SECOND DIVISION
G.R. No. 202215, December 09, 2015
VICMAR DEVELOPMENT CORPORATION AND/OR ROBERT KUA, OWNER, AND ENGR. JUANITO C. PAGCALIWAGAN,1 MANAGER, Petitioners, v. CAMILO ELARCOSA, MARLON BANDA, DANTE L. BALAMAD, RODRIGO COLANSE,2 CHIQUITO PACALDO, ROBINSON PANAGA, JUNIE ABUGHO, SBLVERIO NARISMA, ARMANDO GONZALES, TEOFILO ELBINA, FRANCISCO BAGUIO, GELVEN RHYAN RAMOS, JULITO SIMAN, RECARIDO4 PANES, JESUS TINSAY, AGAPITO CANAS, JR., OLIVER LOBAYNON, SIMEON BAGUIO, JOSEPH SALCEDO, DONIL INDINO, WILFREDO GULBEN, JESRILE5 TANIO, RENANTE PAMON, RICHIE6 GULBEN, DANIEL ELLO, REXY DOFELIZ, RONALD NOVAL, NORBERTO BELARGA, ALLAN BAGUIO, ROBERTO PAGUICAN, ROMEO7 PATOY, ROLANDO TACBOBO, WILFREDO LADRA, RUBEN PANES, RUEL CABANDAY, AND JUNARD8 ABUGHO, Respondent.
D E C I S I O N
DEL CASTILLO, J.:
Before us is a Petition for Review on Certiorari assailing the November 24, 2009 Decision9 of the Court of Appeals (CA) in CA-G.R SP No. 01853-MN. The CA granted the Petition for Certiorari filed therewith, and reversed and set aside the February 2, 200710 Resolution of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro, which in turn, affirmed the May 25, 200611 and May 29, 200612 respective Decisions of Executive Labor Arbiters (LA) Benjamin E. Pelaez (Pelaez) and Noel Augusto S. Magbanua (Magbanua) dismissing the complaints for lack of merit. Also assailed is the May 10, 2012 CA Resolution13 denying the motion for reconsideration.
Factual Antecedents
This case stemmed from a Complaint for illegal dismissal and money claims filed by Ruben Panes, Ruel Cabanday and Jonard Abugho (respondents) against Vicmar Development Corporation (Vicmar) and/or Robert Kua (Kua), its owner and Juanito Pagcaliwagan (Pagcaliwagan), its manager, docketed as NLRC Case No. RAB-10-08-00593-2005;14 and consolidated Complaints for illegal dismissal and money claims filed by Camilo Elarcosa, Marlon Banda, Dante Balamad, Rodrigo Colanse, Chiquito Pacaldo, Robinson Panaga, Romel Patoy, Wilfredo Ladra, Junie Abugho, Silverio Narisma, Armando Gonzales, Teofilo Elbina, Francisco Baguio, Gelven Rhyan Ramos, Julito Siman, Recarido Panes, Jesus Tinsay, Agapito Cafias, Jr., Oliver Lobaynon, Rolando Tacbobo, Simeon Baguio, Roberto Paguican, Joseph Salcedo, Donil Indino, Wilfredo Gulben, Jesreil Taneo, Renante Pamon, Richie Gulben, Daniel EUo, Rexy Dofeliz, Ronald Noval, Norberto Belarca, and Allan Baguio (respondents), among others, against Vicmar, Kua, and Pagcaliwagan (petitioners), docketed as NLRC Case Nos. RAB-10-09-00603-2004; RAB-10-09-00609-2004; RAB-10-09-00625-2004; and RAB-10-02-00190-2005.15
Respondents alleged that Vicmar, a domestic corporation engaged in manufacturing of plywood for export and for local sale, employed them in various capacities - as boiler tenders, block board receivers, waste feeders, plywood checkers, plywood sander, conveyor operator, ripsaw operator, lumber grader, pallet repair, glue mixer, boiler fireman, steel strap repair, debarker operator, plywood repair and reprocessor, civil workers and plant maintenance. They averred that Vicmar has two branches, Top Forest Developers, Incorporated (TFDI) and Greenwood International Industries, Incorporated (GUI) located in the same compound where Vicmar operated.16
According to respondents, Vicmar employed some of them as early as 1990 and since their engagement they had been performing the heaviest and dirtiest tasks in the plant operations. They claimed that they were supposedly employed as "extra" workers; however, their assignments were necessary and desirable in the business of Vicmar. They asserted that many of them were assigned at the boilers for at least 11 hours daily.17 They emphasized that the boiler section was necessary to Vicmar's business because it was where pieces of plywood were dried and cooked to perfection.18 They further stated that a number of them were also assigned at the plywood repair and processing section, which required longer working hours.19
Respondents declared that Vicmar paid them minimum wage and a small amount for overtime but it did not give them benefits as required by law, such as Philhealth, Social Security System, 13th month pay, holiday pay, rest day and night shift differential.20 They added that Vicmar employed more than 200 regular employees and more than 400 "extra" workers.21
Sometime in 2004, Vicmar allegedly informed respondents that they would be handled by contractors.22 Respondents stated that these contractors were former employees of Vicmar and had no equipment and facilities of their own.23 Respondents averred that as a result thereof, the wages of a number of them who were receiving P276.00 as daily wage, were reduced to P200.00 or P180.00, despite overtime work; and the wages of those who were receiving P200.00 and P180.00 were reduced to P145.00 or P131.00. Respondents protested said wage decrease but to no avail. Thus, they filed a Complaint with the DOLE24 for violations of labor standards for which appropriate compliance orders were issued against Vicmar.25cralawred
