THIRD DIVISION
[G.R. No. 207803. March 27, 2017.]
PREMIERE PRINTING CO., INC., petitioner, vs. VERONICA AGLUBAT, NYMPA TOMALE, MARIFE BERNALDEZ, LORETA TORNO, LENIE BOHOL, CLEOFE OBAG, MA. JADE FLORES, GINA MACAGBA AND ROSE LAYUG, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution datedMarch 27, 2017,which reads as follows:
"G.R. No. 207803 (Premiere Printing Co., Inc. vs. Veronica Aglubat, Nympa Tomale, MarifeBernaldez, Loreta Torno, Lenie Bohol, Cleofe Obag, Ma. Jade Flores, Gina Macagba and Rose Layug). — This is a petition for review on certiorari1 under Rule 45 of the Rules of Court seeking to annul and set aside the Decision 2 dated February 25, 2013 and Resolution 3 dated June 14, 2013 issued by the Court of Appeals (CA) in CA-G.R. SP No. 119839.
Veronica Aglubat, Nympa Tomale, Marife Bernaldez, Loreta Torno (Loreta), Lenie Bohol, Cleofe Obag, Ma. Jade Flores, Gina Macagba (Gina), Vanessa Macagba, and Rose Layug (collectively, the respondents) claimed that they were regular employees of Premiere Printing Co., Inc. (petitioner), a company engaged in the business of publishing magazines. They claimed that they were paid on a piece-rate basis and worked 12 hours daily; that their average daily wages only ranged from P150.00 to P200.00 and that the payment thereof was delayed for several months. Thus, they had to rely on their vales of about P150.00 each per week. 4
Even if they wanted to leave their employment, the respondents claimed that they could not do so since their line leaders informed them that they would not receive the wages due them once they sever their employment. However, the promised payment of their wages never materialized and, hence, they terminated their employment on various dates from November 17, 2003 to May 5, 2004. 5
Consequently, the respondents filed a complaint for constructive dismissal, underpayment of wages, non-payment of wages and other benefits with the arbitration branch of the National Labor Relations Commission (NLRC) against the petitioner and/or Robina Gokongwei. They alleged that they were forced to terminate their employment on account of the petitioner's continued failure and unjustified refusal to pay their wages. They, thus, prayed that a judgment be rendered finding them constructively dismissed and ordering the petitioner to pay them separation pay, full backwages, overtime pay, premium pay for rest days and holidays, holiday pay, service incentive leave pay, 13th month pay, moral and exemplary damages, and attorney's fees. 6
The petitioner denied that the respondents were its employees, claiming that respondents Loreta and Gina were actually employees of E.M.L. Manpower Services (EML), while the rest of the respondents were the employees of White Bindery Promotion (WBP). It averred that WBP and EML are registered business entities, owned and operated by Teresita Panganiban and Ernesto M. Lucillo, respectively, which are engaged in labor recruitment and provision of personnel. 7
The petitioner pointed out that on March 21, 2003, it entered into a Service Agreement with WBP for the provision of qualified manpower and labor, which shall be supervised by the latter. It entered into a similar Service Agreement with EML on October 10, 2003. 8 The petitioner insisted that it is merely a client of WBP and EML which are independent service contractors and, accordingly, it could not be held liable for the respondents' supposed constructive dismissal or their monetary claims. 9
After due proceedings, the Labor Arbiter (LA), in its Decision 10 dated December 14, 2005, dismissed the respondents' complaint for lack of merit. On appeal, however, the NLRC, in its Decision 11 dated October 29, 2010, reversed the LA Decision dated December 14, 2005, viz.:
WHEREFORE, the appealed Decision is hereby SET ASIDE and a new one entered ordering [the petitioner] to: AcICHD
1. Pay [the respondents] backwages computed from the time they were forced to sever their employment with the company to the finality of this Decision;
2. Pay [the respondents] separation pay to be computed at one (1) month pay for every year of service, a fraction of six (6) months to be considered as one (1) whole year;
