional Field Unit No. 02, represented by Regional Director Lucrecio R. Alviar, Jr. vs. Agustin B. Taguibao, Manuel Marigmen, Arturo O. Caranguian, and Bernard D. Bacud).— The Court resolves to:
(1) GRANT petitioner's motion for an extension of fifteen (15) days within which to file a petition for review on certiorari, counted from the expiration of the reglementary period;
(2) INFORM petitioner that its authorized representative may claim from the Cash Disbursement and Collection Division of this Court the excess payment of the prescribed legal fees in the amount of P470.00 under O.R. No. 0063320 dated January 25, 2013; and
(3) EXCLUDE the National Labor Relations Commission as respondent from the title of this case pursuant to Section 4 (a),Rule 45 of the 1997 Rules of Civil Procedure.
This is a petition for certiorari under Rule 45 of the Rules of Court seeking to review the September 30, 2011 Decision 1 and the December 11, 2012 Resolution 2 of the Court of Appeals (CA), in CA G.R. SP No. 101833, affirming the October 31, 2007 Decision 3 of the National Labor Relations Commission (NLRC) which, in turn, affirmed with modification, the May 31, 2006 Decision 4 of the Labor Arbiter (LA),granting the claims for separation pay, unpaid wages and other benefits of respondents Agustin B. Taguibao (Taguibao),Manuel Marigmen (Marigmen),Arturo O. Caranguian (Caranguian),and Bernard Bacud (Bacud).
Respondents Taguibao, Marigmen, Caranguian, and Bacud were former employees of Paredes Security and Watchman Agency (PSWA).They were all employed as security guards assigned to the Department of Agriculture (DOA),Regional Office in Tuguegarao City, Province of Cagayan. cTDaEH
In their individual complaints filed with the LA, the respondents alleged that they were hired by PSWA on varying dates from March 1987 to August 2002. They worked on a 12-hour shift as security guards, except for Bacud who had an 8-hour shift. Respondent Taguibao and Marigmen were paid P155.33 per day, while Caranguian and Bacud were paid a monthly salary of P4,700.00 and P3,332.00, respectively. All of them alleged that they were informed on various dates that PSWA's contract with the DOA had already been terminated and that a new contract had been forged with another security agency. They claimed that they were illegally dismissed on June 30, 2005, except for Bacud who was dismissed in March 2004. In their complaints, they also claimed payment for underpayment of wages, incentive leave pays, holiday pay, overtime pay, and 13th month pay.
Scheduled mandatory conferences failed to effect an amicable settlement due to the non-appearance of representatives of PSWA and the DOA. The parties were required to submit their positions papers. Prior to the filing of their position papers, the respondents amended their complaints to include Richard Paredes and Vincent Paredes, being the owners/general managers of PSWA.
Despite due notice, PSWA and its owners failed to submit their position papers.
In its position paper, the DOA argued that no employer-employee relationship existed between the DOA and the respondents because the subject contract of security had been entered into by and between PSWA and Director Gumersindo Lasam.
On May 31, 2006, the LA ruled that the DOA and PSWA are jointly and severally liable to pay the respondents' separation pay amounting to a total of P99,196.25 and other money claims with a total of P350,281.70.
On appeal to the NLRC, the said decision was affirmed with modification by dropping Gumersindo Lasam as party respondent for lack of factual and legal basis. The NLRC, however, declared that the monetary award was recognized as a claim that the respondents could present to the Commission on Audit (COA) for and against the DOA, but the same was not enforceable by a writ of execution, which could only be enforced against PSWA and its owners, with respect to their solidary liability for the monetary award. EIAHcC
Without filing a motion for reconsideration, the DOA filed a petition for certiorari under Rule 65 with the CA, ascribing grave abuse of discretion on the part of the NLRC and the LA. It contended that it could not be held liable for the claims because there was no employer-employee relationship between it and the respondents. Based on the Contract of Security Services, between the DOA and PSWA, "...the security guards or any person of the agency assigned in the CLIENT's premises are in no sense employees of the CLIENT and the AGENCY agrees to hold the CLIENT free from any liability ...."
Further, the DOA argued that the LA and the NLRC had no jurisdiction over the claims of the employees when the contract did not cover the payment of wages or separation pay. The DOA theorized that it was the ordinary courts which had jurisdiction over the subject matter of the case. PSWA, in turn, could only claim from the DOA when it paid the respondents based on the right of reimbursement of co-debtors in solidary obligations.
