THIRD DIVISION
PLACIDO O. URBANES,
JR., DOING BUSINESS UNDER
THE NAME & STYLE
OF CATALINA SECURITY AGENCY,
Petitioner,
G.R.
No.
122791
February 19, 2003
-versus-
THE HONORABLE
SECRETARY
OF LABOR AND
EMPLOYMENT AND
SOCIAL
SECURITY SYSTEM,
Respondents. chanrobles virtuallaw libraryred
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D E C I S I O N
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CARPIO-MORALES,
J.:
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Before this Court is a
Petition for Certiorari under Rule 65 of the Revised Rules of Court
assailing
the June 22, 1995 Order of the Department of Labor and Employment
(DOLE)
Secretary which set aside the September 16, 1994 Order of the Regional
Director, National Capital Region (NCR).chanrobles virtuallaw libraryred
The antecedent facts
of the case are as follows:chanrobles virtuallaw libraryred
Petitioner Placido O.
Urbanes, Jr., doing business under the name and style of Catalina
Security
Agency, entered into an agreement[1]
to provide security services to respondent Social Security System
(SSS).chanrobles virtuallaw libraryred
During the effectivity
of the agreement, petitioner, by letter of May 16, 1994,[2]
requested the SSS for the upward adjustment of their contract rate in
view
of Wage Order No. NCR-03 which was issued by the Regional Tripartite
Wages
and Productivity Board-NCR pursuant to Republic Act 6727 otherwise
known
as the Wage Rationalization Act, the pertinent provision of which wage
order reads:chanrobles virtuallaw libraryred
Section 9. In the case
of contracts for construction projects and for security, janitorial and
similar services, the prescribed amount set forth herein for covered
workers
shall be borne by the principals or the clients of the
construction/service
contractors and the contract shall be deemed amended accordingly. In
the
event, however, that the principal or client failed to pay the
prescribed
increase, the construction/service contractors shall be jointly and
severally
liable with the principal or client. (Emphasis and underscoring
supplied).
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As his May 16, 1994
letter to the SSS remained unheeded, petitioner sent another letter,[3]
dated June 7, 1994, reiterating the request, which was followed by
still
another letter,[4]
dated June 8, 1994.chanrobles virtuallaw libraryred
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On June 24, 1994,
petitioner
pulled out his agency’s services from the premises of the SSS and
another
security agency, Jaguar, took over.[5]
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On June 29, 1994,
petitioner
filed a complaint[6]
with the DOLE-NCR against the SSS seeking the implementation of Wage
Order
No. NCR-03.chanrobles virtuallaw libraryred
In its position paper,[7]
the SSS prayed for the dismissal of the complaint on the ground that
petitioner
is not the real party in interest and has no legal capacity to file the
same. In any event, it argued that if it had any obligation, it was to
the security guards.chanrobles virtuallaw libraryred
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On the other hand,
petitioner in his position paper,[8]
citing Eagle Security Agency, Inc. v. NLRC,[9]
contended that the security guards assigned to the SSS do not have any
legal basis to file a complaint against it for lack of contractual
privity.chanrobles virtuallaw libraryred
