Mariveles Shipyard V CA G.R. No.

144134; November 11, 2003; 415

SCRA 573

Facts:
Sometime on October 1993, Mariveles Shipyard Corporation engaged the
services of Longest Force Investigation and Security Agency, Inc. to render
security services at its premises. Pursuant to their agreement, Longest
Force deployed its security guards, the private respondents herein, at the
petitioner’s shipyard in Mariveles, Bataan.

According to petitioner, it religiously complied with the terms of the security

contract with Longest Force, promptly paying its bills and the contract rates
of the latter. However, it found the services being rendered by the assigned
guards unsatisfactory and inadequate, causing it to terminate its contract
with Longest Force on April 1995. Longest Force, in turn, terminated the
employment of the security guards it had deployed at petitioner’s shipyard.

On September 1996, private respondents filed a case for illegal dismissal,

underpayment of wages pursuant to the PNPSOSIA-PADPAO rates, non-
payment of overtime pay, premium pay for holiday and rest day, service
incentive leave pay, 13th month pay and attorney’s fees, against both
Longest Force and petitioner, before the Labor Arbiter. The case sought the
guards’ reinstatement with full back wages and without loss of seniority
rights.

Longest Force admitted that it employed private respondents and assigned

them as security guards at the premises of petitioner rendering a 12 hours
duty per shift for the said period. It likewise admitted its liability as to the
non-payment of the alleged wage differential in the total amount of
P2,618,025 but passed on the liability to petitioner

The petitioner denied any liability on account of the alleged illegal

dismissal, stressing that no employer-employee relationship existed
between it and the security guards. It further pointed out that it would be the
height of injustice to make it liable again for monetary claims which it had
already paid. Anent the cross-claim filed by Longest Force against it,
petitioner prayed that it be dismissed for lack of merit. Petitioner averred
that Longest Force had benefited from the contract; it was now estopped
from questioning said agreement on the ground that it had made a bad
deal.

The Labor Arbiter rendered judgment that Longest Force and Mariveles
Shipping be jointly and severally liable to pay the money claims of the
complainants. Petitioner appealed the foregoing to the NLRC. The labor
tribunal, affirmed the decision of the Labor Arbiter. Petitioner moved for
reconsideration, but this was denied by the NLRC.
The petitioner then filed a special civil action for certiorari assailing the
NLRC judgment for having been rendered with grave abuse of discretion

1
with the Court of Appeals. The Court of Appeals denied due course to the
petition and dismissed it outright.

Issue:
WON Longest Force should be held solely and ultimately liable.

Held:

Petitioner’s liability is joint and several with that of Longest Force, pursuant
to Articles 106, 107 and 109 of the Labor Code which provide as follows:

ART. 106. CONTRACTOR OR SUBCONTRACTOR. — Whenever an

employer enters into a 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.

In the event that the contractor or subcontractor fails to pay the wages 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.

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.

ART. 109. SOLIDARY LIABILITY . — 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.

In this case, when petitioner contracted for security services with Longest
Force as the security agency that hired private respondents to work as
guards for the shipyard corporation, petitioner became an indirect employer
of private respondents pursuant to Article 107 abovecited. Following Article
106, when the agency as contractor failed to pay the guards, the
corporation as principal becomes jointly and severally liable for the guards’
wages. This is mandated by the Labor Code to ensure compliance with its
provisions, including payment of statutory minimum wage.

The security agency is held liable by virtue of its status as direct employer,
while the corporation is deemed the indirect employer of the guards for the
purpose of paying their wages in the event of failure of the agency to pay
them. This statutory scheme gives the workers the ample protection
consonant with labor and social justice provisions of the 1987 Constitution.
Petitioner cannot evade its liability by claiming that it had religiously paid
2
the compensation of guards as stipulated under the contract with the
security agency. Labor standards are enacted by the legislature to alleviate
the plight of workers whose wages barely meet the spiraling costs of their
basic needs. Labor laws are considered written in every contract.
Stipulations in violation thereof are considered null. Similarly, legislated
wage increases are deemed amendments to the contract. Thus, employers
cannot hide behind their contracts in order to evade their (or their
contractors’ or subcontractors’) liability for noncompliance with the statutory
minimum wage.
However, the court emphasizes that the solidary liability of petitioner with
that of Longest Force does not preclude the application of the Civil Code
provision on the right of reimbursement from his co-debtor by the one who
paid. As held in Del Rosario & Sons Logging Enterprises, Inc. v. NLRC , the
joint and several liability imposed on petitioner is without prejudice to a
claim for reimbursement by petitioner against the security agency for such
amounts as petitioner may have to pay to complainants, the private
respondents herein. The security agency may not seek exculpation by
claiming that the principal’s payments to it were inadequate for the guards’
lawful compensation. As an employer, the security agency is charged with
knowledge of labor laws; and the adequacy of the compensation that it
demands for contractual services is its principal concern and not any
other’s.

