Pepsi-Cola Products Philippines, Inc. v. Cabatuan

FIRST DIVISION

[G.R. No. 224328. October 6, 2021.]

PEPSI-COLA PRODUCTS PHILIPPINES, INC., petitioner, vs.RENANTE CABATUAN, DANIEL CAÑON, JR., GENARO PARDILLO, EFREN GENES, STEVE FERNANDEZ AND RICHARD SARNO, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedOctober 6, 2021which reads as follows:

"G.R. No. 224328 (Pepsi-Cola Products Philippines, Inc. v. Renante Cabatuan, Daniel Canon, Jr., Genaro Pardillo, Efren Genes, Steve Fernandez and Richard Sarno). — In this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, petitioner Pepsi-Cola Products Philippines, Inc. (PCPPI) assails the Decision 2 dated August 28, 2015 and Resolution 3 dated April 15, 2016 of the Court of Appeals (CA) Eighteenth (18th) Division in CA-G.R. CEB SP. No. 07862, affirming with modification the Decision 4 dated January 31, 2013 of the National Labor Relations Commission (NLRC), which in turn affirmed the Decision 5 dated September 27, 2012 of the Labor Arbiter (LA). The CA found PCPPI responsible for the illegal dismissal of respondents.

The Antecedents

The present controversy arose from complaints filed on February 2, 2012 by Renante Cabatuan (Cabatuan), Daniel Cañon, Jr. (Cañon, Jr.), Genaro Pardillo (Pardillo), and Steve Fernandez (Fernandez), as well as on February 17, 2012 by Efren Genes (Genes) and Richard Sarno (Sarno)(respondents) against PCPPI, Hytruck Machineries Philippines, Inc. (Hytruck), Roy Roncales, Hytruck's vice president, and Jonel's Trucking Services, Inc. (Jonel's) for illegal dismissal, full backwages, separation pay, if reinstatement was no longer feasible, salary differential, 13th month pay, overtime pay, holiday pay, premium pay for holiday, service incentive leave pay, indemnity pay, moral and exemplary damages, and attorney's fees. 6 AIDSTE

Records revealed that Hytruck employed respondents pursuant to a Contract of Services (Service Contract) it executed with PCPPI. Under this Service Contract, Hytruck was to provide PCPPI with temporary or occasional services from November 1, 2010 to October 31, 2011 consisting of the following:

1) Janitorial services and housekeeping;

2) Yard laborers to encase assorted materials, encase assorted NCB, repack mixed Gatorade, repack NCB/bundle, empty sorting, remove labels, shakedown, etc.;

3) Casual Relievers;

4) Utility Men;

5) Odd jobs for a specified duration;

6) Other miscellaneous/seasonal jobs as required by the company. 7

Accordingly, respondents Cabatuan and Fernandez worked as housekeepers, Pardillo worked as janitor, Cañon, Jr. worked as a sugar operator, and Genes worked as a yard laborer. 8

Respondents assert that while on paper, they were under the employ of Hytruck and Jonels, they were actually employees of PCPPI because the companies engaged in labor-only contracting. Thus, PCPPI should be held solidarily liable with Hytruck and Jonel's for their illegal dismissal. 9

PCPPI denied the allegations and insisted that respondents were employees of Hytruck and Jonel's. PCPPI maintained that it entered into a Forklift Services Agreement (FSA) with Hytruck wherein the latter agreed to provide the former, nine forklift units for a period beginning September 1, 2010 to August 31, 2013. As an incident thereto, Hytruck deployed respondents to PCPPI's premises for the operation, care, and maintenance of said units. When PCPPI pre-terminated the FSA with Hytruck, it entered into another forklift agreement with Jonel's which absorbed the respondents as employees. 10

For its part, while Hytruck recognized its obligations under the FSA, it equally admitted employing respondents pursuant to the Service Contract. Hytruck maintained that it did not dismiss respondents. Their employment simply ended upon expiration of the Service Contract on October 31, 2011.

