Coca-Cola Bottlers Philippines, Inc. v. Aguilar, Jr.

FIRST DIVISION

[G.R. No. 200968. June 30, 2021.]

COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner,vs. PABLO T. AGUILAR, JR., ET AL., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedJune 30, 2021which reads as follows:

"G.R. No. 200968 (COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner, v. PABLO T. AGUILAR, JR., ET AL., respondents). — This refers to a Petition for Review on Certiorari1 from the Decision 2 dated October 28, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 114646, which reversed and set aside the Resolutions dated December 16, 2009 3 and February 26, 2010 4 of the National Labor Relations Commission (NLRC) Third Division in NLRC LAC No. 11-002915-09 affirming the Decision of the Labor Arbiter 5 in NLRC NCR Case Nos. 00-09-13149-08, 00-10-15191-08, and 00-10-15252-08 which dismissed Pablo T. Aguilar Jr., Melindo P. Ereneo, Edgar T. Lada, and Alexandro C. Munar's (collectively, respondents) complaint for illegal dismissal against Coca-Cola Bottlers Philippines, Inc. (CCBPI).

The Facts

Respondents commonly alleged that they were direct hires of CCBPI on various dates from 1985 to 1993 as route helpers. 6 They were tasked to distribute CCBPI products to stores and customers in their designated areas. 7 Further, they claimed that they worked under the direct supervision of CCBPI's route supervisors. They likewise averred that their position as route helpers are regular positions and part of CCBPI's plantilla of operations. 8

Respondents also narrated that after they became regular employees by operation of law, they were transferred to Jerome Padilla's Interserve Management & Manpower Resources, Inc. (Interserve) purportedly to deny them their regular employment status with CCBPI. 9 In addition, respondents claimed that in an inspection of CCBPI's premises, the Department of Labor and Employment (DOLE), through its Inspection Division, declared that as route helpers, they were regular employees of CCBPI. 10 The DOLE likewise ordered the CCBPI to pay respondents their underpaid wages and benefits. 11 The respondents brought the DOLE Order to the National Conciliation and Mediation Board (NCMB) to facilitate payment. 12 In April 2004, conciliation and mediation proceedings were held. 13 The respondents received their award, i.e., ECOLA and vacation and sick leave benefits. 14 For that, they executed their respective Release, Waiver and Quitclaims before the NCMB Director. 15 However, as the principal issues on reinstatement and payment of CBA benefits as well as the matter of respondents' employment status were deferred resolution, the parties mutually agreed that said issues be referred to the NLRC for arbitration. 16

In the latter part of 2005, respondents were dismissed from their jobs. 17 Respondents opined that their dismissals were made in the guise of expiration of service contract. 18 CAIHTE

For its part, CCBPI denied the existence of employer-employee relationship with the respondents and alluded to their Contract for Substitute or Reliever Services with Interserve. 19 According to CCBPI, the said service contract constituted legitimate job contracting, given that the Interserve is a licensed independent contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary to conduct its business. 20 CCBPI also alleged that respondents were employees of Interserve as the latter was the one that hired the respondents, paid their wages, and exercised control over them. 21 CCBPI further claimed that the issues raised by respondents were already settled amicably as evidenced by the Release, Waiver and Quitclaims they executed. 22

Interserve, on the other hand, averred that it is a legitimate job contractor whose continued operation is dependent upon the contracts secured from its clients. 23 It claimed that respondents' employment is merely contractual in character and that they are not regarded as regular employees of Interserve as it cannot ensure employment of respondents apart from the contractual relationship it has with its clients. 24

In 2008, respondents filed before the Labor Arbiter their respective complaints for reinstatement with full backwages and payment of moral and exemplary damages and attorney's fees. 25 The complaints were later consolidated. On March 10, 2009, respondents filed an Amended Complaint and/or Position Paper to include non-payment of CBA/company policy benefits in addition to their original complaints against CCBPI. 26

Labor Arbiter Ruling

The Labor Arbiter ruled that Interserve, not CCBPI, is the true employer of the respondents being a legitimate job contractor. It denied respondents' money claims for being barred by prescription in accordance with Article 291 of the Labor Code and ultimately dismissed their complaints for lack of merit. 27 The dispositive portion of the Decision states:

WHEREFORE, the consolidated complaint is hereby dismissed for lack of merit.