3. Pay [the respondents] their wage differentials, holiday pay, 13th month pay and service incentive leave pay; [and]
4. Pay [the respondents] attorney's fees equivalent to 10% of the total award.
SO ORDERED.12
The NLRC pointed out that the petitioner failed to adduce proof that WBP and EML are registered with the Department of Labor and Employment (DOLE) as legitimate independent contractors. 13 Further, the NLRC opined that the respondents had categorically stated that they applied with the petitioner; that they were supervised by its General Manager Jun Gomez; and that they used the tools and equipment of the petitioner in doing their work. The NLRC also found that the respondents were already working with the petitioner even before the latter entered into the Service Agreements with WBP and EML. 14
The NLRC held that the respondents are entitled to wage differentials, holiday pay, 13th month pay, service incentive leave pay, and attorney's fees. Nevertheless, the NLRC found that the respondents failed to substantiate their claim for damages, overtime pay and premium pay for rest days and holidays. 15
The petitioner sought a reconsideration of the Decision dated October 29, 2010, but it was denied by the NLRC in its Resolution 16 dated March 30, 2011.
Aggrieved, the petitioner filed a petition for certiorari17 with the CA, claiming that the NLRC gravely abused its discretion in ruling that WBP and EML are not legitimate independent contractors and in finding that the respondents were constructively dismissed. The petitioner further averred that the NLRC erred in ruling that the computation of the respondents' backwages shall be reckoned from the time of their alleged dismissal up to the finality of its decision considering that the petitioner, as a business entity, has already been dissolved on May 31, 2006. 18
On February 25, 2013, the CA rendered the herein assailed Decision 19 dismissing the petition for certiorari. The CA upheld the NLRC's conclusion that WBP and EML are labor-only contractors and not legitimate job contractors. 20 The CA also found that the petitioner's failure to pay the wages due to the respondents on time made it impossible, unreasonable and unlikely for the latter to continue with their employment and, as such, amounted to constructive dismissal. 21
As regards the petitioner's claim that the computation of the monetary awards due to the respondents should only be up to the time of its dissolution on May 31, 2006, the CA found the same to be untenable. The CA found that the petitioner failed to file its dissolution papers with the Securities and Exchange Commission (SEC). As such, the petitioner is still deemed legally existing notwithstanding that it has allegedly ceased to operate. 22
The petitioner's motion for reconsideration was denied by the CA in its Resolution 23 dated June 14, 2013.
Hence, this petition, wherein the petitioner insists that it has a valid job contracting agreement with WBP and EML; that no evidence was presented to show that it was indeed the petitioner who hired the respondents and exercised control and supervision over their work. 24 Assuming that it is indeed liable for the respondents' supposed illegal constructive dismissal, the petitioner claims that it should not be made liable for the respondents' backwages after it has ceased its operation on May 31, 2006. 25
On the other hand, the respondents, in their Comment, 26 maintains that the CA correctly ruled that WBP and EML are labor-only contractors. They insist that it was the petitioner who hired them and not WBP and EML. They point out that it was the petitioner who controls and supervises their work; that they work within the petitioner's premises, using the tools and equipment owned by the latter. 27 The respondents also aver that the monetary awards due them should be computed until the finality of the decision despite the petitioner's supposed cessation of business operations since the latter has failed to formally dissolve its corporate existence. 28
Essentially, the issues for the Court's resolution are the following: first, whether WBP and EML are legitimate independent contractors; second; whether the respondents were constructively dismissed and are, thus, entitled to their monetary claims; and third, assuming that the petitioner is liable to pay the monetary claims of the respondents, whether the payment of the respondents' backwages should only be until May 31, 2006 — the date when the petitioner ceased its operations.
Ruling of the Court
The petition is denied.
First, the NLRC and the CA correctly ruled that WBP and EML are not legitimate independent contractors. In Sasan, Sr., et al. v.NLRC 4th Division, et al.,29 the Court distinguished permissible job contracting from labor-only contracting, viz.:
Permissible job contracting or subcontracting refers to 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. A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:
(a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account 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; TAIaHE
(b) The contractor or subcontractor has substantial capital or investment; and
(c) 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.
In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present:
(a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; and
(b) 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. 30 (Citations omitted)
In distinguishing between prohibited labor-only contracting and permissible job contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. 31 Further, Section 11 of Department Order No. 18-02, 32 series of 2002, issued by the DOLE provides that the failure to register with the DOLE as contractor or subcontractor shall give rise to the presumption that the contractor is engaged in labor-only contracting.