Even after the expiry of the Service Contract, however, the respondents continued working on PCPPI's premises, this time, as employees of Jonel's, which absorbed them into its workforce. 11 According to Jonel's, it accepted respondents on the condition that they comply with all the employment requirements such as submission of applications, biodatas, and clearances from the National Bureau of Investigation, police, and their respective barangays. Not only did respondents failed to accomplished the same, they also faded one after another, only to file the illegal dismissal case against it later on. 12

On the contrary, respondents maintained that their services were terminated by a certain Jonel Cal of Jonel's on separate dates beginning on January 4, 2012 to February 11, 2012, without observing due process requirements under the law. Hence, their complaints for illegal dismissal. AaCTcI

In its Decision 13 dated September 27, 2012, the LA ruled that while the respondents were not illegally dismissed, they were still considered as regular employees of PCPPI. As such, the LA ordered PCPPI to reinstate them to their former positions without diminution of seniority, salary, and benefits, and to pay them salary differentials, as well as 13th month pay for the period of November 1, 2010 until their alleged date of termination. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the complaints of illegal dismissal against respondents are hereby dismissed for lack of merit.

However, respondents Pepsi Cola, Hytruck and Jonel's Trucking are hereby, jointly and severally, ordered to pay complainants salary differentials computed from November 1, 2010, the effective date of respondent Hytruck's service contract with Pepsi Cola until their alleged dates of termination and their 13th month pay for the same period, as per the computation herewith attached and forming an integral part hereof.

Moreover, complainants are hereby declared as regular employees of respondent Pepsi Cola, thus, respondents Pepsi Cola is hereby ordered to reinstate complainants to their former positions without diminution of seniority, salary, and other benefits. For this purpose, it is ordered to file its COMPLIANCE with this Order within ten (10) days from receipt thereof.

SO ORDERED. 14

On January 31, 2013, the NLRC rendered its Decision 15 and affirmed the ruling of the LA. Thereafter, in its Resolution 16 dated May 20, 2013, the NLRC denied the Motions for Reconsideration of the parties.

Both PCPPI and respondents filed petitions for certiorari before the CA. On the one hand, PCPPI challenged the reinstatement order and the finding that Hytruck and Jonel's are labor-only contractors. On the other, respondents maintained that they were, in fact, illegally dismissed and as such, they were entitled to holiday pay, overtime pay, moral and exemplary damages, double indemnity pay, and attorney's fees.

Respondents alleged that they filed a motion for consolidation but the same was not acted upon by the CA since their petitions were already submitted for decision. 17

On August 28, 2015, the CA 18th Division, rendered its Decision in CA-G.R. CEB SP No. 07862 which denied PCPPI's petition and affirmed, with modification, the NLRC Decision. The appellate court not only found that Hytruck and Jonel's were labor-only contractors, it also ruled that the dismissal of the respondents was tainted with illegality. Thus, it ordered PCPPI to reinstate respondents to their former positions without loss of seniority rights and other privileges or to pay them separation pay in case reinstatement was no longer possible and, in either case, to pay them full backwages. The CA disposed of the case as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered DENYING the petition filed in this case and AFFIRMING with MODIFICATION the assailed Decision of public respondent National Labor Relations Commission, Seventh Division, promulgated on January 31, 2013 in NLRC Case No. VAC-11-000680-2012, as follows:

Petitioner is ordered to reinstate the private respondents to their former positions without loss of seniority rights and other privileges or to pay them separation pay in case reinstatement is no longer possible; and to pay them full backwages. EcTCAD

In either case, it shall be computed from the time their compensations were withheld from them up to the time of their actual reinstatement or up to the time it is determined that reinstatement is no longer possible.

The NLRC is also ordered to RECOMPUTE private respondents backwages and separation pay, as aforementioned.

SO ORDERED. 18

In its Resolution 19 dated April 15, 2016, the CA, Special Former 18th Division, denied PCPPI's motion for reconsideration for lack of merit.

