WEDNESDAY, SEPTEMBER 17, 2008

Rosewood Processing, Inc. vs National Labor Relations Commission

A Summary of a Decision of the Supreme Court of the Philippines
G.R. Nos. 116476-84 May 21, 1998
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 nonpayment 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.