In this case, WBP and EML are presumed to be engaged in labor-only contracting considering that there is no proof that they are registered with the DOLE as contractors or subcontractors. In any case, even if the Court is to disregard the foregoing presumption, the totality of the factual circumstances of this case leads to the conclusion that they are not legitimate service contractors.
The petitioner failed to show that WBP and EML each have substantial capital or investment to actually perform the job supposedly contracted out pursuant to the Service Agreements. The respondents categorically stated that they worked inside the premises of the petitioner and used the latter's tools and equipment, such as the gathering machine and stitching machine, to perform their tasks. 33
Further, there was no proof that it was WBP and EML which established the respondents' working procedure and methods, which supervised them in their work, or which evaluated the same. The respondents stated that they were supervised by the petitioner's personnel and that they abided by the rules and regulations laid down by the petitioner, including the use of the latter's time card. 34
Furthermore, it cannot be gainsaid that the respondents are performing activities that are directly related to the main business of the petitioner. The respondents were tasked to revise, fold, bind, count, bundle, gather and other related finishing activities for the petitioner's magazine and other paper works. 35 Indubitably, the foregoing tasks are directly related to the business of publishing magazines.
Accordingly, WBP and EML can only be classified as labor-only contractors. Thus, the respondents are considered regular employees of the petitioner who are entitled to security of tenure and could only be dismissed for just or authorized cause and after they had been accorded due process.
Second, the petitioner's persistent and unjustified refusal to pay the wages due to the respondents, which caused them to terminate their employment, amounts to a constructive dismissal. There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice except to forego continued employment. It exists when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely. 36
In SHS Perforated Materials, Inc., et al. v. Diaz, 37 the Court held that the unlawful withholding of salary, which causes an employee to quit, amounts to a constructive dismissal, thus:
What made it impossible, unreasonable or unlikely for respondent to continue working for SHS was the unlawful withholding of his salary. For said reason, he was forced to resign. x x x What is significant is that the respondent prepared and served his resignation letter right after he was informed that his salary was being withheld. It would be absurd to require respondent to tolerate the unlawful withholding of his salary for a longer period before his employment can be considered as so impossible, unreasonable or unlikely as to constitute constructive dismissal. x x x. 38
In this case, the failure of the petitioner to pay the respondents' wages for several months made it impossible, unreasonable and unlikely for the latter to continue with their employment. The respondents, who are already underpaid to begin with, had to make do with their vales, which are ironically an advance on their wages that are unjustly denied to them, of P150.00 each per week. Clearly, the respondents were constructively dismissed and, hence, illegally dismissed.
The Court affirms the NLRC's monetary awards in favor of the respondents. Article 279 of the Labor Code, as amended, provides that an illegally dismissed employee shall be entitled to reinstatement, 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. 39 Nevertheless, in cases of illegal dismissal, the accepted doctrine is that separation pay is available in lieu of reinstatement when the latter's recourse is no longer practical or in the best interest of the parties. 40 The Court likewise affirms the NLRC's award of wage differentials, 13th month pay, holiday pay, service incentive leave pay, and attorney's fees.
Third, the time that the petitioner allegedly ceased its operations is immaterial and would not affect the period of the payment of the respondents' backwages. The petitioner, as proof of its supposed dissolution, only presented a Board Resolution dated May 31, 2006, which resolved to permanently cease its operations, and a Secretary's certificate of even date attesting to the adoption of the said Resolution. 41 However, the petitioner failed to adduce evidence that it complied with the provisions of the Corporation Code of the Philippines, particularly Sections 118 42 and 119 43 — the procedures for voluntary dissolutions of corporations where no creditors are affected and where creditors are affected, respectively. cDHAES
Indeed, the petitioner failed to present a certificate of dissolution duly issued by the SEC as proof of its claim that it is already dissolved and has ceased its business operations. Absent a certificate of dissolution from the SEC, the petitioner is deemed legally existing and may not evade liability for valid claims against it such as the respondents' backwages and other monetary claims. What appears from the foregoing is that the claimed dissolution of the petitioner is but a ruse intentionally adopted in order to evade the respondents' valid claims.
WHEREFORE, in view of the foregoing disquisitions, the petition is hereby DENIED. The Decision dated February 25, 2013 and Resolution dated June 14, 2013 issued by the Court of Appeals in CA-G.R. SP No. 119839 are AFFIRMED.
SO ORDERED."