Aggrieved, PCPPI filed the present petition on June 20, 2016, insisting that there exists no employer-employee relationship between it and respondents. 20 Also, PCPPI claimed that Hytruck and Jonel's were not labor-only contractors. Since both companies were registered as contractors by the Department of Labor and Employment (DOLE), it can be inferred that they have substantial capital required by law. PCPPI further averred that Hytruck and Jonel's carry on an independent forklift business and that respondents were merely assigned to PCPPI to perform services related to the operation and maintenance of said forklifts. 21

Meanwhile, on November 20, 2018, the CA 20th Division, rendered its Decision 22 in CA-G.R. CEB SP No. 07826 which affirmed, with modification, the NLRC Decision. It similarly found that the respondents were illegally dismissed and that Hytruck and Jonel's were engaged in labor-only contracting. Hence, the CA awarded respondents their salary differentials, holiday pay, overtime pay, 13th month pay, indemnity equivalent to double the unpaid benefits owed to them, backwages or separation pay, as the case may be, and attorney's fees. Accordingly, the appellate court disposed of the case in this wise:

IN LIGHT OF ALL THE FOREGOING, the present petition for certiorari is GRANTED. The NLRC's Decision dated January 31, 2013 in NLRC Case No. VAC-11-000680-2012 is MODIFIED to read as follows:

WHEREFORE, premises considered, petitioners were illegally dismissed and are entitled to reinstatement with full backwages or separation pay in lieu of reinstatement with full backwages.

Respondent Pepsi-Cola Products Philippines, Inc. is ORDERED to reinstate petitioners to their former positions without loss of seniority rights and other privileges or to pay them separation pay if reinstatement is no longer possible, and in either case, to pay them full backwages, to be computed from the time their compensations were withheld from them up to the time of their actual reinstatement.

Respondents Hytruck Machineries Philippines, Inc. and Jonel Trucking were engaged in labor-only contracting. Respondents Pepsi-Cola Products Philippines, Inc., Hytruck Machineries Philippines, Inc. and Jonel Trucking are jointly and severally liable to pay petitioners their salary differentials, holiday pay, overtime pay, and 13th month pay for the period of November 1, 2010 up to the time of their termination.

Petitioners are also entitled to an indemnity equivalent to double the unpaid benefits owed to them and attorney's fees equivalent to ten percent (10%) of the total monetary award.

This case is REMANDED to the Labor Arbiter for proper computation of salary differentials, holiday pay, overtime pay, 13th month pay, indemnity equivalent to double the unpaid benefits owed to them, backwages or separation pay, as the case may be, and attorney's fees.

SO ORDERED. 23 HSAcaE

The CA, 20th Division, found that the elements of labor-only contracting are present. 24First, it held that PCPPI does not have the required substantial capital related to the service performed by the respondents. It rejected PCPPI's contention that since Hytruck and Jonel's were registered with the DOLE, it can be inferred that they have substantial capital. Registration was not conclusive evidence but merely prevents the legal presumption of being a labor-only contractor from arising. The CA also pointed out that it was only Hytruck and not Jonel's that presented a registration. But even so, Hytruck's registration pertained to its business of light and heavy equipment such as forklifts, and not to the manpower business. As such, while Hytruck may insist that its forklifts are considered substantial capital, it failed to show any authority and capital necessary to provide manpower services under the Service Contract.

Second, the CA found the presence of the second element, that emphasized the fact that the services provided by respondents specifically as housekeeper, janitor, yard laborer, sugar operator, had nothing to do with the operation of forklifts but were actually services necessary and desirable for PCPPI's business. Thus, Hytruck and Jonel's are labor-only contractors, mere agents of the real employer, PCPPI.

In view of the findings that respondents were considered as regular employees of PCPPI, the appellate court further ruled that they cannot be dismissed without just cause and due process, none of which were alleged or proven by PCPPI. To recall, the only defense PCPPI raised was that it was not the employer of respondents.

