G.R. No. 188694 - Atienza vs. People

On February 1, 1978, petitioner Del Rosario & Sons Logging Enterprises, Inc. entered into a "Contract of Services" with private respondent Calmar Security Agency.
Under the contract, the Security Agency was obligated to supply security guards to the petitioner at a rate of P300.00 per month per guard.

On October 4, 1979, three security guards—Paulino Mabuti, Napoleo Borata, and Silvino Tudio—filed a complaint against both the Security Agency and the petitioner.
The allegations included underpayment of salary, non-payment of living allowance, and the non-payment of 13th month pay.
Subsequently, complaints were filed by five additional guards for the same causes of action.

Petitioner, through its answer, contended that it bore no liability as there was no employee-employer relationship between it and the complainants.
The Security Agency defended itself by alleging that the payments received under the Contract of Services were inadequate, thereby hindering its ability to comply with the labor wage and benefit requirements.

The case was assigned for compulsory arbitration where, on December 21, 1979, the Labor Arbiter rendered a decision.
The Labor Arbiter dismissed the complaint against the petitioner on the ground that no employer-employee relationship existed but ordered the Security Agency to pay the complainants a total of P2,923.17.

The Security Agency appealed the Labor Arbiter’s decision to the National Labor Relations Commission (NLRC).
The NLRC modified the decision by holding the petitioner jointly and severally liable with the Security Agency, on the basis that the petitioner was an indirect employer pursuant to Articles 106 and 107 of the Labor Code, as amended.
Petitioner sought reconsideration, challenging several points including:

The due course given to an appeal that was not verified under oath and had a delayed payment of the required appeal fee.
The imposition of joint and several liability with the Security Agency.
The refusal to entertain its Motion for Reconsideration.

The alleged procedural defects in the Security Agency’s appeal (lack of verification and late payment of the appeal fee) were deemed easily correctable and non-fatal.
Precedents and principles were discussed, highlighting that the failure to pay docketing or appeal fees does not automatically result in dismissal.
The NLRC’s discretion, guided by the interest of substantial justice and the need to resolve controversies on the merits, was emphasized.

Whether the lack of verification and the delayed payment of the appeal fee, as alleged by the petitioner, warranted the dismissal of the appeal.
Whether such procedural lapses should impede the proper adjudication of the merits of the case.

Whether the petitioner, by entering into a Contract of Services with the Security Agency that subsequently hired the complainants, became an indirect employer under Articles 106 and 107 of the Labor Code.

Whether imposing joint and several liability on the petitioner was appropriate given the contractual arrangement and the application of the Labor Code provisions on indirect employment.

Whether the strict adherence to procedural technicalities (such as the verification of appeal and timely fee payment) should prevail over the substantive interests of justice and due process in labor-related disputes.