580 Phil. 155
REYES, R.T., J.:
On January 25, 1990, petitioner was transferred to PAL's Catering Operations as a kitchen busboy in the sanitizing section.
TO :GARCIA, Rodolfo NUEDA, Ferdinand FROM :Vice President Comptroller SUBJECT :LAST WARNING DATED :28 April 1987 Our attention was called by our client Philippine Airlines - Inflight Kitchen regarding your failure to report for work last April 17, 1987. Your absences has (sic) caused inconvenience in the operation of our client. Let this serve as our last warning, any repetition or violation of any
company rules and regulations will constrain us to terminate your services with us.(SGD.) CARLOS P. CALLANGA[4]
Consequently, in a letter dated March 28, 1990, Carlos P. Callanga, VP-Operations/Comptroller of Stellar, demanded from petitioner a written explanation why no disciplinary action should be taken against him, in view of the following charges: (1) poor performance/negligence of duty; and (2) selling of cigarettes while on duty.[6]
TO :Mr. Oscar Lluz Operations Manager Stellar Industrial Services FROM :Manager-Catering Operations SUBJECT :MR. RODOLFO GARCIA We would like to request for the immediate replacement of Mr. Rodolfo Garcia. He has failed to meet the performance requirement of a helper at Catering Operations. Hereunder are the observations of his superiors from January 8 to the present. 01. Always late in completing assigned tasks. 02. Must be consistently prodded to meet deadlines. 03. Unable to identify and carry out work priorities and needs assistance from co-workers.Worst of all, he was caught selling cigarettes while on duty. We hope you will act on our request immediately. (SGD.) CRISTINA W. TRINIDAD[5]
Dissatisfied with petitioner's explanation, Stellar subsequently terminated his employment.April 2, 1990
Mr. Cesar Lluz
Operation Manager
Stellar Industrial Services
Cibeles Bldg., Ayala
Makati, Metro Manila
Dear Sir:
These are my answers to the charges against me as inscribed in a letter of MS. Cristina W. Trinidad dated March 21, 1990.
As to the allegation that I was always late in completing assigned task, this was not true because works in the Catering Service has (sic) no ending due to the nature of PAL's business.
As to the allegation that I must constantly (be) prodded to meet deadlines, (this) was not correct because of the above reasons.
As to the allegation that I was not able to identify and carry out work priorities and needs assistance from co-workers was not also (sic) correct because I always have a companion in the performance of my job because the nature of the work calls for it.
And as to the last allegation that I was caught selling cigarettes while on duty was not also tru (sic) because how can I sell cigarettes when I was surrounded by heavy works and the mess in my hands while on duty will make them spoiled. The cigarettes inside my pocket was (sic) only for my personal consumptions (sic).
I hope these answers will enlighten my case and I am looking forward that I will be given merit considering that I am connected with the service for a period of fourteen (14) years without being apprehended/complained of misconduct unbecoming.Yours truly,
(Sgd.)
RODOLFO GARCIA[7]
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of complainant herein to be illegal and unauthorized; consequently, ordering herein respondents jointly and severally without loss of seniority rights and privileges and with full backwages counted from the date of his dismissal until actual reinstatement which up to the date of the promulgation of this Decision has already amounted to TWO HUNDRED FORTY THOUSAND FOUR HUNDRED SEVENTY-FIVE and 21/100 (P240,475.21) pesos, broken down as follows:However, on appeal, the Third Division of the NLRC reversed Labor Arbiter Tumanon, holding that petitioner was "guilty of gross and habitual neglect and was consequently terminated for cause and with due process."[15] The NLRC declared that:Backwages in the sum of P218,810.02;It appearing that complainant has been represented by counsel in the litigation of this case, said counsel is hereby awarded the sum of ten (10%) percent of the total award as and for attorney's fees in the amount of TWENTY-FOUR THOUSAND FORTY-SEVEN and 52/100 (P24,047.52) pesos, subject also for adjustment.
13th Month pay in the sum of P18,234.16;
Service Incentive Leave pay in the sum of P3,431.03;
subject to adjustment if payroll or physical reinstatement is denied.
SO ORDERED.[14]
x x x respondent Stellar appears to be an independent job contractor and not merely a labor only contractor. Apart from the fact that it has sufficient capitalization to the tune of more than a million pesos, its workers perform work that are not necessary and desirable to the business of PAL. Simply stated, it is a job contractor for PAL's messengerial and janitorial needs no more no less. Hence, its employees are not of PAL.Petitioner's motion for reconsideration was denied by the NLRC in its October 8, 2004 Resolution.[17]
ACCORDINGLY, premises considered, the decision appealed from is hereby SET ASIDE and this case DISMISSED for lack of merits (sic).