On December 9, 2019, respondents filed a Motion to Dismiss Petition Outright 25 revealing that the November 20, 2018 Decision of the CA, 20th Division became final and executory as per Entry of Judgement 26 dated April 20, 2019 since PCPPI did not file a motion for reconsideration thereof. Nevertheless, they ultimately point out that both 18th and 20th Divisions of the CA are one in finding that Hytruck and Jonel's are labor-only contractors and that respondents were illegally dismissed.

Issue

Whether the CA erred in finding that Hytruck and Jonel's are labor-only contractors, and that the respondents were illegally dismissed.

Our Ruling

The petition is denied.

At the outset, the Court maintains that the actions of the parties before the different divisions of the appellate court should have been consolidated.

It is settled in jurisprudence that the consolidation of two or more actions is authorized where the cases arise from the same act, event or transaction, involve identical claims and issues between and among the same parties, and depend largely or substantially on the same evidence, provided that the court has jurisdiction and that no substantial rights of the parties will be prejudiced. This policy of consolidation eliminates conflicting results, protects the parties' constitutional right to a speedy disposition of cases, and ultimately enhances the administration of justice. 27

Since the petitions filed before the 18th and 20th Divisions of the CA essentially involved the same parties and the same issues of labor-only contracting and illegal dismissal, the appellate courts should have been more circumspect and allowed the consolidation of the cases. HESIcT

Instructive on the matter is Our ruling in Magalang v. Court of Appeals. 28 In that case, there was also a conflict between the decisions of two different appellate court divisions. When the NLRC ruled that Magalang was illegally dismissed by Suyen Corporation, but refused to award backwages, both parties filed their respective petitions before the CA. While both the 9th and 4th Divisions of the CA affirmed the NLRC finding that Magalang was illegally dismissed, the appellate courts differed as to the monetary award. On the one hand, the CA's 9th Division modified the NLRC's ruling and awarded full backwages in Magalang' s favor. 29 On the other, the 4th Division simply affirmed the NLRC ruling without the award of backwages. 30

Since no appeal was interposed to challenge the Decision of the CA, 9th Division, the same attained finality. As such, when the Decision of the CA, 4th Division was subsequently brought to the Court, We took cognizance of the final and executory Decision of the 9th Division and held that the Decision of the 4th Division must be modified in the spirit of consistency with the 9th Division. Thus, We similarly awarded full backwages in favor of Magalang.

In this case, both the LA and NLRC found that respondents were not illegally dismissed, but they are still considered regular employees of PCPPI since Hytruck and Jonel's were labor-only contractors. As such, PCPPI was ordered to reinstate respondents to their former positions without diminution of seniority, salary, and benefits, and to pay them salary differentials as well as 13th month pay.

Both PCPPI and respondents appealed the NLRC Decision to the CA.

On the one hand, the CA, 18th Division, affirmed, with modification, the NLRC Decision finding not only that Hytruck and Jonel's were labor-only contractors but also that respondents were illegally dismissed. Consequently, PCPPI was ordered to reinstate respondents to their former positions without loss of seniority rights and other privileges or to pay them separation pay in case reinstatement is no longer possible and, in either case, to pay them full backwages.

On the other hand, the CA, 20th Division, similarly affirmed, with modification, the NLRC Decision finding not only that Hytruck and Jonel's were labor-only contractors but also that respondents were illegally dismissed. Hence, PCPPI was ordered to reinstate petitioners to their former positions without loss of seniority rights and other privileges or to pay them separation pay if reinstatement is no longer possible, and in either case, to pay them full backwages. In addition, the CA, 20th Division, further ordered PCPPI to pay respondents salary differentials, holiday pay, overtime pay, 13th month pay, indemnity equivalent to double the unpaid benefits owed to them, and attorney's fees.

