Case Digest (G.R. No. 148490)
Facts:
7K Corporation v. National Labor Relations Commission, Rene A. Corona, and Alex B. Catingan, G.R. No. 148490, November 22, 2006, the Supreme Court First Division, Austria‑Martinez, J., writing for the Court.In February 1997 7K Corporation (petitioner) contracted with Universal Janitorial and Allied Services (Universal) to supply drivers at P4,637.00 per driver per month. Rene A. Corona and Alex B. Catingan (private respondents) were interviewed by petitioner and began working on March 7 and April 11, 1997, respectively. Petitioner paid Universal the contractual monthly rate; petitioner directly paid the private respondents for overtime. Disputes arose over alleged underpayment of overtime (time cards showing up to 70 hours reduced by petitioner’s accounting to 20 hours). After their grievances were ignored, the private respondents filed separate complaints for illegal dismissal, salary differentials, unpaid overtime, reinstatement with backwages against Universal and/or petitioner before the Labor Arbiter (RAB-11-11-01127-97 and RAB-11-12-01138-97), which were consolidated and tried together.
On November 20, 1998 the Labor Arbiter (LA) Antonio M. Villanueva found Universal to be the employer and declared the termination illegal, awarding six months backwages, separation pay and other monetary claims totaling P66,803.81. Universal appealed to the National Labor Relations Commission (NLRC), contending that petitioner was the direct employer, that Universal lacked control, and that the respondents were not illegally dismissed. Universal argued petitioner had direct control and paid overtime, and thus petitioner should be held liable.
On March 30, 1999 the NLRC modified the LA decision: it deleted the backwages award (finding no illegal dismissal) but maintained awards for salary differentials, proportionate 13th month and holiday pay, and held Universal to be a labor‑only contractor, thereby making petitioner solidarily liable for those monetary claims. The NLRC explained that Universal had not alleged or proved substantial capital or investment and that the employees performed activities directly related to the principal’s business. The NLRC denied motions for reconsideration on August 23, 1999.
Petitioner filed a petition for certiorari with the Court of Appeals (CA) arguing the NLRC had no jurisdiction because the LA decision had become final as to petitioner and the private respondents, and that the NLRC improperly implicated a non‑party and erred in declaring Universal a labor‑only contractor. The CA dismissed the petition on September 29, 2000 (and issued a subsequent Resolution dated May 25, 2001), holding Universal’s ap...(Subscriber-Only)
Issues:
- Did the NLRC have jurisdiction to entertain Universal’s appeal and was the Labor Arbiter’s decision final and executory as to petitioner and the private respondents?
- Did the NLRC acquire jurisdiction over petitioner even though petitioner was neither an appellant nor an appellee before the NLRC?
- Did the NLRC and the CA err in declaring Universal a labor‑only contractor and holding petitioner solidarily liable for the...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)