Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 167334 March 7, 2008
CATO!IC VICARIATE, "AGUIO CIT#, petitioner,
vs.
ON. PATRICIA A. STO. TOMAS, S$cr$%ar& o' %h$ D$(ar%)$*% o' !a+or , E)(-o&)$*%,
a*. GEORGE AG"UCA#, respondents.
D E C I S I O N
TINGA, J./
For consideration is a Petition for Review
1
filed by petitioner Catholic Vicariate of Baguio City,
seeing the annul!ent of the "ecision
#
and Resolution
$
issued by the Court of %ppeals in C%&
'.R. (P )o. *$+1*.
First, the antecedents.
Petitioner contracted ,unwha -u.on Construction /,0)12%3 to construct the retaining wall of
the Baguio Cathedral. ,0)12%, in turn, subcontracted C4R4B% Builders /C4R4B%3 to do
the for!wors of the church. 5he contract between ,0)12% and C4R4B% lasted up to the
co!pletion of the pro6ect or on * (epte!ber #777.
8
,0)12% failed to pay C4R4B%.
Conse9uently, the latter failed to pay its e!ployees.
:n #; %ugust #777, respondent 'eorge %gbucay, along with *1 other e!ployees, lodged a
co!plaint against C4R4B%, ,0)12% and petitioner before the ":-4&C%R Regional :ffice
for nonpay!ent of wages, special and legal holiday pre!iu! pay. %n inspection of the pre!ises
resulted in the discovery of violations of labor standards law, such as nonpay!ent of wages and
holiday pay fro! #* <une #777 to + (epte!ber #777, non&presentation of e!ploy!ent records,
and others.
+
Petitioner, ,0)12% and C4R4B% were given five /+3 days fro! receipt of the
notice of inspection results to rectify its violations. "espite the notice, the parties failed to
co!ply. % hearing was set wherein C4R4B% !anifested its willingness to pay the affected
e!ployees on the condition that ,0)12% would pay its obligation to C4R4B%. Petitioner
!eanwhile !anifested that the retention fee due to ,0)12% was sufficient to pay the
deficiencies due the affected e!ployees.
:n 1# March #771, the ":-4&C%R Regional "irector issued an :rder
=
holding C4R4B%,
,0)12% and petitioner 6ointly and severally liable to the *# affected worers in the a!ount of
P1,7#;,;+#.*7 or P1#,+=7.87 for each e!ployee.
>
"uring the pendency of its !otion for
reconsideration, ,0)12% voluntarily settled the deficiencies due the #$ affected worers
a!ounting to P*8,+88.77 as follows?
1. 4dwin Balaoro P=,777.77
#. <ay %raneta #,88*.77
$. Renato Beado $,1#*.77
8. 4dgar Corte. $,1#*.77
+. Cesar Cuenta $,1#*.77
=. Redentor 4spiritu $,1#*.77
>. %belardo 'alve. $,1#*.77
*. @reneo 'alve. 8,$+#.77
;. <ose 'alve. $,1#*.77
17. Roland 'alve. #,88*.77
11. Ro!!el 'alve. $,1#*.77
1#. Ma!erto )adela $,1#*.77
1$. -ito )a.areno $,1#*.77
18. :rbel )erida #,88*.77
1+. Roy Padilla $,1#*.77
1=. Roy <ohn Padilla #,88*.77
1>. Randy (ibayan #,88*.77
1*. Ray!und (ibayan #,88*.77
1;. Reynald (ibayan #,88*.77
#7. Ronnie Villarino $,1#*.77
#1. Fernan Villarino #,88*.77
##. FeliA Padilla 1>,777.77
#$. 1illia! Pitlongay $,#77.77
*
:n #1 May #771, the Regional "irector dis!issed the co!plaint by reason of the said
settle!ent. 2e also advised the other e!ployees to ventilate their clai!s in an appropriate foru!
considering that no e!ployer&e!ployee relationship eAists between the parties.
;
:n appeal, the (ecretary of -abor reversed the ruling of the Regional "irector and held that
pursuant to %rticles 17= and 17> of the -abor Code, the liability of ,0)12%, C4R4B% and
the Catholic Vicariate is solidary notwithstanding the absence of an e!ployer&e!ployee
relationship. 5he (ecretary of -abor ruled, however, that there eAisted an e!ployer&e!ployee
relationship between the parties since the records show that the subcontracting agree!ent was
ter!inated only on #* (epte!ber #777, al!ost a !onth after the co!plaint was filed on #;
%ugust #777. 5he settle!ent with respect to the #$ worers was declared unconscionable and the
:rder of the Regional "irector dated 1# March #771 was reinstated. 5he dispositive portion of
the :rder
17
dated #$ <une #77$ reads?
