FIRST DIVISION
[G.R. No. 214645. June 30, 2021.]
LACSON FARM/AURELIA M. LACSON, petitioner, vs. ROMERO P. BAYOCBOC, ET AL., respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated June 30, 2021which reads as follows:
"G.R. No. 214645 (LACSON FARM/AURELIA M. LACSON, petitioner, v. ROMERO P. BAYOCBOC, ET AL., respondents). — This refers to a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court from the Decision 2 dated October 31, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 03516-MIN, which affirmed the Resolutions dated July 31, 2009 3 and December 29, 2009 4 of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City in NLRC CA No. MAC 02-010671-2009. The said Resolutions granted the appeal taken by Romero P. Bayocboc, Ivan Rose V. Bayocboc, Arnaldo M. Buenaflor, Gilbert V. Bayocboc, Ronald D. Mojado, Joe J. Lorca, Lem D. Mojado, Daniel Lorca, Charlie J. Lorca, Joel Canton, Doroteo L. Henterone, Julito B. Canton, Evel Jan B. Canton, Christopher G. Buenaflor, Amelita V. Bayocboc and Denmark J. Lorca (private respondents) from the Decision of the Labor Arbiter 5 in NLRC RAB-XI-06-00503-08 and NLRC RAB-XI-06-00510-08 which dismissed the consolidated respondents' complaints for illegal dismissal against Lacson Farm/Aurelia Lacson (petitioner).
The Facts
Respondents filed their respective Complaints for Illegal Dismissal with money claims against herein petitioner before the Regional Arbitration of the NLRC. Later, these cases were consolidated. 6
A mandatory conference was conducted before the Labor Arbiter on July 16, 2008. Thereat, all of the respondents appeared while petitioner and a certain Anatolio Bayocboc (Anatolio) who professed that he is a contractor of the respondents were likewise present. 7
On August 6, 2009, the mandatory conference was terminated and the parties were directed to submit their respective position papers. In compliance, the respondents submitted their position paper while petitioner did not file any despite notice. 8
In their position paper, respondents claimed that they were regular sugarcane workers of the Lacson Farm, owned by petitioner and located in Dongan Pekong, Matanao, Davao del Sur. They alleged that they approached the petitioner and requested for an increase in their daily wage. In response, petitioner made them sign a paper containing the words "maayong pagsulod, maayong paggawas" which meant good entry, good exit. Respondents refused to sign the paper. According to the respondents, petitioner dismissed them from employment the very next day. Resultantly, the respondents filed their complaints against the petitioner before the Labor Arbiter. 9
Labor Arbiter Ruling
On November 19, 2008, Labor Arbiter Merceditas C. Larida promulgated a Decision dismissing the respondents' complaints without prejudice to its refiling for their failure to implead a real party in interest. 10 The dispositive portion of the Decision states:
WHEREFORE, the foregoing premises considered, judgment is hereby rendered dismissing the complaint for complainants' failure to implead a real party in interest but without prejudice to its refiling. 11
NLRC Ruling
Respondents filed an appeal before the NLRC on the ground that the Labor Arbiter erred when she ruled that Anatolio is a real party in interest and dismissed without prejudice the complaints for illegal dismissal. 12
The NLRC found the appeal impressed with merit. It ruled that the Labor Arbiter committed grave error in declaring Anatolio as a real party in interest and dismissed the complaints. For the NLRC, the ruling is unsound as it has no sufficient factual grounds to rely on that Anatolio is a real party in interest as the appellees did not state this factual milieu nor did they raise this as an issue. 13 Further, the NLRC ruled that petitioner's failure to submit a position paper despite notice resulted to respondents' allegations as deemed admitted such being uncontroverted nor rebutted. 14 Thus, the NLRC ruled in favor of the respondents. They were declared illegally dismissed from service. As a consequence, petitioner was ordered to pay respondents full backwages and separation pay equivalent to one month salary for every year of service as prayed for in their complaints including salary differential, 13th month pay differential, service incentive leave pay and attorney's fees equivalent to ten percent (10%) of the total judgment award. 15 The dispositive portion of the Decision states:
WHEREFORE, the instant appeal is GRANTED for being meritorious.
Accordingly, respondents-appellees are hereby ordered to pay the complainants-appellants of (a) their full backwages and other benefits computed from the time of their termination up to the actual date of payment of their separation pay in lieu of reinstatement; (b) separation pay, in lieu of reinstatement equivalent to one (1) month salary for every year of service. Further, appellees are ordered to pay each and every complainant the following:
a) Salary differential
b) 13th Month Pay differential
c) Service Incentive Leave pay
The award of attorney's fees shall be computed equivalent to ten (10%) percent of the total judgment award.
All other claims are hereby dismissed for lack of legal and factual basis.
The Fiscal Examiner or the Computation and Examination Unit of this Commission is directed to compute the monetary award as above stated which shall form part of this resolution.