The Decision of the CA, 20th Division, attained finality in the absence of any appeal thereof. This Decision became final and executory and was recorded in the Book of Entries of Judgments on April 20, 2019. 31

As in Magalang, the differences between the Decisions of 18th and 20th CA Divisions could have been avoided had the petitions of PCPPI and respondents been consolidated. It cannot be denied that the various divisions of the CA are, in a sense, coordinate courts. Pursuant to the policy of judicial stability, a division of the appellate court should not interfere with the decision of the other divisions of the court, otherwise, confusion will ensue and may seriously hinder the administration of justice. 32

Be that as it may, in Our present review of the Decision of the CA, 18th Division, 33 the Court must give due recognition to the final and executory Decision of the CA, 20th Division. 34 This is in consonance with the principle of "bar by prior judgment" embraced in the doctrine of res judicata under Rule 39, Section 47 (b) 35 of the Rules of Court. Time and again, the Court has pronounced that a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all points and matters determined in the former suit. 36 Hence, for res judicata to operate as a "bar by prior judgment," not only must there be a final judgment on the merits by a court of competent jurisdiction, there must also be identity of parties, subject matter, and causes of action as between the first case where the first judgment was rendered and the second case that is sought to be barred. 37 caITAC

The Court finds that these requisites are obtaining in the facts of the present case. First, the Decision of the CA, 20th Division, is a final and executory judgment on the merits by a court having jurisdiction over the subject matter and the parties. Second, the parties in both cases are PCPPI, Hytruck, Jonel's, and respondents. Third, both cases involve the same subject matter: the legality of respondents' dismissal and the identity of their true employer. Fourth, both cases originated from the complaints for illegal dismissal filed by respondents against the companies before the same LA, who determined their conflicting rights based on the pieces of evidence presented.

In view of the foregoing, the final and executory Decision of the CA, 20th Division, is conclusive on the very same issues presented before the Court in this case. Hence, We must be, by the mandate of law, bound by said ruling for, to rule otherwise, would offend the long-established doctrine of immutability of judgments.

Time and again, the Court has held that in the fulfilment of their roles towards the administration of justice, courts must adhere to the doctrine of immutability of judgments. 38 Nothing is more settled in law than that once a judgment has acquired finality, the court loses jurisdiction over the case and not even the highest court of the land will have the power to modify the said judgment in any respect, even if the modification is meant to correct erroneous conclusions of fact and law. 39 To rule differently would not only mean a litigation with no end but would also be to set naught the role of the courts to enforce the rule of law, maintain peace and order, and settle justiciable controversies with finality. 40

Indeed, courts must be constantly vigilant in extending their judicial gaze to cases of the same parties and issues lest there be judicial confusion and conflict in our decisions. To ignore the concept of judicial notice and disregard a finding previously made by the Court and/or by a court of equal rank is ridiculous and illogical. Not only will it add to the clogged dockets of the courts, but worse, it will result in an unnecessary vexation of a person on the same cause that could have otherwise been avoided by the simple expedience of consolidating the cases. 41

This notwithstanding, let it be noted that We see no fundamental injustice arising from Our strict adherence to the immutability of judgments. It cannot be denied that PCPPI was given ample opportunity to be heard, unbridled access to the courts, and fair judgments rendered in due consideration of the pieces of evidence presented. What is more is that the rulings of the 18th and 20th Divisions of the appellate court were harmonious in its findings of the commission of labor-only contracting as well as the illegal dismissal of respondents except only as to the amounts awarded as a consequence thereof. In the spirit of judicial stability, therefore, We affirm but modify the subject Decision of the CA, 18th Division, in CA-G.R. CEB SP No. 07862 in accordance with the final and executory Decision of the CA, 20th Division, in CA-G.R. CEB SP No. 07826.

WHEREFORE, premises considered, the instant petition is DENIED. The Decision dated August 28, 2015 and the Resolution dated April 15, 2016 of the Court of Appeals, Eighteenth (18TH) Division in CA-G.R. CEB SP No. 07862, are AFFIRMED with MODIFICATION in order to make them consistent with the final and executory Decision dated November 20, 2018 of the Court of Appeals, Twentieth (20th) Division, in CA-G.R. SP CEB No. 07826. Thus:

Respondents Renante Cabatuan, Daniel Cañon, Jr., Genaro Pardillo, Efren Genes, Steve Fernandez and Richard Sarno, were illegally dismissed and are entitled to reinstatement with full backwages or separation pay in lieu of reinstatement with full backwages.