Respondents claimed that on September 13, 2004, 28 of them were no longer scheduled for work and that the remaining respondents, including their sons and brothers, were subsequently not given any work schedule.26
Respondents maintained that they were regular employees of Vicmar; that Vicmar employed a number of them as early as 1990 and as late as 200327 through Pagcaliwagan, its plant manager; that Vicmar made them perform tasks necessary and desirable to its usual business; and that Vicmar paid their wages and controlled the means and methods of their work to meet the standard of its products. Respondents averred that Vicmar dismissed them from service without cause or due process that prompted the filing of this illegal dismissal case.28
Respondents claimed that they were illegally dismissed after "vicmar learned that they instituted the subject Complaint through the simple expedience of not being scheduled for work. Even those persons associated with them were dismissed. They also asserted that Vicmar did not comply with the twin notice requirement in dismissing employees.29
Furthermore, respondents contended that while Vicmar, TFDI and Gin were separately registered with the SEC,30 they were involved in the same business, located in the same compound, owned by one person, had one resident manager, and one and the same administrative department, personnel and finance sections. They claimed that the employees of these companies were identified as employees of Vicmar even if they were assigned in TFDI or GIII.31
On the other hand, petitioners stated that Vicmar is a domestic corporation engaged in wood processing, including the manufacture of plywood since 1970;32 that Vicmar employed adequate regular rank-and-file employees for its normal operation; and that it engaged the services of additional workers when there were unexpected high demands of plywood products and when several regular employees were unexpectedly absent or on leave.33
Petitioners pointed out that the engagement of Vicmar's "extra" workers was not continuous and not more than four of them were engaged per section in every shift. They added that from the time of engagement, respondents were not assigned for more than one year in a section or a specific activity.34 They explained that some of Vicmar's "extra" workers were engaged under "pakyaw" system and were paid based on the items repaired or retrieved.35 Petitioners also stated that respondents Allan Baguio, Romel Patoy, Rexy Dofeliz, Marlon Banda, Gulben Rhyan Ramos, Julieto Simon and Agapito Canas, Jr. were "extra" workers of TFDI, not Vicmar.36 They likewise alleged that a number of respondents were engaged to assist regular employees in the company,37 and the others were hired to repair used steel straps and retrieve useable veneer materials, or to perform janitorial services.38
Moreover, petitioners argued that the engagement of additional workforce was subject to the availability of forest products, as well as veneer materials from Malaysia or Indonesia and the availability of workers.39
Petitioners further asseverated that sometime in August 2004, they decided to engage the services of legitimate independent contractors, namely, E.A. Rosales Contracting Services and Candole Contracting Services, to provide additional workforce.40 Petitioners claimed that they were unaware that respondents were dissatisfied with this decision leading to the DOLE case.41 They insisted that hiring said contractors was a cost-saving measure, which was part of Vicmar's management prerogative.42
Ruling of the Executive Labor Arbiters
On May 25, 2006, ELA Pelaez dismissed the complaints in NLRC Case Nos. RAB-10-09-00603-2004; RAB-10-09-00609-2004; RAB-10-09-00625-2004; and RAB-10-02-00190-2005.43 On May 29, 2006, ELA Magbanua dismissed the complaint in NLRC Case No. RAB-10-08-00593-2005.44
Both ELAs Pelaez and Magbanua held that respondents were seasonal employees of Vicmar, whose work was "co-terminus or dependent upon the extraordinary demands for plywood products and also on the availability of logs or timber to be processed into plywood."45 They noted that Vicmar could adopt cost-saving measures as part of its management prerogative, including engagement of legitimate independent contractors.46
Ruling of the National Labor Relations Commission
Consequently, respondents filed a Notice of Appeal with Motion to Consolidate Cases47 alleging that the foregoing cases involved same causes of actions, issues, counsels, and respondents, and complainants therein were similarly situated.