In the assailed decision, the CA affirmed the challenged decisions. According to the CA, the DOA could not rely on cases which involved the contracts of service between the principal and the contractor, warranting the ordinary courts to exercise jurisdiction over the case. Here, the subject involved the payment of wages and other monetary benefits in favor of the respondents. There was no longer any issue as to the correctness of the amounts awarded to the respondents. PSWA failed to controvert the claims of the respondents and subsequently, it likewise failed to appeal the decisions of the LA and NLRC.
The main issue was the matter of the DOA's liability as indirect employer. The fact that there was no actual and direct employer-employee relationship between the DOA and the respondents did not absolve the former from liability, pursuant to Articles 106, 107 and 109 of the Labor Code. 5 In this case, the respondents were employees of PSWA and were assigned to the DOA to guard the latter's premises. PSWA failed to pay the statutory minimum wage as well as overtime pay and other benefits to which the respondents were entitled. cSIADa
Hence, this petition.
Indeed, the inexistence of an actual and direct employer-employee relationship between the DOA and the respondents does not absolve the former from liability for the latter's monetary claims. It is the law itself which creates the liability of the principal as an indirect employer for purposes of enforcing the provisions of the Labor Code and other social legislation. Succinctly put, when the DOA contracted the services of the PSWA, the DOA became an indirect employer of the respondents, pursuant to Article 107 of the Labor Code, which reads:
Indirect employer. — The provisions of the immediately preceding article shall likewise apply to 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.
In the same vein, it is likewise the law which fixes solidary liability of the principal with the contractor in the event of any violation of any provision of the Labor Code, including the failure to pay wages, viz.:
Solidary liability. — The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
In Rosewood Processing, Inc. v. NLRC, 6 the Court had the occasion to elucidate on the purpose of imposing this liability on indirect employers:
The joint and several liability of the employer or principal was enacted to ensure compliance with the provisions of the Code, principally those on statutory minimum wage. The contractor or subcontractor is made liable by virtue of his or her status as a direct employer, and the principal as the indirect employer of the contractor's employees. This liability facilitates, if not guarantees, payment of the workers' compensation, thus, giving the workers ample protection as mandated by the 1987 Constitution. This is not unduly burdensome to the employer. Should the indirect employer be constrained to pay the workers, it can recover whatever amount it had paid in accordance with the terms of the service contract between itself and the contractor. DIHETS
In this case, the respondents were employees of PSWA. They were assigned to DOA to guard the latter's premises pursuant to the contract. PSWA failed to pay the statutory minimum wage as well as the overtime pay and other benefits of the employees. Thus, the LA, the NLRC and the CA, all correctly held the petitioner as jointly and severally liable with PSWA. Its liability being solidary with the latter, the DOA cannot insist that it can only be held liable if the direct employer fails to pay the respondents. As an indirect employer, and for purposes of determining the extent of its civil liability, the DOA is deemed the employer of PSWA's employees pursuant to law.
Nevertheless, this does not negate the right of the DOA to proceed against PSWA for reimbursement. Solidary liability does not preclude the application of Article 1217 of the Civil Code on the right of reimbursement from its co-debtor, to wit:
Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded.
When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the debt of each.
WHEREFORE,the Court resolves to DENY the petition for failure to show any reversible error in the challenged judgment as to warrant the exercise of its discretionary jurisdiction, without prejudice to the right of petitioner Department of Agriculture Field Unit No. 02, Tuguegarao City, Cagayan, to seek reimbursement from Paredes Security and Watchman Agency. AEIcTD
SO ORDERED."
Very truly yours,
(SGD.) LUCITA ABJELINA SORIANODivision Clerk of Court
Footnotes
1.Rollo,44-68. Penned by Associate Justice Danton Q. Bueser and concurred in by Associate Justices Ricardo R. Rosario and Marlene Gonzales-Sison of the Special Ninth Division, Manila.
2.Id. at 30-32.
3.Id. at 93-99.
4.Id. at 117-129.
5.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 subcontractor, if any, shall be paid in accordance with the provisions of this Code.
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 jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.
There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
ART. 107. Indirect employer.— The provisions of the immediately preceding article shall likewise apply to 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.
ART. 109. Solidary liability.— The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
6.352 Phil. 1013 (1998).