SO ORDERED. 16
Petitioner filed a Motion for Reconsideration which was later denied by the NLRC for lack of merit in its December 29, 2009 Resolution. 17
CA Ruling
The petitioner filed a Petition for Certiorari before the CA. On October 31, 2013, the CA promulgated its assailed Decision. It was held that petitioner was the employer of the respondents; that their dismissal failed to comply with the two-fold due process requirement; and worse, petitioner had none of the authorized causes to dismiss the respondents. 18 The dispositive portion of the decision states:
WHEREFORE, the petition is DISMISSED for lack of merit. We AFFIRM the assailed Resolutions, dated July 31, 2009 and December 29, 2009, of the National Labor Relations Commission, Fifth Division, Cagayan de Oro City.
SO ORDERED. 19
A motion for reconsideration was filed by the petitioner but the NLRC found no substantial arguments in the said motion to warrant modification or reversal of its earlier decision. 20
Hence, this petition.
Issues
1. Did the CA commit grave abuse of discretion amounting to lack or in excess of jurisdiction in affirming the NLRC's Decision and Resolution taking cognizance of the alleged respondents' premature appeal? 21
2. Was petitioner's right to due process violated? 22
3. Was the finding of illegal dismissal wanting of basis? 23
The Ruling of this Court
The petition has no merit.
Grave abuse of discretion is defined as —
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law.
Grave abuse of discretion refers not merely to palpable errors of jurisdiction; or to violations of the Constitution, the law and jurisprudence. It refers also to cases in which, for various reasons, there has been a gross misapprehension of facts. 24 (Citation omitted)
Here, the petitioner is of opinion that the CA committed grave abuse when it affirmed the NLRC which entertained respondents' appeal despite its alleged prematurity.
This Court differs from the petitioner's opinion.
To begin with, the respondents' appeal is not premature. The 2005 NLRC Rules of Procedure, the set of rules applicable at the time of the filing of the respondents' appeal, stated that —
SECTION 2. GROUNDS. — The appeal may be entertained only on any of the following grounds:
a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional Director;
b) If the decision, resolution or order was secured through fraud or coercion, including graft and corruption;
c) If made purely on questions of law; and/or
d) If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage or injury to the appellant.
In the assailed NLRC Decision, it was clearly explained that the Labor Arbiter committed grave abuse of discretion when she ruled to dismiss the complaints for illegal dismissal against the petitioner despite absence sufficient factual grounds to rely on. It is noteworthy at this juncture that petitioner did not state, in any pleading or paper submitted to the Labor Arbiter, that Anatolio is an independent contractor who is the real employer of the respondents nor raised the same as on issue or a defense. 25 The NLRC correctly ruled that the Labor Arbiter, without any position paper, cannot ascertain the true facts of the case. Her own perceived notions cannot be used as basis of a conclusion. Decisions shall be based on proven facts and not on notions or speculations. Furthermore, the Labor Arbiter cannot raise an issue, not being a party litigant nor a lawyer for the petitioner. 26
We agree with the NLRC in its findings. Basic is the principle that decisions shall be rendered stating clearly and distinctly the facts and the law on which it is based. 27 The Labor Arbiter in her Decision ruled that Anatolio appears to be an indispensable party and dismissed the case. This, in truth, is a clear evidence of grave abuse of discretion on the part of the Labor Arbiter as referred to in Section 2, paragraph (a), Rule VI, 2005 NLRC Rules of Procedure. 28 There being a grave abuse of discretion committed by the Labor Arbiter, her decision is appealable to the NLRC and is clearly not premature.
No grave abuse of discretion was committed by the CA when it affirmed the Decision of the NLRC.
Moving on, petitioner claimed that corollary to NLRC's act of entertaining the alleged premature appeal of the respondents, her right to due process was violated. She explained that the reason for non-submission of her position paper is the respondents' failure to implead Anatolio. 29 Petitioner claimed that her strong reliance and good faith to the Decision of the Labor Arbiter may not and cannot, by any stretch of imagination, be used to defeat her constitutional right to due process. 30
The argument lacks merit.
The essence of due process is simply to be heard, or as applied to administrative proceedings, an opportunity to explain one's side, or an opportunity to seek a reconsideration of the action or ruling complained of. 31 It is undeniable that when the parties failed to settle during the mandatory conferences, they were ordered to submit their respective position paper. In compliance, respondents filed their position paper while petitioner did not despite ample opportunity and due notice.
Verily, she was given the opportunity to be heard or to explain her side of the story. Meaning, contrary to her claim that her right to due process was violated, she was afforded her right to due process, however, instead of complying to the order, she just did not. She could have alleged in her position paper that Anatolio was an independent job contractor of the respondents and set the same as her defense. Unfortunately, she did not and claimed that her right to due process was violated.
Corollarily, petitioner's failure to submit her position paper is a waiver of her right to defend herself and Lacson Farm and adduce evidence to thwart or rebut the allegations of the respondents. Resultantly, the allegations of the respondents are deemed admitted by the petitioner. 32
Anent the last issue raised by petitioner, the finding of illegal dismissal was based on the uncontroverted allegations of the respondents.
Respondents claimed that they were illegally dismissed by petitioner. This allegation remained unrebutted as petitioner presented Anatolio's Affidavit only before the CA. Assuming arguendo that Anatolio's Affidavit was considered, petitioner still failed to prove that Anatolio is a legitimate labor contractor.