Thereafter, in their Consolidated Memorandum on Appeal,48 respondents argued that their work in Vicmar was not seasonal. They averred that since their employment in 1990 until their termination in 2004, they continuously worked for Vicmar and were not allowed to work for other companies. They alleged that there was never a decline in the demand and production of plywood. They also claimed that they continuously worked in Vicmar the whole year, except in December during which the machines were shut down for servicing and clean-up. They, nonetheless, stated that some of them were the ones who had been cleaning these machines.
In addition, respondents averred that even assuming that they were seasonal employees, they were still regular employees whose employment was never severed during off-season. Thus, they asserted that the decision to farm them out to contractors was in violation of their right to security of tenure and was an evidence of bad faith on the part of Vicmar.
On February 2, 2007, the NLRC affirmed the Decisions of ELAs Pelaez and Magbanua.49 On April 30, 2007, it denied respondents' motion for reconsideration.50
Ruling of the Court of Appeals
Undaunted, respondents filed with the CA a Petition51 for Certiorari maintaining that they were regular employees of Vicmar and that the latter illegally dismissed them. They insisted that the labor contractors engaged by Vicmar were "labor-only" contractors, as they have no equipment and facilities of their own.
Petitioners, for their part, reiterated that Vicmar employed respondents as additional workforce when there was high demand for plywood thus, they were merely seasonal employees of Vicmar. They argued that Vicmar engaged independent contractors as a cost-saving measure; and these contractors exercised direct control and supervision over respondents. In conclusion, petitioners declared that respondents were not illegally dismissed but lost their employment because of refusal to coordinate with Vicmar's independent contractors.
On November 24,2009, the CA rendered the assailed Decision granting the Petition for Certiorari, the dispositive portion of which reads:
WHEREFORE, premises considered, the Petition is GRANTED. The Resolution dated February 2,2007 of the National Labor Relations Commission (NLRC), Fifth Division, Cagayan de Oro City is REVERSED and SET ASIDE. Private respondents are ORDERED to reinstate petitioners to their former positions, without loss of seniority rights, and to pay full backwages from the time they were illegally dismissed until actual reinstatement.The CA held that a number of respondents were assigned to the boiler section where plywood was dried and cooked to perfection; and while the other respondents were said to have been assigned at the general service section, they were "cleaners on an industrial level handling industrial refuse."53 As such, according to the CA, respondents performed activities necessary and desirable in the usual business of Vicmar, as they were assigned to departments vital to its operations. It also noted that the repeated hiring of respondents proved the importance of their work to Vicmar's business. It maintained that the contractors were engaged by Vicmar only for the convenience of Vicmar. In sum, the CA declared that respondents were illegally dismissed since there was no showing of just cause for their termination and of compliance by Vicmar to due process of law.