0ERE1ORE, pre!ises considered, the Motion to (et %side <udg!entB:rder, herein
treated as an %ppeal, filed by appellant 'eorge %gbucay is hereby GRANTED. 5he
:rder dated May #1, #771 of the Regional "irector is SET ASIDE and VACATED. 5he
:rder dated March #1, #771 is REINSTATED with MODI1ICATION, and C4R4B%
B0@-"4R(, ,0)12% -0C:) C:)(5R0C5@:) and the C%52:-@C V@C%R@%54
are hereby ordered to pay 6ointly and severally, the eighty&two /*#3 affected worers the
a!ount of :)4 M@--@:) 514)5D&)@)4 52:0(%)" )@)4 20)"R4" F@F5D&
51: E *7B177 /P1,7#;,;+#.*73 Pesos. %ny legiti!ate pay!ents earlier !ade by
respondents to the twenty&three /#$3 co!plainants !ay be deducted fro! their individual
clai!s only upon proof of actual receipt. -et the entire records of this case be re!anded
to the Regional :ffice a 9uo for proper eAecution.
11
Petitioner !oved for Reconsideration
1#
but it was denied on 1; <anuary #778.
1$
:n #* (epte!ber #778, the Court of %ppeals affir!ed the order of the (ecretary of -abor with
the !odification that pay!ents !ade in favor of the #$ worers a!ounting to P*8,+88.77 be
deducted fro! whatever a!ount still due each of the!.
18
:n appeal, petitioner raised three issues, na!ely? /13 whether the (ecretary of -abor ac9uired
6urisdiction over the appeal considering that this case falls within the eAception stated in %rticle
1#*/b3 of the -abor CodeF /#3 whether the 9uitclai!s signed by affected e!ployees are validF
and /$3 whether the appeal interposed by petitioner inures to the benefit of the other affected
e!ployees.
1+
5he appellate court held that petitioner was estopped fro! 9uestioning the 6urisdiction of the
(ecretary of -abor, it having attended the initial hearing and therein !anifested that it had in its
possession the retention fee of ,0)12% sufficient to answer for the deficiencies due the
affected worers. 5he appellate court noted that it was only when the 6udg!ent i!posed 6oint
and several liability that petitioner began to 9uestion the 6urisdiction of the (ecretary of -abor.
5he appellate court further sustained the finding of the (ecretary of -abor that the settle!ent is
not legally acceptable as it defied public policy for being unconscionable. Moreover, the
appellate court succinctly stated that parties who did not appeal !ay be benefited by the
6udg!ent of said court insofar as it is favorable and applicable to the!.
1=
5here is no cogent reason to disturb the assailed 6udg!ent.
Petitioner contends that the 9uestion of 6urisdiction !ay be raised at any ti!e and even on
appeal. @t alleges that its participation in the hearing before the Regional "irector could not
a!ount to estoppel because it did not have sufficient infor!ation at that ti!e as to the factual
basis of the presence or absence of 6urisdiction by the (ecretary of -abor or his authori.ed
representative.
1>
@n resolving this 6urisdictional issue, the (ecretary of -abor relied on the li!itations set forth in
%rticle 1#*/b3
1*
of the -abor Code and ruled, thus?
@t is worthy to note that as regards the power granted to Regional "irector by %rticle 1#*
of the -abor Code, as a!ended, only two /#3 li!itations are set forth? first, where the
e!ployer contests the findings of the labor regulations officer, and raises issues which
cannot be resolved without considering evidentiary !atters that are not verifiable in the
nor!al course of inspection, and second, where the e!ployer&e!ployee relationship no
longer eAists.
A A A
Both of the above&stated li!itations are wanting in this case. Records show that, when
this case was filed on %ugust #;, #777, co!plainants were still e!ployed with the
respondent C4R4B% woring for ,0)12%Gs pro6ect with the Vicariate. 5here was no
proof that the subcontracting agree!ent between ,0)12% -0C:) C:)(5R0C5@:)
and C4R4B% Builders was ter!inated as of <uly #777. 5he letters showing the poor
perfor!ance of C4R4B% Builders cannot be considered as a notice of ter!ination of the
(ubcontracting %gree!ent for the sa!e do not state so.
A A A
(uccinctly put, since no written notice was served to respondent C4R4B% Builders
ter!inating the (ubcontracting %gree!ent, the e!ployer&e!ployee relationship between
,0)12% and co!plainants eAisted until the co!pletion of the subcontracting
agree!ent on (epte!ber 1*, #777. Considering this, when the co!plainants filed this
case on %ugust #;, #777, the Regional "irector validly ac9uired 6urisdiction over the
case. %nd, 6urisdiction once ac9uired is not lost upon the instance of the parties but
continues until the case is ter!inated.