Petitioner Pepsi-Cola Products Philippines, Inc. is ORDERED to reinstate respondents to their former positions without loss of seniority rights and other privileges or to pay them separation pay if reinstatement is no longer possible, and in either case, to pay them full backwages, to be computed from the time their compensations were withheld from them up to the time of their actual reinstatement.

Pepsi-Cola Products Philippines, Inc., Hytruck Machineries Philippines, Inc. and Jonel's Trucking Services, Inc. are jointly and severally liable to pay respondents their salary differentials, holiday pay, overtime pay, and 13th month pay for the period of November 1, 2010 up to the time of their termination.

Respondents are also entitled to an indemnity equivalent to double the unpaid benefits owed to them and attorney's fees equivalent to ten percent (10%) of the total monetary award.

Accordingly, this case is REMANDED to the Labor Arbiter for proper computation of salary differentials, holiday pay, overtime pay, 13th month pay, indemnity equivalent to double the unpaid benefits owed to them, backwages or separation pay, as the case may be, and attorney's fees. cDHAES

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. 10-31.

2.Id. at 37-48. Penned by Associate Justice Gabriel T. Ingles, with Associate Justices Marilyn B. Lagura-Yap and Marie Christine Azcarraga-Jacob, concurring.

3.Id. at 49-50. Penned by Associate Justice Gabriel T. Ingles, with Associate Justices Marilyn B. Lagura-Yap and Germano Francisco D. Legaspi, concurring.

4.Id. at 117-129. Penned by Presiding Commissioner Violeta Ortiz-Bantug, with Commissioner Julie C. Rendoque, concurring; and Commissioner Jose G. Gutierrez, dissenting.

5.Id. at 184-201. Penned by Vitto A. Kintanar.

6.Id. at 38.

7.Id. at 38-39.

8.Id. at 311.

9.Id. at 38.

10.Id. at 310.

11.Id. at 311.

12.Id. at 39.

13.Id. at 184-204.

14.Id. at 200-201.

15.Id. at 117-129.

16.Id. at 131-136.

17.Id. at 328. Alleged in the Motion to Dismiss the Petition Outright dated December 5, 2019.

18.Id. at 47-48.

19.Id. at 49-50.

20.Id. at 15-18.

21.Id. at 18-28.

22.Id. at 309-322. Penned by Associate Justice Pamela Ann Abella Maxino, with Associate Justices Louis P. Acosta and Dorothy Montejo-Gonzaga, concurring.

23.Id. at 320-321.

24. Section 5 of DOLE Order No. 18, Series of 2002 (DO 18-02) provides:

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:

xxx xxx xxx

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 x x x.

25.Id. at 328-329.

26.Id. at 334-335.

27.Borra, et al. v. Court of Appeals, et al., 717 Phil. 410, 427 (2013); In re Fabiana, 713 Phil. 161, 174-175 (2013).

28. 570 Phil. 236 (2008).

29. By virtue of its September 5, 2002 Decision in CA-G.R. SP No. 75185.

30. By virtue of its March 31, 2004 Decision in CA-G.R. SP No. 79408.

31.Rollo, pp. 334-335.

32.Magalang v. Court of Appeals, supra note 28 at 241.

33. In CA-G.R. SP No. 07862.

34. In CA-G.R. SP No. 07826.

35. Paragraph (b), Section 47, Rule 39 of the Rules of Court provides:

Sec. 47. Effect of judgments or final orders. — The effect of a judgment or a final order rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

xxx xxx xxx

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; . . .

36.Serrano v. Ambassador Hotel, Inc., 703 Phil. 213, 222 (2013).

37.Id. 222-223.

38.Catelo v. Centrolink Service Corp., G.R. No. 220032 (Minute Resolution), November 5, 2018.

39.Apo Fruits Corporation, et al. v. Court of Appeals, 622 Phil. 215, 230-231 (2009).

40.Magalang v. Court of Appeals, supra note 28 at 242.

41.Supra note 36 at 225.