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Finding for petitioner,
the Regional Director of the DOLE-NCR issued an Order[10]
of September 16, 1994, the dispositive portion of which reads, quoted
verbatim:
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WHEREFORE, premises
considered, the respondent Social Security System (SSS) is hereby
Ordered
to pay Complainant the total sum of ONE MILLION SIX HUNDRED THOUSAND
EIGHT
HUNDRED FIFTY EIGHT AND 46/100 (P 1,600,858.46) representing the wage
differentials
under Wage Order No. NCR-03 of the ONE HUNDRED SIXTY EIGHT (168)
Security
Guards of Catalina Security Agency covering the period from December
16,
1993 to June 24, 1994, inclusive within ten (10) days from receipt
hereof,
otherwise a writ of execution shall be issued to enforce this Order.chanrobles virtuallaw libraryred
The claims for the payment
of interest and Attorney’s fees are hereby ordered dismissed for want
of
jurisdiction.chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
The SSS moved to reconsider
the September 16, 1994 Order of the Regional Director, praying that the
computation be revised.[11]chanrobles virtuallaw libraryred
By Order[12]
of December 9, 1994, the Regional Director modified his September 16,
1994
Order by reducing the amount payable by the SSS to petitioner. The
dispositive
portion of the Regional Director’s Order of December 9, 1994 reads:chanrobles virtuallaw libraryred
WHEREFORE, premises
considered, the Order of this Office dated September 16, 1994 is hereby
modified. Respondent Social Security System is hereby ordered to pay
complainant
the amount of ONE MILLION TWO HUNDRED THIRTY SEVEN THOUSAND SEVEN
HUNDRED
FORTY PESOS (P 1,237,740.00) representing the wage differentials under
Wage Order No. NCR-03 of the one hundred sixty-eight (168) security
guards
of Catalina Security Agency covering the period from December 16, 1993
to June 20, 1994, inclusive, within ten (10) days from receipt of this
Order, otherwise, execution shall issue.chanrobles virtuallaw libraryred
The SSS appealed[13]
to the Secretary of Labor upon the following assigned errors, quoted
verbatim:chanrobles virtuallaw libraryred
A. THE REGIONAL DIRECTOR
HAS NO JURISDICTION OF THE CASE AT BAR.chanrobles virtuallaw libraryred
B. THE HONORABLE REGIONAL
DIRECTOR ERRED IN FINDING THAT COMPLAINANT IS THE REAL PARTY IN
INTEREST
AND HAS LEGAL CAPACITY TO FILE THE CASE.chanrobles virtuallaw libraryred
C. THE HONORABLE REGIONAL
DIRECTOR ERRED IN ADOPTING COMPLAINANT’S COMPUTATION FOR WAGE
ADJUSTMENT
UNDER WAGE ORDER NO. NCR-03 AS BASIS OF RESPONDENT’S LIABILITY.[14]chanrobles virtuallaw libraryred
The Secretary of Labor,
by Order[15]
of June 22, 1995, set aside the order of the Regional Director and
remanded
the records of the case "for recomputation of the wage differentials
using
P 5,281.00 as the basis of the wage adjustment." And the Secretary held
petitioner’s security agency "JOINTLY AND SEVERALLY liable for wage
differentials,
the amount of which should be paid DIRECTLY to the security guards
concerned."chanrobles virtuallaw libraryred
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Petitioner’s Motion
for Reconsideration of the DOLE Secretary’s Order of June 22, 1995
having
been denied by Order[16]
of October 10, 1995, the present petition was filed, petitioner
contending
that the DOLE Secretary committed grave abuse of discretion when he:chanrobles virtuallaw libraryred
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1.