SO ORDERED.[16]
WHEREFORE, premises considered, the Petition is GRANTED and the assailed 27 August 2001 Resolution of respondent Commission in NLRC NCR CA No. 010218-96 and the 29 November 1995 Decision of Labor Arbiter Emerson C. Tumanon in NLRC NCR No. 00-11-06556-92 are hereby MODIFIED insofar as the pecuniary awards declared in the Labor Arbiter's Decision are the sole responsibility of private respondent Stellar, petitioner's direct employer.In reality, however, the CA merely sustained the NLRC ruling that Stellar is an independent contractor. The CA observed:
SO ORDERED.[18]
However, it is only private respondent Stellar who is responsible to petitioner as the former is an independent contractor. The issue whether or not Stellar is an independent contractor or merely engaged in labor-only contracting was already addressed and settled by the Highest Magistrate in a related case entitled Phil. Airlines vs. NLRC, 298 SCRA 430 [2000], to wit:Petitioner moved for partial reconsideration asking that PAL be made solidarily liable with Stellar. However, the CA denied his motion in its Resolution dated March 17, 2004. Hence, this petition."Aside from these stipulations in the service agreement, other pieces of evidence support the conclusion that STELLAR, not PAL, was the employer of the individual private respondents. A contract of employment existed between STELLAR and the individual private respondents, proving that it was said corporation which hired them. It was also STELLAR which dismissed them, as evidenced by Complainant Parenas' termination letter, which was signed by Carlos P. Callanga, vice president for operations and comptroller of STELLAR. Likewise, they worked under STELLAR's own supervisors, Rodel Pagsulingan, Napoleon Parungao, and Renato Topacio. STELLAR even had its own collective bargaining agreement with its employees, including the individual private respondents. Moreover, PAL had no power of control and dismissal power them (sic)."[19]
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ABSOLVING PAL FROM LIABILITY CONSIDERING THAT IT IS THE EMPLOYER OF PETITIONER BECAUSE THE LATTER PERFORMED FUNCTIONS, DUTIES AND RESPONSIBILITIES NECESSARY AND DESIRABLE TO ITS BUSINESS OPERATIONS.Simply stated, the essential issue is whether PAL is petitioner's employer and solidarily liable with Stellar for illegal dismissal.II.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ABSOLVING PAL FROM LIABILITY CONSIDERING THAT IT IS THE EMPLOYER OF PETITIONER BECAUSE IT IS PAL WHICH EXERCISED CONTROL OVER THE MEANS AND METHODS (BY WHICH) PETITIONER PERFORMED HIS JOB AT ITS CATERING DEPARTMENT.III.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ABSOLVING PAL FROM LIABILITY CONSIDERING THAT IT IS THE EMPLOYER OF PETITIONER BECAUSE IT IS PAL WHICH ADOPTED RULES, REGULATIONS AND POLICIES REGARDING DISCIPLINE TO BE FOLLOWED BY ITS EMPLOYEES AT ITS CATERING DEPARTMENT.[20] (Underscoring supplied)
We have re-examined the record of this case and have found that SISI assigned supervisors and timekeepers at PAL's premises where SEA's members performed their work. On the issue of SISI's capitalization, it cannot be denied that, per its Amended Articles of Incorporation, it has an authorized capital stock of P1,000,000.00. SISI has a collective bargaining agreement (CBA) with its employees, including SEA's members, under which complainants obtained substantial benefits.Due to the failure to seasonably appeal or question the NLRC ruling,[25] its factual and legal findings have attained finality. Consequently, the holding that PAL is not petitioner's employer constitutes res judicata on the same issue in this petition.x x x x
We must remember that this case is principally for regularization and relies primarily on the premise that SISI is a "labor-only" contractor of PAL. With respect to the issue of whether or not SISI is a legitimate independent contractor, SEA admits that SISI provides its employees with "soap, cleansers, mops, lawn mowers, brooms, dust pans," etc. More telling is SEA's admission that SISI has several clients other than PAL. SEA tries to avoid the application of Neri, et al. vs. NRLC, et al., 224 SCRA 717 (July 23, 1993), by distinguishing SISI's janitorial operations from the other types of employees, like the station loaders.