SO ORDERED. 28

NLRC Ruling

The NLRC affirmed the ruling of the Labor Arbiter and dismissed respondents' appeal. It held that the respondents are employees of Interserve and their termination was based on the expiration of the fixed period of their employment. 29 The dispositive portion of the decision states:

WHEREFORE, premises considered, the instant appeal is DISMISSED for lack of merit. The Decision appealed from is AFFIRMED.

SO ORDERED. 30

The respondents filed a Motion for Reconsideration which was later denied by the NLRC in its February 26, 2010 Resolution. 31

CA Ruling

The respondents filed a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure before the CA. As a result, the CA in resolving the petition, ruled that Interserve is a labor-only contractor and shall not be deemed the true employer of the respondents. 32 Taking into consideration that respondents were performing work of regular employees and not the purported contractor's independent, discreet and separable activities, 33 CCBPI is the true employer of the respondents. The CA also found that respondents are regular employees of CCBPI as they were under its supervision and control. Being route helpers, respondents are components of sales and distribution operations of CCBPI, which is undeniably under its direct control. 34

Corollarily, respondents cannot be dismissed except for just or authorized causes. According to the CA, no cause, just or authorized, were alleged or proven to exist in this case. Moreover, there was no compliance to the twin requirements of due process, i.e., notice and hearing, prior to respondents' dismissal. 35

The CA ruled that as illegally dismissed employees, respondents are entitled to reinstatement with full backwages, inclusive of allowances, and to their other benefits computed from the time their compensations were withheld from them up to the time of their actual reinstatement, as mandated under Article 279 of the Labor Code. 36

As to respondents' money claims, the CA resolved to deny the same. It held that the Release, Waiver and Quitclaim signed by the respondents are proof that these claims have been amicably settled. 37

As to the money claims for any subsequent liabilities that CCBPI and Interserve might have incurred after respondents signed the Release, Waiver and Quitclaim but prior to their dismissal, the same were still denied for being filed beyond the prescriptive period under Article 291 of the Labor Code. 38

Anent their claim for attorney's fees, the CA ruled that respondents are entitled thereto because they were compelled to litigate to protect their interest. 39

Hence, this petition.

Issues

1. Whether Interserve is a job-only contractor.

2. Whether respondents are regular employees of CCBPI.

3. Whether the Release, Waiver and Quitclaim executed by the respondents barred the case for illegal dismissal. DETACa

4. Whether the respondents were illegally dismissed by CCBPI and are therefore entitled to reinstatement, backwages, and attorney's fees. 40

The Ruling of this Court

The petition has no merit.

This Court has ruled time and again that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence. 41 However, as an exception, the appellate court may examine and measure the factual findings of the NLRC if the same are not supported by substantial evidence. The Court has not hesitated to affirm the appellate court's reversals of the decisions of labor tribunals if they are not supported by substantial evidence. 42

I. Interserve as a job-only contractor

To resolve this case, there must be a categorical determination of Interserve's true status as a job contractor. 43

At this juncture, this Court deems it necessary to give emphasis that there are two instances of job contracting identified under the Labor Code, namely: 1. legitimate job-contracting; and 2. labor-only contracting, which is a prohibited act. 44

Article 106 of the Labor Code describes the relations which may arise between an employer, a contractor, and the contractor's employees, thus:

ART. 106. Contractor or subcontracting. — 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 the 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. (Emphasis supplied)

In Fonterra Brands Phils., Inc. v. Largado, et al., 45 legitimate job-contracting and labor-only contracting were defined in this wise:

A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:

1. The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof;

2. The contractor or subcontractor has substantial capital or investment; and

3. The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits.

On the other hand, contracting is prohibited when the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal and if any of the following elements are present, thus:

1. The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or

2. The contractor does not exercise the right to control over the performance of the work of the contractual employee. 46 (Citations omitted)