Very truly yours,
(SGD.) WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1.Rollo, pp. 9-27.
2. Penned by Associate Justice Normandie B. Pizzaro, with Associate Justices Remedios A. Salazar-Fernando and Manuel M. Barrios concurring; id. at 29-47.
3.Id. at 48-49.
4.Id. at 31-32.
5.Id. at 32.
6.Id. at 32-33.
7.Id. at 102-106.
8.Id. at 103-106.
9.Id. at 109-116.
10. Rendered by LA Cresencio G. Ramos, Jr.; id. at 89-98.
11.Id. at 72-80.
12.Id. at 78.
13.Id. at 74.
14.Id. at 75.
15.Id. at 76-79.
16.Id. at 81-87.
17.Id. at 50-69.
18.Id. at 37, 45-46.
19.Id. at 29-47.
20.Id. at 40.
21.Id. at 42.
22.Id. at 45-46.
23.Id. at 48-49.
24.Id. at 15-24.
25.Id. at 24-25.
26.Id. at 241-251.
27.Id. at 245.
28.Id. at 250.
29. 590 Phil. 685 (2008).
30.Id. at 704-705.
31.See Babas, et al. v. Lorenzo Shipping Corporation, 653 Phil. 421, 431 (2010).
32. Rules Implementing Articles 106 to 109 of the Labor Code, as amended.
33.Rollo, p. 75.
34.Id.
35.Id. at 41.
36.See Duldulao v. Court of Appeals, 546 Phil. 22, 30 (2007).
37. 647 Phil. 580 (2010).
38.Id. at 598-599.
39.Philippine Amusement and Gaming Corporation v. Angara, 528 Phil. 861, 865 (2006).
40.See Leopard Security and Investigation Agency v. Quitoy, et al., 704 Phil. 449, 459-460 (2013).
41.Rollo, p. 46.
42. Sec. 118.Voluntary dissolution where no creditors are affected. — If dissolution of a corporation does not prejudice the rights of any creditor having a claim against it, the dissolution may be effected by majority vote of the board of directors or trustees, and by a resolution duly adopted by the affirmative vote of the stockholders owning at least two-thirds (2/3) of the outstanding capital stock or of at least two-thirds (2/3) of the members of a meeting to be held upon call of the directors or trustees after publication of the notice of time, place and object of the meeting for three (3) consecutive weeks in a newspaper published in the place where the principal office of said corporation is located; and if no newspaper is published in such place, then in a newspaper of general circulation in the Philippines, after sending such notice to each stockholder or member either by registered mail or by personal delivery at least thirty (30) days prior to said meeting. A copy of the resolution authorizing the dissolution shall be certified by a majority of the board of directors or trustees and countersigned by the secretary of the corporation. The Securities and Exchange Commission shall thereupon issue the certificate of dissolution.
43. Sec. 119.Voluntary dissolution where creditors are affected. — Where the dissolution of a corporation may prejudice the rights of any creditor, the petition for dissolution shall be filed with the Securities and Exchange Commission. The petition shall be signed by a majority of its board of directors or trustees or other officers having the management of its affairs, verified by its president or secretary or one of its directors or trustees, and shall set forth all claims and demands against it, and that its dissolution was resolved upon by the affirmative vote of the stockholders representing at least two-thirds (2/3) of the outstanding capital stock or by at least two-thirds (2/3) of the members at a meeting of its stockholders or members called for that purpose.
If the petition is sufficient in form and substance, the Commission shall, by an order reciting the purpose of the petition, fix a date on or before which objections thereto may be filed by any person, which date shall not be less than thirty (30) days nor more than sixty (60) days after the entry of the order. Before such date, a copy of the order shall be published at least once a week for three (3) consecutive weeks in a newspaper of general circulation published in the municipality or city where the principal office of the corporation is situated, or if there be no such newspaper, then in a newspaper of general circulation in the Philippines, and a similar copy shall be posted for three (3) consecutive weeks in three (3) public places in such municipality or city.
Upon five (5) days' notice, given after the date on which the right to file objections as fixed in the order has expired, the Commission shall proceed to hear the petition and try any issue made by the objections filed; and if no such objection is sufficient, and the material allegations of the petition are true, it shall render judgment dissolving the corporation and directing such disposition of its assets as justice requires, and may appoint a receiver to collect such assets and pay the debts of the corporation.