Mariveles Shipyard Corp v. Court of Appeals

3
 G.R. No. 144134, Novemeber 11, 2003, 415 SCRA 513

FACTS: Petitioner submits that respondent Court of Appeals (CA) erred in

its decisions in the previous cases where the petitioner was involved. The
latter contend that, among other issues, CA gravely erred in its affirmation
on the National Labor Relations Commission‘s (NLRC) decision that the
petitioner together with ‘Longest Force’, a security agency, are jointly and
severally liable for the payment of back wages and overtime pay to private
respondents. The petitioner invokes that it has already paid all the
necessary compensation to the private respondents.

ISSUE: Whether or not the petitioner should be held jointly and severally
liable, together with ‘Longest Force’ in the payment of back wages to the
private respondents as affirmed by respondent CA?

HELD: Yes.

REASONING: Under Article 106, par. 2 of the Labor Code, ‘in the event
that the contractor or subcontractor fails to pay wages of his employees…
the employer shall be jointly and severally liable with his contractor or
subcontractor xxx’. Also, in Article 107 of the same Code, the law states
that ‘…the preceding Article shall likewise apply to person, partnership,
association or corporation which, not being an employer, contracts with an
independent contractor…’. Pursuant to the mentioned provisions of the
Labor Code, the Court said that, in this case, the petitioner as an indirect
employer, shall truly be liable jointly and severally with ‘Longest Force’ in
paying backwages and overtime pay to the private respondents. Moreover,
the Court emphasized that ‘Labor standard are enacted by the legislature
to alleviate the plight of workers whose wages barely meet the spiraling
costs of their basic needs. Labor laws are considered written in every
contract. Stipulations in violation thereof are considered null‘. Therefore,
the petitioner should be held jointly and severally liable, together with
‘Longest Force’ to the private respondents as earlier decided by NLRC, as
affirmed by the CA.

#LaborStandards #LaborLaw #CaseDigest

SECOND DIVISION

[G.R. No. 144134. November 11, 2003]

4
MARIVELES SHIPYARD CORP., petitioner, vs. HON. COURT OF
APPEALS, LUIS REGONDOLA, MANUELIT GATALAN, ORESCA AGAPITO,
NOEL ALBADBAD, ROGELIO PINTUAN, DANILO CRISOSTOMO, ROMULO
MACALINAO, NESTOR FERER, RICKY CUESTA, ROLLY ANDRADA,
LARRY ROGOLA, FRANCISCO LENOGON, AUGUSTO QUINTO, ARFE
BERAMO, BONIFACIO TRINIDAD, ALFREDO ASCARRAGA, ERNESTO
MAGNO, HONORARIO HORTECIO, NELBERT PINEDA, GLEN
ESTIPULAR, FRANCISCO COMPUESTO, ISABELITO CORTEZ,
MATURAN ROSAURO, SAMSON CANAS, FEBIEN ISIP, JESUS RIPARIP,
ALFREDO SIENES, ADOLAR ALBERT, HONESTO CABANILLAS,
AMPING CASTILLO and ELWIN REVILLA, respondents.

DECISION

QUISUMBING, J.:

For review on certiorari is the Resolution,1[1] dated December 29, 1999, of

the Court of Appeals in CA-G.R. SP No. 55416, which dismissed outright
the petition for certiorari of Mariveles Shipyard Corp., due to a defective
certificate of non-forum shopping and non-submission of the required
documents to accompany said petition. Mariveles Shipyard Corp., had filed
a special civil action for certiorari with the Court of Appeals to nullify the
resolution2[2] of the National Labor Relations Commission (NLRC), dated
April 22, 1999, in NLRC NCR Case No. 00-09-005440-96-A, which affirmed
the Labor Arbiters decision,3[3] dated May 22, 1998, holding petitioner
jointly and severally liable with Longest Force Investigation and Security
Agency, Inc., for the underpayment of wages and overtime pay due to the
private respondents. Likewise challenged in the instant petition is the
resolution4[4] of the Court of Appeals, dated July 12, 2000, denying
petitioners motion for reconsideration.

The facts, as culled from records, are as follows:

Sometime on October 1993, petitioner Mariveles Shipyard Corporation

engaged the services of Longest Force Investigation and Security Agency,
Inc. (hereinafter, Longest Force) to render security services at its premises.
Pursuant to their agreement, Longest Force deployed its security guards,
the private respondents herein, at the petitioners shipyard in Mariveles,
Bataan.