This argument, however, falls flat on its face considering that SISI has substantial authorized capital in the amount of P1.0 Million, since this not limited to its janitorial department. This is evidenced by SISI's Amended Articles of Incorporation which is a public document under the possession, supervision and control of the Securities and Exchange Commission and We can even take judicial notice of this fact, despite SEA's declaration to the contrary.
We are aware of the standards used to determine a "labor-only" contractor. As SEA itself has pointed out, one such gauge is the absence of substantial capital, citing Art. 106 of the Labor Code and Sec. 9, Rule VIII of its Implementing Rules. In view of SISI's possession of substantial capital, it cannot be considered a "labor-only" contractor.
On the other hand, is SISI an independent contractor? We resolve this is in the affirmative after re-thinking our earlier Resolution. Aside from its capital, it also maintains an independent business as admittedly shown by its diversified clientele and the supervision and control as to the means of work as provided by its own timekeepers, foremen, etc.
We cannot subscribe to the position by SEA that the absence of premises, tools, equipment, etc. is anachronistic to SISI's being an independent contractor. There is nothing novel about this since this has been succinctly ruled upon by the Supreme Court in its Neri decision, supra. There, the High Court refined the definition of an independent contractor in the sense that it need not possess both tools and equipment, on one hand, and substantial capitalization, on the other hand. Otherwise, as observed by the Court, the legislator ought to have used the conjunctive "and," instead of "or."
Neither is the contention concerning the direct relation of complainants' services to PAL's operations relevant to the ultimate determination of this case. In Neri, the Supreme Court cited the "general practice," even of government institutions, of contracting out certain services, and, with the finding that BCC, the contractor there, was an independent one, also said -
x x x There is even no need for it to refute petitioner's contention that the activities are directly related to the principal business of respondent bank.x x x x
Viewed from a different standpoint, the workers have no contractual tie to PAL because SISI, as a legitimate independent contractor, is their true employer. They applied and executed employment contracts with SISI, not PAL, although SEA argues that its members were made to sign the application forms and employment contracts. What cannot be denied, however, is the brazen and undisputed fact that SISI has a CBA with its employees, including SEA's members. SISI's employees derived benefits under said CBA for the number of years it had been in force. The CBA is a clear admission of an employment relationship with SISI. It is now too late in the day for them to deny such relationship.x x x x
Because of the absence of a juridical tie with them, PAL's instructions cannot be considered control under the four-fold test of employment relationship. Going back to the Neri case, "x x x in legal contemplation, such instructions carry no more weight than mere requests x x x."x x x x
All told, We hereby rule that SISI is a legitimate independent contractor and is the true employer of the individual complainants, not PAL.[24] (Underscoring supplied)
Sec. 49. Effects of judgments. - The effect of a judgment or final order rendered by a court or judge of the Philippines, having jurisdiction to pronounce the judgment or order, may be as follows:Res judicata has two (2) concepts. The first is "bar by prior judgment" under Rule 39, Section 47(b). This rule dictates that the judgment or decree of a court of competent jurisdiction on the merits concludes the parties and their privies to the litigation and constitutes a bar to a new action or suit involving the same cause of action either before the same or any other tribunal.[28] Stated otherwise, the judgment rendered in the first case is an absolute bar to the subsequent action since said judgment is conclusive not only as to the matters offered and received to sustain that judgment but also as to any other matter which might have been offered for that purpose and which could have been adjudged therein.[29]x x x x
(b) In other cases, the judgment or 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;
(c) In any other litigation between the same parties or their successors-in-interest, that only is deemed to have been adjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.
x x x founded on the principle of estoppel, and are based on the salutary policy against unnecessary multiplicity of suits. Like the splitting of causes of action, res judicata is in pursuance of such policy. Matters settled by a Court's final judgment should not be litigated upon or invoked again. Relitigation of issues already settled merely burdens the Courts and the taxpayers, creates uneasiness and confusion, and wastes valuable time and energy that could be devoted to worthier causes. As the Roman maxim goes, Non bis in edem.[42]The regularization cases initiated and participated in by petitioner are now final and executory, and the issues resolved in that case should no longer be disturbed. Nothing is more settled in law than that when a judgmentbecomes final and executory it becomes immutable and unalterable. The same may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and whether made by the highest court of the land. The reason is grounded on the fundamental considerations of public policy and sound practice that, at the risk of occasional error, the judgments or orders of courts must be final at some definite date fixed by law.[43]