A A A
@t is also e9ually i!portant to note that, during the initial hearing of this case at the
Regional :ffice, the respondents failed to contest the findings of the -abor 4!ploy!ent
and 4nforce!ent :fficer. 5he respondents failed to present e!ploy!ent records and any
evidence to controvert the findings despite the reasonable period of ti!e afforded the!. @t
was only when respondent ,0)12% filed its Motion for Reconsideration fro! the
:rder dated March 1#, #771 of the Regional "irector that it sub!itted docu!ents which
the Vicariate now alleged to be not verifiable in the su!!ary nature of the labor
inspection
1;
Moreover, the issue of 6urisdiction is clearly intertwined with the eAistence of e!ployer&
e!ployee relationship. @t is undisputed that the eAistence of an e!ployer&e!ployee relationship
is ulti!ately a 9uestion of fact.
#7
5hus, it can be inferred that this petition also sees a review of
the factual findings of the Regional "irector, as affir!ed by the (ecretary of -abor and the Court
of %ppeals. (uch review is beyond the a!bit of a petition for review on certiorari.
%ssu!ing arguendo the absence of an e!ployer&e!ployee relationship between the parties, the
(ecretary of -abor, invoing Odin Security Agency v. De la Serna,
#1
correctly declared that
petitioner is now estopped fro! 9uestioning the 6urisdiction of the Regional "irector when it
actively participated in the proceedings held therein. @n said case, petitioner also sub!itted to the
6urisdiction of the Regional "irector by taing part in the hearings before hi! and by sub!itting
a position paper. (i!ilarly, it was only when the order of the Regional "irector was !odified did
petitioner 9uestion the for!erGs 6urisdiction to hear and decide the case. 5his Court declares that
petitioner is barred by estoppel fro! raising the issue of 6urisdiction.
##
%nent the issue on the validity of the 9uitclai!s signed by ## out of the #$ affected e!ployees,
petitioner avers that they were signed voluntarily and eAecuted under the supervision of the
Regional "irector.
)ot all 9uitclai!s are per se invalid or against public policy. % 9uitclai! is said to be invalid and
against public policy /13 where there is clear proof that the waiver was wangled fro! an
unsuspecting or gullible person, or /#3 where the ter!s of settle!ent are unconscionable on their
face. @n such cases, the law will step in to annul the 9uestionable transaction.
#$
5he second
eAception obtains in the case at bar. %s succinctly put by the (ecretary of -abor?
%s to the clai! that this :ffice failed to show why the Huitclai!s and Releases were
unconscionable, despite the fact that it was eAecuted before the ":-4&C%R Regional
:ffice, the sa!e is totally !isplaced. Clear fro! the record is that, eAcept for the
9uitclai! signed by co!plainant FeliA Padilla, the !onetary considerations indicated in
the ## Huitclai!s and Releases were way below the total clai!s of each co!plainants.
5he presence and assistance of the representatives of the ":-4&C%R Regional :ffice in
the eAecution and consu!!ation of the sa!e is of no !o!ent. 5his :ffice, pursuant to
its ad!inistrative supervision and control over the Regional :ffices and the power to
review actions and decisions of her subordinates, can eAercise corrective !easures, where
the circu!stances warrant and to prevent in6ustice.
#8
@ndeed, as ordered by the Regional "irector, the #$ affected worers are entitled to receive
P1#,+=7.87 each or a total of P#**,**;.#7 for unpaid wages and special and regular holiday
pre!iu! pay.
#+
,0)12% however paid the! only P*8,+88.77,
#=
less than half of what they are
entitled to as co!puted by the Regional "irector. 5herefore, this Court is not inclined to sustain
the validity of the 9uitclai!s although apparently they were signed voluntarily and in the
presence of the Regional "irector.
Finally, petitioner asserts that the (ecretary of -abor erred in granting affir!ative relief to those
who did not appeal.
#>
:n the contrary, however, the Court of %ppeals properly affir!ed the
!onetary award of the (ecretary of -abor to the other affected e!ployees. 1hile as a general
rule, a party who has not appealed is not entitled to affir!ative relief other than the ones granted
in the decision of the court below, the Court of %ppeals is i!bued with sufficient authority and
discretion to review !atters not otherwise assigned as errors on appeal, if it finds that their
consideration is necessary in arriving at a co!plete and 6ust resolution of the case or to serve the
interests of 6ustice or to avoid dispensing piece!eal 6ustice.