SO ORDERED.52ChanRoblesVirtualawlibrary
THE HONORABLE COURT OF APPEALS, WITH ALL DUE RESPECT AND DEFERENCE, ERRED IN REVERSING AND SETTING ASIDE THE FINDINGS OF FACTS AND CONCLUSIONS OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC). THE DECISION AS WELL AS THE RESOLUTION ARE NOT IN ACCORDANCE WITH LAW AND APPLICABLE JURISPRUDENCE AND IF NOT CORRECTED, WILL CAUSE GRAVE INJUSTICE AND IRREPERABLE [SIC] DAMAGE TO THE PETITIONERS WHO WILL BE CONSTRAINED TO ABSORB UNCESSARY [SIC] WORKFORCE, WHICH WILL LEAD TO THE FURTHER DETERIORATION OF ITS FINANCIAL INSTABILITY [SIC] AND POSSIBLY TO ITS CLOSURE.55ChanRoblesVirtualawlibraryPetitioners contend that it is irregular for the CA to reverse the findings of facts of the NLRC and the ELAs based on two work schedules of different companies and identification cards of five respondents. They maintain that said evidence cannot conclusively prove that respondents were regular employees of Vicmar.56
The foregoing allegations were uncontroverted as no relevant employment files, payrolls and records were submitted by petitioners to refute the information. Being the employer, petitioners have custody and control of important employment documents. As such, failure to submit them gives rise to the presumption that their presentation would be prejudicial to petitioners' cause and leads the Court to conclude that the assertions of respondents are truthful declarations.68
NAMES DATE HIRED SECTION DATE FIRED Panes, Ruben June 1990 Boiler Oct. 2004 Panes, Recarido August 1990 Boiler Sept. 2004 Tinsay, Jesus 1991 Boiler Sept. 2004 Gonzales, Armando June 1991 Assy./Fin. Feb. 2004 Patoy, Romel Nov. 1991 Boiler Sept. 2004 Ladra, Wilfredo 1992 Plant Maint. Sept. 2004 Balamad, Dante July 1994 Boiler Sept. 2004 Baguio, Simeon 1995 Boiler Sept. 2004 Baguio, Francisco 1995 Block Board June 2004 Tacbobo, Rolando Jan. 1995 Plant Maint. Sept. 2004 Belarga, Norberto 1995 Boiler July 2004 Elarcosa, Camilo 1995 Boiler Sept. 2004 Abugho, Junie June 1996 Boiler Sept. 2004 Pamon, Renante June 1996 Assy./Fin. Sept. 2004 Abugho, Jonard June 1996 Boiler Oct. 2004 Noval, Ronald 1997 Boiler Aug. 2004 Siman, Julito 1997 Boiler Sept. 2004 Baguio, Allan 1997 Boiler Sept. 2004 Cabanday, Ruel 1998 Assy./Fin. Oct. 2004 Salcedo, Joseph 1998 Assy./Fin. Sept. 2004 Lobaynon, Oliver 1998 Boiler Sept. 2004 Panaga, Robinson 1999 Assy./Fin. March 2004 Paguican, Roberto 1999 Boiler Sept. 2004 Ello, Daniel 1999 Boiler Sept. 2004 Taneo, Jesrile 1999 Plywood Rep. Sept. 2004 Indino, Donil 1999 Plywood Rep. Sept. 2004 Narisma, Silverio July 1999 Assy ./Fin. Sept. 2004 Canas, Agapito Jr. Jan. 2000 Plant Maint. Sept. 2004 Gulben, Wilfredo Dec. 2000 Plywood Rep. Sept. 2004 Gulben, Rechie Mar. 2000 Plywood Rep. Sept. 2004 Pacaldo, Chiquito Mar. 2000 Green End May 2002 Dofeliz, Rexy June 2001 Boiler Aug. 2004 x x x x Ramos, Gelven Rhyan July 2002 Boiler Sept. 2004 Colansi, Rodrigo Oct. 2002 Assy./Fin. Sept. 2004 x x x x Jan. 2002 Boiler Sept. 2004 Banda, Marlon June 2003 Boiler Sept. 2004 Elbina, Teofilo Nov. 2003 Boiler July 2004
In this case, the appellants (Vicmar and TFDI) were given seven x x x days to comply with the Notice of Inspection Results or to contest the findings therein, but they chose to ignore the directive. Summary hearings were conducted x x x to give the appellants ample time to submit payrolls, but they merely promised to do so x x x [A]t the extra hearing on 18 November, they still failed to do so. x x x There being none, the Director could not but sustain the inspection report.Similarly, we cannot fault the CA in the instant case for giving credence to the assertions and documentary evidence adduced by respondents. Petitioners had the opportunity to discredit them had they presented material evidence, including payrolls and daily time records, which are within their custody, to prove that respondents were mere additional workforce engaged when there are extraordinary situations, such as high demands for plywood products or unexpected absences of regular employees; and that respondents were not assigned for more than one year to the same section or activity.
