ROSEWOOD PROCESSING, INC.

, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, NAPOLEON C. MAMON, ARSENIO GAZZINGAN, ROMEO C.
VELASCO, ARMANDO L. BALLON, VICTOR E. ALDEZA, JOSE L. CABRERA, VETERANS PHILIPPINE SCOUT
SECURITY AGENCY, and/or ENGR. SERGIO JAMILA IV, respondents.
Facts of the case:
Private respondents were security guards of Veterans Philippine Scout Security Agency. Some were assigned to
other companies and detailed to Rosewood, while others are re-assigned to other companies from Rosewood, and
still others were put on floating status without assignment. Most were underpaid or their wages were never paid. All
these circumstances led to the filing of a complaint for illegal dismissal, underpayment of wages, and for nonpayment
of overtime pay, legal holiday pay, premium pay for holiday and rest day, thirteenth month pay, cash bond deposit,
unpaid wages and damages was filed against Veterans Philippine Scout Security Agency and/or Sergio Jamila IV
(collectively referred to as the "security agency," for brevity). Thereafter, petitioner Rosewood Processing, Inc. was
impleaded as a third-party respondent by the security agency. In due course, Labor Arbiter Ricardo C. Nora rendered
a consolidated Decision dated March 26, 1993 finding the security agency and Rosewood as solidarily liable to pay
the monetary benefits due the security guards.
Issue:
Whether or not petitioner Rosewood was solidarily liable with the security agency for the non-payment of wages, as
provided in Articles 106, 107 and 109 of the Labor Code.
Ruling:
The Supreme Court held that while it is undisputable that by operation of the provisions of Articles 106, 107 and 109,
the Employer which is Rosewood has solidary liability for payment of wage differentials, such liability however should
only be to the extent of the period when the respondent guards were under its employment. For the periods where
said guards were assigned somewhere else, the Supreme Court held that Rosewood cannot be liable. The Supreme
Court further held that since there was no evidence presented pointing to the fact that Rosewood conspired with the
security agency in illegally dismissing the guards, it cannot be made liable to pay back wages as provided in Article
109. Finally, since an order to pay back wages and separation pay is invested with a punitive character, such that an
indirect employer should not be made liable without a finding that it had committed or conspired in the illegal
dismissal, then Rosewood, which was no longer the employer of the guards when they were dismissed, should not be
compelled to pay since it was clear that it took no part in the illegal dismissal.