The outsourcing of services is not prohibited in all instances. In fact, Article 106 33 of the Labor Code of the Philippines provides the legal basis for legitimate labor contracting. 34 This provision is further implemented by DOLE Order No. 18, Series of 2002 (DO 18-02). 35
Legitimate labor contracting refers to —
x x x an arrangement whereby a principal agrees to put out or farm out to a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal, while labor-only contracting, on the other hand, pertains to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. 36
While labor-only contracting under Section 5 of DO 18-02 refers to —
Section 5. Prohibition against labor-only contracting. — Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work or service for a principal, and any of the following elements [is] present:
i) 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
ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee.
There being no evidence adduced to establish that Anatolio had substantial capital to perform the job, work, or service and that he had control over respondents whom were alleged to have been recruited, supplied, or placed to perform activities directly related to his main business which should be distinct and independent from that of petitioner, this Court agrees with the CA that Anatolio is at best a labor-only contractor. 37 It follows then that petitioner is the real employer of the respondents.
Our Constitution, statutes and jurisprudence uniformly guarantee to every employee or worker tenurial security. What this means is that an employer shall not dismiss an employee except for a just or authorized cause and only after due process is observed. 38
Here, respondents alleged that they approached petitioner to request for an increase in their daily wage. They were, however, dismissed by the petitioner for refusing to sign the paper containing the words "maayong pagsulod, maayong paggawas." There was no just or authorized cause for the said dismissal. Moreover, due process was not observed.
In Distribution & Control Products, Inc./Tiamsic v. Santos, it was held that —
As to whether or not respondent was afforded procedural due process, the settled rule is that in termination proceedings of employees, procedural due process consists of the twin requirements of notice and hearing. The employer must furnish the employee with two written notices before the termination of employment can be effected: (1) the first apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the second informs the employee of the employer's decision to dismiss him. x x x 39 (Citations omitted)
In the present case, the records are bereft of any evidence that the respondents were afforded their right to due process before their termination. There was no showing that that they were given sufficient opportunity to contest the legality of their dismissal. 40 None of the required notices were served to them. It is undoubted that respondents' dismissal was illegal.
Respondents, being regular employees cannot be dismissed except for just or authorized causes. Here, no cause, just or authorized, to justify the respondents' dismissal was ever alleged or proven by petitioner. What was claimed by petitioner was that Anatolio was the real employer of the respondents, which, as earlier discussed was never proven nor established.
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, 41 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 42 of the Labor Code as amended by Republic Act No. 6715. However, if reinstatement is no longer feasible, separation equivalent to one month salary for every year of service shall be awarded as an alternative. 43
WHEREFORE, the Decision dated October 31, 2013 of the Court of Appeals in CA-G.R. SP No. 03516-MIN is hereby AFFIRMED.
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo, pp. 3-26.
2.Id. at 45-55; penned by Associate Justice Renato C. Francisco, with Associate Justices Romulo V. Borja and Justice Oscar V. Badelles, concurring.
3.Id. at 31-35; penned by Commissioner Dominador B. Medroso, Jr., with Presiding Commissioner Salic B. Dumarpa and Commissioner Proculo T. Sarmen, concurring.
4.Id. at 42-43.
5.Id. at 28-29; penned by Labor Arbiter Merceditas C. Larida.
6.Id. at 46.
7.Id.
8.Id. at 32.
9.Id. at 46.
10.Id. at 29.
11.Id.
12.Id. at 32.
13.Id. at 32-33.
14.Id.
15.Id. at 34.
16.Id. at 34-35.
17.Id. at 42.
18.Id. at 53.
19.Id. at 55.
20.Id. at 58.
21.Id. at 8.
22.Id.
23.Id. at 9.
24.Neri v. Yu, G.R. No. 230831, September 5, 2018, 879 SCRA 611, 626.
25.Id. at 33.
26.Id.
27. Section 1, Rule 36 of the Rules of Court.
28. Section 2. Raffle and Assignment of Cases. — a) All complaints and petitions filed with the docket unit of the Regional Arbitration Branch shall be immediately raffled and assigned to a Labor Arbiter from receipt thereof.
29.Rollo, pp. 10-11.
30.Id. at 15.
31.Vivo v. Phil. Amusement and Gaming Corporation (PAGCOR), 721 Phil. 34, 39 (2013).
32.Rollo, pp. 32-33.
33.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.
34.Daguinod v. Southgate Foods, Inc., G.R. No. 227795, February 20, 2019.
35.Id.
36.Allied Banking Corporation v. Calumpang, 823 Phil. 1143, 1155 (2018).
37.Rollo, p. 52.
38.Distribution & Control Products, Inc./Tiamsic v. Santos, 813 Phil. 423, 432 (2017).
39.Id. at 436.
40.Rollo, p. 54.
41.Paragele v. GMA Network, Inc., G.R. No. 235315, July 13, 2020.
42. 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.
43.Big AA Manufacturer v. Antonio, 519 Phil. 30, 42 (2006).