In the present case, respondents claimed that they were directly hired by CCBPI as route helpers tasked to distribute its products to their customers 47 but were transferred to Interserve; 48 that they were under the direct supervision of CCBPI route supervisors; that as route helpers, they were declared as regular employees of CCBPI by DOLE, through its inspection Division; 49 and that they use the trucks and equipment of CCBPI to carry out their work. 50

On the other hand, CCBPI alleged that the service contract with Interserve which involved the respondents constituted a legitimate job contracting as Interserve is a licensed independent contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary in the conduct of its business. 51 Respondents having been hired, paid, and controlled by Interserve were therefore employees thereof. 52 aDSIHc

Although CCBPI claimed that Interserve is a legitimate contractor, being duly registered with the DOLE, and that it substantial capital or investment in the form of tools, equipment, machineries, and work premises, this Court cannot conclude Interserve is indeed one.

In Coca-Cola Bottlers Phils., Inc. v. Agito, et al., 53 the Court stated that it "does not set an absolute figure for what it considers substantial capital for an independent job contractor, but it measures the same against the type of work which the contractor is obligated to perform for the principal." 54

As correctly observed by the CA, CCBPI presented in evidence Interserve's Balance Sheet, Income Statement and Annual Tax Return to show that it has a total capitalization of P21,658,220.26 and total assets of P27,509,716.32 with accumulated retained earnings of P21,033,220.26 as of December 31, 2006 to prove that Interserve has sufficient capital and investment. 55 The Balance Sheet and Income Statement are documents which are solely accomplished by Interserve and as such are easily considered as self-serving documents. 56 As to the Annual Tax Return, the same reflects Interserve's payment of income tax and is not conclusive proof of Interserve's capitalization or investment. 57 It could have been different if CCBPI could have "simply provided the courts with records showing the deliveries that were undertaken by Interserve x x x, the type and number of equipment necessary for such task, and the valuation of such equipment. Absent evidence which a legally compliant company could have easily provided, the Court will not presume that Interserve had sufficient investment in service vehicles and equipment, especially since respondents' allegation that they were using equipment, such as forklifts and pallets belonging to petitioner, to carry out their jobs was uncontroverted."58

As observed during the review of this case, the situation is similar with that of the parties in Quintanar, et al. v. Coca-Cola Bottlers Philippines, Inc., 59 Interserve, pursuant to its Service Agreement with CCBPI, shall perform delivery services of soft drinks and beverage products. CCBPI could have shown that Interserve had substantial capital and investments which relate to the job, work or service to be performed, which is a good indicator to prove that Interserve has an independent business.

Clearly, under Article 106 of the Labor Code; as well as Section 5 (1) of the Rules Implementing Articles 106-109 of the Labor Code, as amended. Interserve had no substantial capital or investment in the form of tools, equipment, machineries, and work premises and that respondents performed work which was directly related to the principal business of CCBPI. Evidently, Interserve falls under the definition of a labor-only contractor.

II. CCBPI is the real employer of the respondents

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. 60

Verily, the finding that Interserve is a labor-only contractor means that it only served as a mere agent of CCBPI and therefore, there exists an employer-employee relationship between CCBPI and the respondents. Hence, CCBPI, not Interserve, is the real employer of the respondents.

III. Respondents are regular employees

A review of our jurisprudence on this matter readily revealed that the issue regarding the characterization of the relationship between route helpers and CCBPI is no longer a novel one. 61

In Quintanar, et al. v. Coca-Cola Bottlers Philippines, Inc., 62 this Court summarized the cases wherein it struck down the defense of CCBPI that route helpers are temporary employees. As this Court now reiterates its ruling on the matter, let Us remember the summary of the cases.

In Magsalin v. National Organization of Workingmen, 63 this Court in resolving the matter cited Article 280 64 of the Labor Code and applied the same —

Even while the language of law might have been more definitive, the clarity of its spirit and intent, i.e., to ensure a "regular" worker's security of tenure, however, can hardly be doubted. In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a fact that can be assessed by looking into the nature of the services rendered and its relation to the general scheme under which the business or trade is pursued in the usual course. It is distinguished from a specific undertaking that is divorced from the normal activities required in carrying on the particular business or trade. But, although the work to be performed is only for a specific project or seasonal, where a person thus engaged has been performing the job for at least one year, even if the performance is not continuous or is merely intermittent, the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the employer. The employment of such person is also then deemed to be regular with respect to such activity and while such activity exists.