Neither can the Director be faulted for not referring the case to the NLRC on the ground that material evidence, namely, the payrolls and the daily time records, were not duly considered during inspection. The appellants cannot raise this argument because it was they who failed to produce the records for the consideration of the inspector and the Regional Director[.]70ChanRoblesVirtualawlibrary
Endnotes:
1 Also spelled as Pagcalinawan in some parts of the records.
2 Also spelled as Colansi in some parts of the records.
3 Per Special Order No. 2301 dated December 1, 2015.
4 Also spelled as Ricarido in some parts of the records.
5 Also spelled as Jesreil in some parts of the records.
6 Also spelled as Rechie in some parts of the records.
7 Also spelled as Romel in some parts of the records.
8 Also spelled as Jonard in some parts of the records.
9 CA rollo, pp. 328-347; penned by Associate Justice Ruben C. Ayson and concurred in by Associate Justices Edgardo A. Camello and Elihu A. Ybaflez; Associate Justices Rodrigo F. Lim, Jr. and Edgardo T. Lloren, dissented.
10 Id. at 32-35; penned by Presiding Commissioner Salic B. Dumarpa and concurred in by Commissioners Proculo T. Sarmen and Jovito C. Cagaanan.
11 Id. at 197-208.
12 Id. at 188-195.
13 Id. at 391-395; penned by Associate Justice Edgardo A. Camello and concurred in by Associate Justices Melchor Q. C. Sadang, Carmelita Salandanan-Manahan and Zenaida T. Galapate-Laguilles; Associate Justice Edgardo T. Lloren, dissented.
14 As stated in the ELA Decision dated May 29,2006; Id. at 188.
15 As stated in ELA Decision dated May 25,2006; Id. at 197-198.
16 Id. at 52.
17 Id. at 53.
18 Id. at 132.
19 Id. at 58.
20 Id. at 53.
21 Id. at 59.
22 Id. at 53.
23 Id. at 57.
24 Department of Labor and Employment.
25 CA rollo, pp. 53-54.
26 Id. at 54-55.
27 Id. at 58.
28 Id. at 56.
29 Id. at 59-60.
30 Securities and Exchange Commission.
31 CA rollo, p. 127.
32 Id at 101-102.
33 Id. at 104.
34 Id. at 104-105.
35 Id. at 105.
36 Id. at 107.
37 Id. at 108.
38 Id. at 109.
39 Id. at 170.
40 Id. at 105-106.
41 Id. at 106.
42 Id. at 110.
43 Id. at 197-208.
44 Id. at 188-195.
45 Id. at 193, 205.
46 Id. at 194-195, 206-207.
47 Id. at 209-211.
48 Id. at 213-235.
49 Id. at 32-35.
50 Id. at 42-43.
51 Id. at 2-25.
52 Id. at 346.
53 Id. at 339.
54 Id. at 391-395.
55Rollo, p. 21.
56 Id. at 26.
57 Id. at 26-27.
58 Id. at 28.
59 Id. at 33-34.
60 Id. at 34.
61 Id. at 119.
62 Id. at 121-123.
63 Id. at 124.
64Omni Hauling Services, Inc. v. Bon, G.R. No. 199388, September 3, 2014, 743 SCRA 270, 277.
65DOLE Philippines, Inc. v. Esteva, 538 Phil. 817, 854 (2006).
66 Art. 280. Regular and casual employment.- The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
67 CA rollo, pp. 133-134.
68Poseidon Fishing v. National Labor Relations Commission, 518 Phil. 146, 161-162 (2006).
69 CA rollo, pp. 45-50; penned by DOLE Secretary Patricia A. Sto. Tomas.
70 Id. at 48-49.
71Omni Hauling Services, Inc. v. Bon, supra note 64 at 278-281.
72Basan v. Coca-Cola Bottlers Philippines, G.R. Nos. 174365-66, February 4,2015.
73 Begino v. ABS-CBN Corporation, G.R No. 199166, April 20,2015.
74Polyfoam-RGC International Corp. v. Concepcion, G.R. No. 172349, June 13, 2012, 672 SCRA 148, 159 citing Sasan, Sr. v. National Labor Relations Commission, 4th Division, 590 Phil. 685, 704-705 (2008).
75 CA rollo, pp. 122-123.
76Polyfoam-RGC International Corporation v. Concepcion, supra note 74 at 161-162.
77San Miguel Corporation v. Semillano, 637 Phil. 115, 129-130 (2010).
78Tomas Lao Construction v. National Labor Relations Commission, 344 Phil. 268, 286-287 (1997).
79Omni Hauling Services, Inc, v. Bon, supra note 64 at 282.