TOTALLY IGNORED THE PROVISION OF ARTICLE 129 OF THE LABOR CODE FOR
PERFECTING
AN APPEAL FROM THE DECISION OF THE REGIONAL DIRECTOR UNDER ARTICLE 129
INVOKED BY RESPONDENT SSS;chanrobles virtuallaw libraryred
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2. DISREGARDED
THE PROVISION ON APPEALS FROM THE DECISIONS OR RESOLUTIONS OF THE
REGIONAL
DIRECTOR, DOLE, UNDER ARTICLE 129 OF THE LABOR CODE, AS AMENDED BY
REPUBLIC
ACT NO. 6715;chanrobles virtuallaw libraryred
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3. TOTALLY
OVERLOOKED
THE LAW AND PREVAILING JURISPRUDENCE WHEN IT ACTED ON THE APPEAL OF
RESPONDENT
SSS.[17]
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Petitioner asserts
that the Secretary of Labor does not have jurisdiction to review
appeals
from decisions of the Regional Directors in complaints filed under
Article
129 of the Labor Code[18]
which provides:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
ART. 129. RECOVERY OF
WAGES, SIMPLE MONEY CLAIMS AND OTHER BENEFITS. - Upon complaint of any
interested party, the regional director of the Department of Labor and
Employment or any duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and
decide any matter involving the recovery of wages and other monetary
claims
and benefits, including legal interest, owing to an employee or person
employed in domestic or household service or househelper under this
Code,
arising from employer-employee relations: Provided, That such complaint
does not include a claim for reinstatement; Provided, further, That the
aggregate money claim of each employee or househelper does not exceed
Five
Thousand pesos (P5,000.00). The regional director or hearing officer
shall
decide or resolve the complaint within thirty (30) calendar days from
the
date of the filing of the same. Any sum thus recovered on behalf of any
employee or househelper pursuant to this Article shall be held in a
special
deposit account by, and shall be paid on order of, the Secretary of
Labor
and Employment or the regional director directly to the employee or
househelper
concerned. Any such sum not paid to the employee or househelper,
because
he cannot be located after diligent and reasonable effort to locate him
within a period of three (3) years, shall be held as a special fund of
the Department of Labor and Employment to be used exclusively for the
amelioration
and benefit of workers.chanrobles virtuallaw libraryred
Any decision or resolution
of the regional director or officer pursuant to this provision may be
appealed
on the same grounds provided in Article 223 of this Code, within five
(5)
calendar days from receipt of a copy of said decision or resolution, to
the National Labor Relations Commission which shall resolve the appeal
within ten (10) calendar days from submission of the last pleading
required
or allowed under its rules.chanrobles virtuallaw libraryred
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x x x (Emphasis
supplied).chanrobles virtuallaw libraryred
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Petitioner thus
contends
that as the appeal of SSS was filed with the wrong forum, it should
have
been dismissed.[19]chanrobles virtuallaw libraryred
The SSS, on the other
hand, contends that Article 128, not Article 129, is applicable to the
case. Article 128 provides:chanrobles virtuallaw libraryred
ART. 128. VISITORIAL
AND ENFORCEMENT POWERS -chanrobles virtuallaw libraryred
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(b) Notwithstanding
the provisions of Article 129 and 217 of this Code to the contrary, and
in cases where the relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly authorized
representatives
shall have the power to issue compliance orders to give effect to labor
legislation based on the findings of labor employment and enforcement
officers
or industrial safety engineers made in the course of inspection.chanrobles virtuallaw libraryred
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An order issued by
the duly authorized representative of the Secretary of Labor and
Employment
under this article may be appealed to the latter.
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x x x.chanrobles virtuallaw libraryred
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Neither the
petitioner’s
contention nor the SSS’s is impressed with merit. Lapanday Agricultural
Development Corporation v. Court of Appeals[20]
instructs so. In that case, the security agency filed a complaint
before
the Regional Trial Court (RTC) against the principal or client Lapanday
for the upward adjustment of the contract rate in accordance with Wage
Order Nos. 5 and 6. Lapanday argued that it is the National Labor
Relations
Commission, not the civil courts, which has jurisdiction to resolve the
issue in the case, it involving the enforcement of wage adjustment and
other benefits due the agency’s security guards as mandated by several
wage orders. Holding that the RTC has jurisdiction over the
controversy,
this Court ruled:chanrobles virtuallaw libraryred
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We agree with the
respondent
that the RTC has jurisdiction over the subject matter of the present
case.
It is well settled in law and jurisprudence that where no
employer-employee
relationship exists between the parties and no issue is involved which
may be resolved by reference to the Labor Code, other labor statutes or
any collective bargaining agreement, it is the Regional Trial Court
that
has jurisdiction. In its complaint, private respondent is not seeking
any
relief under the Labor Code but seeks payment of a sum of money and
damages
on account of petitioner's alleged breach of its obligation under their
Guard Service Contract. The action is within the realm of civil law
hence
jurisdiction over the case belongs to the regular courts. While the
resolution
of the issue involves the application of labor laws, reference to the
labor
code was only for the determination of the solidary liability of the
petitioner
to the respondent where no employer-employee relation exists.[21]
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In the case at bar,
even if petitioner filed the complaint on his and also on behalf of the
security guards,[22]
the relief sought has to do with the enforcement of the contract
between
him and the SSS which was deemed amended by virtue of Wage Order No.
