G.R. No. 106231 - Hawaiian-Philippine Co. vs. Gulmatico

On July 4, 1989, the respondent union (National Federation of Sugar Workers-Food and General Trades) filed RAB VI Case No. 06-07-10256-89 against the petitioner, Hawaiian-Philippine Company, asserting claims under Republic Act 809 (The Sugar Act of 1952).
The union claimed that sugar farm workers in the petitioner’s milling district had not received the benefits mandated by RA 809, particularly the prescribed division of increased participation (sixty percent for laborers and forty percent for planters).

The petitioner filed a Motion to Dismiss on July 31, 1989, followed by a Supplemental Motion to Dismiss on September 19, 1989.

The Labor Arbiter lacked jurisdiction in the case as there was no employer-employee relationship between the petitioner and the farm workers.

ii. The respondent union had no valid cause of action against the petitioner.

On August 23, 1989, the respondent union submitted an Opposition to the Motion to Dismiss.
A Reply to the Opposition along with a Citation of Authorities was then filed by the petitioner on October 3, 1989.

Complainants such as Efren Elaco, Bienvenido Gulmatico, Alberto Amacio, Narciso Vasquez, Mario Casociano, and other sugar farm workers who had been milling with the petitioner from 1979 to the present.

ii. Additional respondents, including various sugar planters identified by name and as groups, were also joined.

On August 27, 1990, Ramon Jison, one of the parties impleaded in the amended complaint, filed a “Motion to Dismiss and/or to Include Necessary Parties,” seeking the inclusion of additional planters’ groups (Asociacion de Hacenderos de Silan-Saravia, Inc. and the Associate Planters of Silay-Saravia, Inc.).

On June 29, 1992, the public respondent Labor Arbiter, Reynaldo J. Gulmatico, issued the Order denying both the Motion to Dismiss and the Supplemental Motion to Dismiss filed by the petitioner.
The Order maintained the proceeding against the petitioner, based partly on observations regarding the processing of the quedans and certification issues related to the payment of the workers’ shares.

The petitioner argued that there is no employer-employee relationship between its milling operation and the sugar workers, contending that such relationship is a prerequisite under Article 217 of the Labor Code for the Labor Arbiter’s jurisdiction.
The petitioner supported its stance by citing earlier cases (e.g., San Miguel Corporation vs. NLRC and Federation of Free Farmers vs. Court of Appeals) and the Rules and Regulations Implementing RA 809, which delineate the responsibilities for the distribution of proceeds to laborers exclusively to the planters.
In contrast, the public respondent and the respondent union maintained that a privity or indirect relationship exists, suggesting that the petitioner might still bear liability for the workers’ claims due to procedural omissions (e.g., certification of delivery of shares).

Does the Labor Arbiter have jurisdiction over the case against the petitioner given that there is no direct employer-employee relationship between the petitioner (sugar central) and the sugar workers?

Do the respondent union and/or the individual sugar workers have a valid cause of action against the petitioner under RA 809, considering the legal obligations prescribed by the law and the applicable administrative rules?