#*
5he doctrine in Maternity
Childrens Hospital v. Secretary of Labor
#;
is instructive. @n said case, the award is eAtended to
all e!ployees of the establish!ent concerned, including those who did not sign the co!plaint.
5his Court eAplained, thus?
5he 6ustification for the award to this group of e!ployees who were not signatories to the
co!plaint is that the visitorial and enforce!ent powers given to the (ecretary of -abor is
relevant to, and eAercisable over establish!ents, not over the individual
!e!bersBe!ployees, because what is sought to be achieved by its eAercise is the
observance of, andBor co!pliance by, such fir!Bestablish!ent with the labor standards
regulations. )ecessarily, in case of an award resulting fro! a violation of labor
legislation by such establish!ent, the entire !e!bersBe!ployees should benefit
therefro!.
$7
0ERE1ORE, finding no reversible error in the 9uestioned "ecision of the Court of %ppeals,
the instant petition for review is DENIED.
SO ORDERED.
Carpio, Acting Chairperson CarpioMorales, A!cuna
I
, "elasco, #r., ##., concur.
1oo%*o%$2
I
%s replace!ent of <ustice -eonardo %. Huisu!bing who is on official leave per
%d!inistrative Circular )o. *8&#77>.
1
Rollo, pp. 11&$+.
#
@d. at $*&8*. Penned by %ssociate <ustice 4ugenio (. -abitoria, and concurred in by
%ssociate <ustices Rebecca "e 'uia&(alvador and Rosalinda %suncion&Vicente.
$
@d. at +7&+1.
8
@d. at $;. 5he Court of %ppeals decision dated #* (epte!ber #778 and the :rder of the
(ecretary of -abor dated #$ <une #77$ both indicated that the subcontracting agree!ent
lasted until * (epte!ber #777. :n the other hand, in the :rder dated 1; <anuary #778, the
co!pletion of the subcontracting agree!ent was on 1* (epte!ber #777, as !anifested by
C4R4B%.
+
@d. at +$.
=
@d. at +$&+;.
>
@d. at +;.
*
@d. at *8.
;
@d. at *+.
17
@d. at ;#&;*.
11
@d. at ;*.
1#
":-4 records, pp. 1*1&1;#.
1$
C% rollo, pp. $*&88.
18
Rollo, p. 8>.
1+
C% rollo, p. 11.
1=
Rollo, pp. 8=&8>.
1>
@d. at ##.
1*
%rt. 1#*. Visitorial and enforce!ent power
/b3 )otwithstanding the provisions of %rticles 1#; and #1> of this Code to the contrary,
and in cases where the relationship of e!ployer&e!ployee still eAists, the (ecretary of
-abor and 4!ploy!ent or his duly authori.ed representatives shall have the power to
issue co!pliance orders to give effect to the labor standards provisions of this Code and
other labor legislation based on the findings of labor e!ploy!ent and enforce!ent
officers or industrial safety engineers !ade in the course of inspection. 5he (ecretary or
his duly authori.ed representatives shall issue writs of eAecution to the appropriate
authority for the enforce!ent of their orders, eAcept in cases where the e!ployer contests
the findings of the labor e!ploy!ent and enforce!ent officer and raises issues supported
by docu!entary proofs which were not considered in the course of inspection.
1;
Rollo, pp. 17#&178.
#7
Manila 1ater Co., @nc. v. Pena, 8>* Phil. =*, >> /#7783F (on.a v. %B(&CB)
Broadcasting Corporation, '.R. )o. 1$*7+1, 17 <une #778, 8$1 (CR% +*$, +;8F
Fleischer Co!pany, @nc. v. )-RC, 87> Phil. $;1, $;; /#7713.
#1
'.R. )o. *>8$;, #1 February 1;;7, 1*# (CR% 8>#.
##
@d. at 8>;.
#$
(aroca! v. @nterorient Mariti!e 4nt. @nc., '.R. )o. 1=>*1$, #> <une #77=, 8;$ (CR%
+7#, +1+, citing Peri9uet v. )-RC, '.R. )o. ;1#;*, ## <une 1;;7, 1*= (CR% >#8F
Maricalu! Mining Corporation v. Brion, '.R. )os. 1+>=;=&;>, ; February #77=, 8*#
(CR% *>, 178.
#8
Rollo, p. 17+.
#+
@d. at +>.
#=
(upra note +.
#>
Rollo, p. $#.
#*
(t. MichaelGs @nstitute v. (antos, 8## Phil. >#$, >$+ /#7713.
#;
'.R. )o. >*;7;, $7 <une 1;*;, 1>8 (CR% =$#.
$7
@d. at =8;&=+7.
5he -awphil Pro6ect & %rellano -aw Foundation