NCR-03.
The controversy subject of the case at bar is thus a civil dispute, the
proper forum for the resolution of which is the civil courts.chanrobles virtuallaw libraryred
But even assuming arguendo
that petitioner’s complaint were filed with the proper forum, for lack
of cause of action it must be dismissed.chanrobles virtuallaw libraryred
Articles 106, 107 and
109 of the Labor Code provide:chanrobles virtuallaw libraryred
ART. 106. CONTRACTOR
OR SUBCONTRACTOR. - Whenever an employer enters into contract with
another
person for the performance of the former’s work, the employees of the
contractor
and of the latter’s subcontractor, if any, shall be paid in accordance
with the provisions of this Code.chanrobles virtuallaw libraryred
In the event that the
contractor or subcontractor fails to pay the wage of his employees in
accordance
with this Code, the employer shall be jointly and severally liable with
his contractor or subcontractor to such employees to the extent of the
work performed under the contract, in the same manner and extent that
he
is liable to employees directly employed by him.chanrobles virtuallaw libraryred
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ART. 107 INDIRECT EMPLOYER.
- The provisions of the immediately preceding Article shall likewise
apply
to any person, partnership, association or corporation which, not being
an employer, contracts with an independent contractor for the
performance
of any work, task, job or project.chanrobles virtuallaw libraryred
ART. 109. SOLIDARY LIABILTY.
- The provisions of existing laws to the contrary notwithstanding,
every
employer or indirect employer shall be held responsible with his
contractor
or subcontractor for any violation of any provision of this Code. For
purposes
of determining the extent of their civil liability under this Chapter,
they shall be considered as direct employers.chanrobles virtuallaw libraryred
In the case of Eagle
Security Agency, Inc. v. NLRC,[23]
this Court held:chanrobles virtuallaw libraryred
The Wage Orders are
explicit that payment of the increases are "to be borne" by the
principal
or client. "To be borne", however, does not mean that the principal,
PTSI
in this case, would directly pay the security guards the wage and
allowance
increases because there is no privity of contract between them. The
security
guards' contractual relationship is with their immediate employer,
EAGLE.
As an employer, EAGLE is tasked, among others, with the payment of
their
wages (See Article VII Sec. 3 of the Contract for Security Services,
supra
and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 665).chanrobles virtuallaw libraryred
On the other hand, there
existed a contractual agreement between PTSI and EAGLE wherein the
former
availed of the security services provided by the latter. In return, the
security agency collects from its client payment for its security
services.
This payment covers the wages for the security guards and also expenses
for their supervision and training, the guards' bonds, firearms with
ammunitions,
uniforms and other equipments, accessories, tools, materials and
supplies
necessary for the maintenance of a security force.chanrobles virtuallaw libraryred
Premises considered,
the security guards' immediate recourse for the payment of the
increases
is with their direct employer, EAGLE. However, in order for the
security
agency to comply with the new wage and allowance rates it has to pay
the
security guards, the Wage Orders made specific provision to amend
existing
contracts for security services by allowing the adjustment of the
consideration
paid by the principal to the security agency concerned. What the Wage
Orders
require, therefore, is the amendment of the contract as to the
consideration
to cover the service contractor's payment of the increases mandated. In
the end, therefore, ultimate liability for the payment of the increases
rests with the principal.chanrobles virtuallaw libraryred
In view of the foregoing,
the security guards should claim the amount of the increases from
EAGLE.
