G.R. No. 224979 - Lim vs. People

Petitioner Meralco Industrial Engineering Services Corporation (MIESCOR) is a corporation and client of the private respondents.
Private respondent Ofelia P. Landrito General Services (OPLGS) is a business providing janitorial and maintenance services, with Ofelia P. Landrito as its Proprietor and General Manager.
On 7 November 1984, MIESCOR and OPLGS executed Contract Order No. 166-84, whereby OPLGS would supply janitorial services with labor, materials, tools, equipment, and supervision at MIESCOR’s Rockwell Thermal Plant in Makati City.
OPLGS assigned 49 employees as janitors to MIESCOR’s site, each receiving a daily wage of P51.50.

On 20 September 1989, the 49 employees (complainants) filed a complaint for illegal deduction, underpayment, non-payment of various labor benefits, including overtime and holiday pay, against OPLGS before the Labor Arbiter. The case was docketed as NLRC NCR Case No. 00-09-04432-89.
Due to Republic Act No. 6727 (Wage Rationalization Act), the contract was amended 10 times, with the latest on 3 November 1989 increasing the minimum daily wage from P63.55 to P89.00.
MIESCOR terminated the contract effective 31 January 1990, pulling out the complainants from their worksite.

On 27 February 1990, complainants amended their complaint to include illegal dismissal charges and impleaded MIESCOR as respondent.
The Labor Arbiter’s Decision on 26 March 1991 dismissed the complaint against MIESCOR but ordered OPLGS to pay unpaid wages, separation pay, overtime pay, and attorney’s fees totaling P487,287.07. Other claims were dismissed.
OPLGS appealed, arguing among others that many complainants had desisted, that the Arbiter erred procedurally, and questioned the extent of MIESCOR’s liability.

On 28 May 1993, NLRC affirmed the Labor Arbiter’s decision but modified it, holding MIESCOR solidarily liable with OPLGS for wage differentials and unpaid overtime pay, citing Articles 107 and 109 of the Labor Code.
Both parties filed motions for reconsideration; private respondents challenged their liability for separation pay claiming abandonment, while petitioner sought exclusion from liability.
On 30 July 1993, the NLRC denied OPLGS’ motion and directed enforcement of the award through a surety bond posted by OPLGS, leaving determination of final liability to the Labor Arbiter.

OPLGS filed a Petition for Certiorari (G.R. No. 111506) alleging grave abuse of discretion by the NLRC but the Supreme Court dismissed it on 23 May 1994 for lack of grave abuse.
Labor Arbiter’s Order on 5 October 1994 clarified liability: MIESCOR was solidarily liable with OPLGS for wage underpayment and unpaid overtime pay only; separation pay liability was solely that of OPLGS. Any reimbursement between parties was accordingly addressed.
Both parties appealed the Labor Arbiter’s Order to the NLRC.

On 25 April 1995, NLRC initially affirmed the Labor Arbiter’s Order but later, on 27 July 1995, set aside this affirmation and required appeal bonds for both parties to perfect appeals.
On 30 January 1996, NLRC ruled that MIESCOR remains solidarily liable for wage awards (underpayment and overtime) but that enforcement should pass exclusively through OPLGS’ surety bond, effectively relieving MIESCOR of direct liability for separation pay.
OPLGS’ motion for reconsideration was denied on 30 October 1996, making the Decision final and executory.
OPLGS filed a Petition for Certiorari before the Supreme Court, which on 9 December 1998 referred the case to the Court of Appeals for resolution.

On 24 April 2000, the Court of Appeals modified the NLRC decision and held MIESCOR solidarily liable with OPLGS for payment of the complainants’ separation pay, reasoning that Article 109 of the Labor Code imposes joint liability for any labor code violation regardless of employer-employee relationship or labor standards status of the violation.
MIESCOR’s Motion for Reconsideration was denied on 27 September 2000.
MIESCOR filed the present Petition for Review on Certiorari with the Supreme Court.

Whether the Court of Appeals gravely erred in extending MIESCOR’s solidary liability to include separation pay despite prior final rulings limiting MIESCOR’s liability to wage underpayment and unpaid overtime pay.
Whether the principle of the law of the case bars modification of the NLRC’s findings on MIESCOR’s non-liability for separation pay.
Whether the Court of Appeals correctly applied the provisions of Articles 106, 107, and 109 of the Labor Code regarding the extent of solidary liability of an indirect employer.
Whether the employer-employee relationship exists between MIESCOR (petitioner) and the complainants, thereby justifying solidary liability for separation pay.
Whether there exists proof of conspiracy between MIESCOR and OPLGS to make MIESCOR liable for illegal dismissal and separation pay.