The argument of petitioner that its usual business or trade is softdrink manufacturing and that the work assigned to respondent workers as sales route helpers so involves merely "postproduction activities," one which is not indispensable in the manufacture of its products, scarcely can be persuasive. If, as so argued by petitioner company, only those whose work are directly involved in the production of softdrinks may be held performing functions necessary and desirable in its usual business or trade, there would have then been no need for it to even maintain regular truck sales route helpers. The nature of the work performed must be viewed from a perspective of the business or trade in its entirety and not on a confined scope.65 (Underscoring supplied, citations omitted)

In Bantolino v. Coca-Cola Bottlers Phils., Inc., 66 the Labor Arbiter, the NLRC and the CA unanimously ruled that route helpers were not simply employees of job-only contractors but rather, those of CCBPI itself. 67

In Pacquing, et al. v. Coca-Cola Bottlers Philippines, Inc., 68 this Court ruled that: ETHIDa

Under the principle of stare decisis et non quieta movere (follow past precedents and do not disturb what has been settled), it is the Court's duty to apply the previous ruling in Magsalin to the instant case. Once a case has been decided one way, any other case involving exactly the same point at issue, as in the case at bar, should be decided in the same manner. Else, the ideal of a stable jurisprudential system can never be achieved. 69

There is no reason for this Court to now reverse the settled rule in Our jurisprudence. The respondents are regular employees of CCBPI.

IV. Dismissed employees entitled to reinstatement and full backwages

Respondents, being regular employees cannot be dismissed except for just or authorized causes. Here, no cause, just or authorized, was ever alleged or proven by CCBPI. What was claimed by CCBPI was that respondents' employment with Interserve was contractual and the contract expired. The expiration of the contract, of course, is not a just or authorized cause under the law to dismiss a regular employee.

As illegally dismissed employees, respondents are entitled to reinstatement to their positions with full backwages computed from the time of dismissal up to the time of actual reinstatement, 70 inclusive of allowances, and to their other benefits computed from the time their compensations were withheld from them up to the time of their actual reinstatement, as mandated under Article 279 71 of the Labor Code.

V. Monetary claims

As to the money claims of the respondents, We affirm the ruling of the appellate court. The Release, Waiver and Quitclaim which the respondents executed after receiving the same are sufficient proof that such monetary claims were already amicably settled. 72

Anent their claims for CBA benefits, the respondents maintained their prayer for it. However, they merely alleged entitlement to it but failed to establish the same as no copy of the said CBA was adduced. The records of this case is bereft of any copy of the CBA, thus, there is no basis for the award or computation of the benefits claimed under it. Basic is the rule that mere allegation is not evidence and is not equivalent to proof. 73

Moreover, the Release, Waiver and Quitclaim was very clear in its wordings —

2. I acknowledge that I have received all amounts that are now, or in the future, may be due me from CCBPI and INTERSERVE. If, hereafter, I am found to be entitled to any other amount, the above consideration shall constitute a full and final satisfaction of any and all such undisclosed claims. I also acknowledge that I have not suffered any illness or injury or indirectly caused or aggravated by my dealings with CCBPI and INTERSERVE. 74

Absent any other proof, it is inferred that the Release, Waiver and Quitclaim included the claims of the respondents for CBA benefits.

VI. Attorney's Fees

Having been forced to litigate to protect their interest, respondents are entitled to the payment of attorney's fees. "It is settled that in actions for recovery of wages or where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney's fees is legally and morally justifiable." 75

Finally, "[s]tare decisis et non quieta movere. This principle of adherence to precedents has not lost its luster and continues to guide the bench in keeping with the need to maintain stability in the law." 76

VII. Interest on all awards

In conformity to prevailing jurisprudence, a legal interest of 6% per annum is imposed on the total judgment award. 77

WHEREFORE, the Decision dated October 28, 2011 of the Court of Appeals in CA-G.R. SP No. 114646 is hereby AFFIRMED with MODIFICATION that the legal interest of six percent (6%) per annum be imposed on the total judgment award, computed from the finality of the Resolution until full payment. cSEDTC

SO ORDERED."