Under the Labor Code, in case the agency fails to pay them the amounts
claimed, PTSI should be held solidarily liable with EAGLE (Articles
106,
107 and 109). Should EAGLE pay, it can claim an adjustment from PTSI
for
an increase in consideration to cover the increases payable to the
security
guards.chanrobles virtuallaw libraryred
x x x (Emphasis and
underscoring supplied).chanrobles virtuallaw libraryred
Passing on the foregoing
disquisition in Eagle, this Court, in Lapanday,[24]
held:chanrobles virtuallaw libraryred
It is clear also from
the foregoing that it is only when [the] contractor pays the increases
mandated that it can claim an adjustment from the principal to cover
the
increases payable to the security guards. The conclusion that the right
of the contractor (as principal debtor) to recover from the principal
(as
solidary co-debtor) arises only if he has paid the amounts for which
both
of them are jointly and severally liable is in line with Article 1217
of
the Civil Code which provides:
"Art. 1217. Payment
made by one the solidary debtors extinguishes the obligation. If two or
more solidary debtors offer to pay, the creditor may choose which offer
to accept.chanrobles virtuallaw libraryred
He who made payment
make claim from his co-debtors only the share which corresponds to
each,
with interest for the payment already made. If the payment is made
before
the debt is due, no interest for the intervening period may be
demanded.
x x x"[25]chanrobles virtuallaw libraryred
In fine, the liability
of the SSS to reimburse petitioner arises only if and when petitioner
pays
his employee-security guards "the increases" mandated by Wage Order No.
NCR-03.chanrobles virtuallaw libraryred
The records do not show
that petitioner has paid the mandated increases to the security guards.
The security guards in fact have filed a complaint[26] with the NLRC
against
petitioner relative to, among other things, underpayment of wages.chanrobles virtuallaw libraryred
WHEREFORE, the present
petition is hereby DISMISSED, and petitioner’s complaint before the
Regional
Director is dismissed for lack of jurisdiction and cause of action.chanrobles virtuallaw libraryred
SO ORDERED.chanrobles virtuallaw libraryred
Puno, J., (Chairman),
Panganiban, Sandoval-Gutierrez and Corona, JJ., concur.chan
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____________________________
Endnotes:
[1]
Rollo at 127-133.chanrobles virtuallaw libraryred
[2]
Id. at 101-103.chanrobles virtuallaw libraryred
[3]
Id. at 105.chanrobles virtuallaw libraryred
[4]
Id. at 107.chanrobles virtuallaw libraryred
[5]
Id. at 499, 523.chanrobles virtuallaw libraryred
[6]
Id. at 109-116.chanrobles virtuallaw libraryred
[7]
Id. at 172-180.chanrobles virtuallaw libraryred
[8]
Id. at 118-126.chanrobles virtuallaw libraryred
[9]
173 SCRA 479 (1989).chanrobles virtuallaw libraryred
[10]
Rollo at 234-241.chanrobles virtuallaw libraryred
[11]
Id. at 243-246.chanrobles virtuallaw libraryred
[12]
Id. at 299-301.chanrobles virtuallaw libraryred
[13]
Id. at 303-314.chanrobles virtuallaw libraryred
[14]
Id. at 308-309.chanrobles virtuallaw libraryred
[15]
Id. at 366-371.chanrobles virtuallaw libraryred
[16]
Id. at 373-375.chanrobles virtuallaw libraryred
[17]
Id. at 14.chanrobles virtuallaw libraryred
[18]
Id. at 510.chanrobles virtuallaw libraryred
[19]
Id. at 17.chanrobles virtuallaw libraryred
[20]
324 SCRA 39 (2000), citing Manliquez v. Court of Appeals, 232 SCRA 427
(1994) and Dai-Chi Electronics Manufacturing Corp. v. Villarama, Jr.,
238
SCRA 267 (1994).chanrobles virtuallaw libraryred
[21]
Ibid.chanrobles virtuallaw libraryred
[22]
Rollo at 114.chanrobles virtuallaw libraryred
[23]
Supra.chanrobles virtuallaw libraryred
[24]
Supra.chanrobles virtuallaw libraryred
[25]
Id. at 50.chanrobles virtuallaw libraryred
[26]
Records at 389-397.chanrobles virtuallaw libraryred |