Facts:

The case involves San Miguel Corporation as the petitioner and a group of respondents consisting of Luisito de Ocampo and 133 other employees. The complaint was filed on February 8, 1983, against Reliable Contractor and San Miguel Corporation for underpayment of wages and nonpayment of the 13th month pay for the years 1980 to 1982. The respondents claimed that they were regular and permanent employees of Reliable Contractor, which had a contract with San Miguel Corporation to perform loading and unloading tasks and repair work on shells and pellets on a piecework basis until December 1982. During this period, the employees alleged that they were not compensated for their 13th month pay and were only receiving a daily wage of P 17.00.

San Miguel Corporation contended that under Presidential Decree No. 851 and its implementing rules, it was not jointly and severally liable for the payment of the 13th month pay owed to Reliable's employees, asserting that it had fulfilled...

Facts:

1. Parties Involved:

   • Petitioner: San Miguel Corporation (SMC).
   • Respondents: National Labor Relations Commission (NLRC), Labor Arbiter Pelagio A. Carpio, and 134 employees of Reliable Contractor, including Luisito de Ocampo.

2. Nature of the Case:

   • The respondents filed a complaint against SMC and Reliable Contractor for underpayment of wages and nonpayment of 13th month pay for the years 1980 to 1982.

3. Employment Arrangement:

   • The respondents were regular and permanent employees of Reliable Contractor, which had a service contract with SMC to perform loading, unloading, and repair tasks on a piece-work basis until December 1982.
   • During this period, the respondents were paid a daily wage of P17.00 but did not receive their 13th month pay.

4. Defenses Raised:

   • SMC: Argued that under P.D. No. 851 and its implementing rules, it is not jointly and severally liable with Reliable Contractor for the 13th month pay of the latter's employees. SMC claimed it had paid Reliable the agreed contractor's fees, which included wages, emergency allowances, and 13th month pay.
   • Reliable Contractor: Claimed exemption from P.D. No. 851 coverage because the respondents were hired on a task basis.

5. Labor Arbiter's Decision:

   • Dismissed the claim for underpayment of wages but ordered SMC and Reliable to pay the respondents their 13th month pay for 1980 to 1982.

6. NLRC Decision:

   • Affirmed the Labor Arbiter's decision, holding SMC solidarily liable with Reliable for the 13th month pay.

7. Petition for Certiorari:

   • SMC challenged the NLRC's decision, arguing that P.D. No. 851 does not provide for solidary liability between the principal (SMC) and the contractor (Reliable).

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Solidary Liability Under the Labor Code:

   • The Court applied Articles 106, 107, and 109 of the Labor Code, which provide for the solidary liability of an employer (or indirect employer) and its contractor or subcontractor for violations of the Labor Code, including nonpayment of wages and benefits.
   • Article 107 specifically extends the solidary liability under Article 106 to indirect employers, such as SMC, which contracted with Reliable for the performance of work.

2. Constitutional Mandate to Protect Labor:

   • The Court emphasized the constitutional mandate to afford full protection to labor, which justifies holding SMC solidarily liable with Reliable for the 13th month pay.

3. Nonpayment as a Violation of the Labor Code:

   • Nonpayment of the 13th month pay constitutes a violation of the Labor Code, making both the direct employer (Reliable) and the indirect employer (SMC) solidarily liable under Article 109.

4. No Grave Abuse of Discretion by NLRC:

   • The Court found no grave abuse of discretion in the NLRC's decision, as it was consistent with the Labor Code's provisions and the constitutional policy of protecting workers' rights.

Conclusion:

The Supreme Court affirmed the NLRC's decision, holding San Miguel Corporation solidarily liable with Reliable Contractor for the payment of the 13th month pay to the respondents. The petition was dismissed, and costs were imposed on SMC.