Facts:

The case, G.R. No. 160506, involved multiple petitioners led by Joeb M. Aliviado and others against respondents Procter & Gamble Philippines, Inc. (P&G) and Promm-Gem, Inc. On March 9, 2010, the Supreme Court addressed a labor dispute regarding the employment status of various workers previously assigned to P&G through a contractor, SAPS, which was deemed a labor-only contractor. The petitioners composed of former employees were dismissed from their positions and sought reinstatement. The initial decision from the Court of Appeals, dated March 21, 2003, ruled against the petitioners. The Supreme Court’s ruling declared Promm-Gem a legitimate independent contractor while labeling SAPS as a labor-only contractor, which directly linked the employees to P&G as their employer. Consequently, it found both SAPS and P&G liable for illegal dismissal. The petitioners were entitled to reinstatement, backwages, and damages for bad faith dismissal. The latter part of the

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Facts:

Background and Parties

• The case involves petitioners—several employees—and respondents Procter & Gamble Phils., Inc. (P&G) along with two contracting firms: Promm-Gem, Inc. and Sales and Promotions Services (SAPS).
• The petitioners brought the case challenging the dismissal of employees who worked through the contractors for P&G, alleging illegal dismissal with attendant claims for reinstatement, backwages, moral damages, and attorney’s fees.

Contractual Relationships and Nature of Contractors

• The Court found that Promm-Gem is a legitimate independent contractor.
• Evidence of substantial capitalization, including authorized and paid-in capital, long-term and current assets, its own warehouse, office space, and registered vehicles.
• It maintained a record of treating its workers as regular employees by providing materials and uniforms.
• Conversely, SAPS was determined to be a labor-only contractor.
• SAPS exhibited a lack of substantial capital—in this case, a paid-in capital of only P31,250—and insufficient investment in tools, equipment, or other assets.
• Its workers performed merchandising and promotional activities directly related to P&G’s business, fulfilling the criteria under Article 106 of the Labor Code and the Omnibus Rules Implementing the Labor Code, as amended by Department Order No. 18-02.

Decisions Rendered by the Court

• On March 9, 2010, the Court rendered a Decision holding that:
• Promm-Gem is a legitimate independent contractor.
• SAPS is a labor-only contractor with its employees being de facto employees of P&G.
• Both Promm-Gem and SAPS/P&G were guilty of illegal dismissal.
• Petitioners were entitled to immediate reinstatement without loss of seniority and with full backwages from the date of dismissal.
• The employees of SAPS/P&G were entitled to moral damages and attorney’s fees due to the bad faith in their dismissal.
• The dispositive order instructed the reinstatement of the affected employees, with specific monetary awards for moral damages and attorney’s fees.

Subsequent Motions and Procedural Posture

• After the March 9, 2010 Decision, various motions were filed:
• P&G filed a Motion for Reconsideration along with an Opposition and a Supplemental Opposition.
• Petitioners, on the other hand, filed a Motion for Partial Reconsideration and a Comment/Opposition addressing P&G’s motions.
• The Court denied P&G’s Motion for Reconsideration and the petitioners’ Motion for Partial Reconsideration on June 16, 2010.
• Entry of Judgment was made on July 27, 2010, thereby making the decision final and executory.
• Subsequent attempts by P&G to file additional pleadings—including a second motion for reconsideration and related motions to refer the case to the Supreme Court En Banc—were noted, but ultimately held to be untimely and prohibited.

Issue:

Determination of Contractor Status

• Whether Promm-Gem is a legitimate independent contractor or if it should be classified as a labor-only contractor.
• Whether SAPS, given its lack of substantial capital and the nature of its operations, qualifies as a labor-only contractor, thereby rendering its employees as de facto employees of P&G.

Finality and Immutability of the March 9, 2010 Decision

• Whether the issuance of the Entry of Judgment on July 27, 2010, effectively rendered the March 9, 2010 Decision final and immutable.
• Whether subsequent pleadings, specifically the second motion for reconsideration and related motions by P&G, should be entertained despite the finality of the decision.

Award of Moral Damages and Attorney’s Fees

• Whether the manner of dismissal—characterized by a sudden, verbal notice without due process—justifies the award of moral damages and attorney’s fees.
• Whether P&G can disassociate itself from the dismissal actions executed through SAPS, given the established agency relationship inherent in labor-only contracting.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)