By authority of the Court:

LIBRADA C. BUENADivision Clerk of Court

By:

(SGD.) MARIA TERESA B. SIBULODeputy Division Clerk of Court

 

Footnotes

1.Rollo, pp. 3-51.

2.Id. at 60-78; penned by Associate Justice Jose C. Reyes, Jr. (now a retired Member of this Court), with Associate Justices Ramon M. Bato and Ramon A. Cruz, concurring.

3.Id. at 82-86; penned by Commissioner Pablo C. Espiritu, Jr., with Presiding Commissioner Alex A. Lopez and Commissioner Gregorio O. Bilog III, concurring.

4.Id. at 87-90.

5.Id. at 92-102; penned by Labor Arbiter Patricio Libo-on.

6.Id. at 61.

7.Id.

8.Id. at 93.

9.Id. at 94.

10.Id. at 105.

11.Id.

12.Id.

13.Id.

14.Id. at 62.

15.Id.

16.Id. at 61-62.

17.Id. at 62.

18.Id.

19.Id.

20.Id.

21.Id.

22.Id.

23.Id. at 62-63.

24.Id. at 63.

25.Id.

26.Id.

27.Id. at 99-102.

28.Id. at 102.

29.Id. at 85-86.

30.Id. at 86.

31.Id. at 87-90.

32.Id. at 75.

33.Id.

34.Id.

35.Id.

36.Id. at 75-76.

37.Id. at 76.

38.Id.

39.Id. at 76-77.

40.Id. at 21-22.

41.Philippine Geothermal, Inc. Employees Union (PGIEU), et al. v. Chevron Geothermal Phils. Holdings, Inc., 824 Phil. 426, 439 (2018).

42.Dr. Rio v. Colegio de Sta. Rosa-Makati, et al., 740 Phil. 574, 579 (2014).

43.Rollo, p. 65.

44.Id.

45. 756 Phil. 386 (2015).

46.Id. at 394-395.

47.Rollo, p. 61.

48.Id.

49.Id. at 62.

50.Id. at 70.

51.Id. at 62.

52.Id.

53. 598 Phil. 909 (2009).

54.Id. at 927.

55.Rollo, p. 69.

56.Id.

57.Id. at 70.

58.Quintanar, et al. v. Coca-Cola Bottlers Philippines, Inc., 788 Phil. 385, 405-406 (2016).

59.Id.

60.RNB Garments Philippines, Inc. v. Ramrol Multi-Purpose Cooperative, G.R. Nos. 236331 & 236332, September 14, 2020.

61.Quintanar, et al. v. Coca-Cola Bottlers Philippines, Inc., supra note 58.

62.Id.

63. 451 Phil. 254 (2003).

64. Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

65.Quintanar, et al. v. Coca-Cola Bottlers Philippines, Inc., supra note 58 at 402-403.

66. 451 Phil. 839 (2003).

67.Id. at 843.

68. 567 Phil. 323 (2008).

69.Id. at 340-341.

70.Paragele v. GMA Network, Inc., G.R. No. 235315, July 13, 2020.

71. Art. 279. Security of tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

72.Rollo, p. 76.

73.Morales v. Ombudsman Carpio-Morales, et al., 791 Phil. 539, 555 (2016) citing Agdeppa v. Office of the Ombudsman, 734 Phil. 1, 39 (2014) further citing De Jesus v. Guerrero III, 614 Phil. 520, 529 (2009).

74.Rollo, p. 388.

75.Paragele v. GMA Network, Inc., supra note 73. Citation omitted.

76.Rep. Umali v. The Judicial and Bar Council, 814 Phil. 253, 276 (2017). Citations omitted.

77.Nacar v. Gallery Frames, 716 Phil. 267 (2013).