According to petitioner, it religiously complied with the terms of the security

contract with Longest Force, promptly paying its bills and the contract rates
of the latter. However, it found the services being rendered by the assigned

4
5
guards unsatisfactory and inadequate, causing it to terminate its contract
with Longest Force on April 1995.5[5] Longest Force, in turn, terminated the
employment of the security guards it had deployed at petitioners shipyard.

On September 2, 1996, private respondents filed a case for illegal

dismissal, underpayment of wages pursuant to the PNPSOSIA-PADPAO
rates, non-payment of overtime pay, premium pay for holiday and rest day,
service incentive leave pay, 13th month pay and attorneys fees, against
both Longest Force and petitioner, before the Labor Arbiter. Docketed as
NLRC NCR Case No. 00-09-005440-96-A, the case sought the guards
reinstatement with full backwages and without loss of seniority rights.

For its part, Longest Force filed a cross-claim6[6] against the petitioner.
Longest Force admitted that it employed private respondents and assigned
them as security guards at the premises of petitioner from October 16,
1993 to April 30, 1995, rendering a 12 hours duty per shift for the said
period. It likewise admitted its liability as to the non-payment of the alleged
wage differential in the total amount of P2,618,025 but passed on the
liability to petitioner alleging that the service fee paid by the latter to it was
way below the PNPSOSIA and PADPAO rate, thus, contrary to the
mandatory and prohibitive laws because the right to proper compensation
and benefits provided under the existing labor laws cannot be waived nor
compromised.

The petitioner denied any liability on account of the alleged illegal

dismissal, stressing that no employer-employee relationship existed
between it and the security guards. It further pointed out that it would be the
height of injustice to make it liable again for monetary claims which it had
already paid. Anent the cross-claim filed by Longest Force against it,
petitioner prayed that it be dismissed for lack of merit. Petitioner averred
that Longest Force had benefited from the contract, it was now estopped
from questioning said agreement on the ground that it had made a bad
deal.

On May 22, 1998, the Labor Arbiter decided NLRC NCR Case No. 00-09-
005440-96-A, to wit:

WHEREFORE, conformably with the foregoing, judgment is hereby

rendered ordering the respondents as follows:

1. DECLARING respondents Longest Force Investigation & Security

Agency, Inc. and Mariveles Shipyard Corporation jointly and severally liable
to pay the money claims of complainants representing underpayment of
wages and overtime pay in the total amount of P2,700,623.40 based on the
PADPAO rates of pay covering the period from October 16, 1993 up to April
29, 1995 broken down as follows:

6
6
UNDERPAYMENT OF WAGES:

PERIOD MONTHLY
COVERED PADPAO ACTUAL UNDERPAYMENT
RATES SALARY FOR THE Wage
(8 hrs. duty) RECEIVED PERIOD
DIFFERENTIALS
Oct. 16-Dec. P5,485.00 P5,000 P 485.00 P970.00
15/93 (2 mos.)
Dec. 16/93-Mar. 6,630.00 5,000 1,630.00
5,705.00
31/94 (3.5 mos.)
Apr. 1-Dec. 7,090.00 5,810 1,280.00
11,520.00
31/94 (9 mos.)
Jan. 1-Apr. 7,220.00 5,810 1,410.00
5,597.70
29/95 (3.97 mos.)
TOTAL UNDERPAYMENTS - - - - - - - - - - - - - - - - P23,792.70

OVERTIME:

Oct. 16-Dec. 15/93 P5,485 x 2 = P 5,485.00

(2 mos.) 2

Dec. 16/93-Mar. 6,630 x 3.5 = 11,602.50

31/94 (3.5 mos.) 2

Apr. 1-Dec. 7,090 x 9 = 31,905.00

31/94 (9 mos.) 2

Jan. 1-Apr. 7,220 x 3.97 = 14,331.70

29/95 (3.97 mos.) 2

TOTAL OVERTIME- - - - - - - - - P63,324.20

Sub-Total of Underpayments and Overtime P87,116.90

1. Luis Regondula (the same) P 87,116.90

2. Manolito Catalan (the same) 87,116.90
3. Oresca Agapito (the same) 87,116.90
4. Noel Alibadbad (the same) 87,116.90
5. Rogelio Pintuan (the same) 87,116.90
6. Danilo Crisostomo (the same) 87,116.90
7. Romulo Macalinao (the same) 87,116.90
8. Nestor Ferrer (the same) 87,116.90
9. Ricky Cuesta (the same) 87,116.90
10. Andrada Ricky (the same) 87,116.90
11. Larry Rogola (the same) 87,116.90
12. Francisco Lenogon(the same) 87,116.90
13. Augosto Quinto (the same) 87,116.90
14. Arfe Beramo (the same) 87,116.90
15. Bonifacio Trinidad (the same) 87,116.90
16. Alfredo Azcarraga (the same) 87,116.90
7
 17. Ernesto Magno (the same) 87,116.90
18. Honario Hortecio (the same) 87,116.90
19. Nelbert Pineda (the same) 87,116.90
20. Glen Estipular (the same) 87,116.90
21. Francisco Compuesto (the same) 87,116.90
22. Isabelito Cortes (the same) 87,116.90
23. Maturan Rosauro (the same) 87,116.90
24. Samson Canas (the same) 87,116.90
25. Febien Isip (the same) 87,116.90
26. Jesus Riparip (the same) 87,116.90
27. Alfredo Sienes (the same) 87,116.90
28. Adolar Albert (the same) 87,116.90
29. Cabanillas Honesto (the same) 87,116.90
30. Castillo Amping (the same) 87,116.90
31. Revilla Elwin (the same) 87,116.90

GRAND TOTAL P 2,700,623.90

2. DECLARING both respondents liable to pay complainants attorneys fees

equivalent to ten (10%) percent of the total award recovered or the sum of P270,062.34.

3. ORDERING respondent Longest Force Investigation & Security Agency, Inc. to

reinstate all the herein complainants to their former or equivalent positions without loss
of seniority rights and privileges with full backwages which as computed as of the date
of this decision are as follows:

Backwages:

10/16 12/15/93 =2 mos.

P 5,485.00 x 2 mos. = P 10,970.00

12/16/93 3/31/94=3.5 mos.

P 6,630.00 x 3.5 mos. = 23,205.00

4/1 12/31/94 = 9 mos.

P 7,090.00 x 9 mos. = 63,810.00

1/1 4/29/95 = 3.97 mos.

P 7,220.00 x 3.97 mos. = 28,663.40

TOTAL P 126,684.407[7]

1. Luis Regondula (same) P 126,684.408[8]

2. Manolito Catalan (same) 126,684.40
3. Oresca Agapito (same) 126,684.40
4. Noel Alibadbad (same) 126,684.40
5. Rogelio Pintuan (same) 126,684.40
6. Danilo Crisostomo (same) 126,684.40
7. Romulo Macalinao (same) 126,684.40
8. Nestor Ferrer (same) 126,684.40
9. Ricky Cuesta (same) 126,684.40
10. Andrada Rolly (same) 126,684.40
11. Larry Rogola (same) 126,684.40

8
8
 12. Francisco Lenogon(same) 126,684.40
13. Augosto Quinto (same) 126,684.40
14. Arfe Beramo (same) 126,684.40
15. Bonifacio Trinidad (same) 126,684.40
16. Alfredo Azcarraga (same) 126,684.40
17. Ernesto Magno (same) 126,684.40
18. Honario Hortecio (same) 126,684.40
19. Nelbert Pineda (same) 126,684.40
20. Glen Estipular (same) 126,684.40
21. Francisco Compuesto (same) 126,684.40
22. Isabelito Cortes (same) 126,684.40
23. Maturan Rosauro (same) 126,684.40
24. Samson Canas (same) 126,684.40
25. Febien Isip (same) 126,684.40
26. Jesus Riparip (same) 126,684.40
27. Alfredo Sienes (same) 126,684.40
28. Adolar Albert (same) 126,684.40
29. Cabanillas Honesto (same) 126,684.40
30. Castillo Amping (same) 126,684.40
31. Revilla Elwin (same) 126,684.40
GRAND TOTAL P3,927,216.409[9]

4. ORDERING said Longest Force Investigation & Security Agency, Inc.

to pay attorneys fees equivalent to ten (10%) percent of the total award
recovered representing backwages in the amount of P392,721.64.10[10]

5. DISMISSING all other claims for lack of legal basis.

SO ORDERED.11[11]

Petitioner appealed the foregoing to the NLRC in NLRC NCR Case No. 00-
09-005440-96-A. The labor tribunal, however, affirmed in toto the decision
of the Labor Arbiter. Petitioner moved for reconsideration, but this was
denied by the NLRC.

The petitioner then filed a special civil action for certiorari assailing the
NLRC judgment for having been rendered with grave abuse of discretion
with the Court of Appeals, docketed as CA-G.R. SP No. 55416. The Court
of Appeals, however, denied due course to the petition and dismissed it
outright for the following reasons:

1. The verification and certification on non-forum shopping is signed not

by duly authorized officer of petitioner corporation, but by counsel (Section
1, Rule 65, 1997 Rules of Civil Procedure).

10

11
9
2. The petition is unaccompanied by copies of relevant and pertinent
documents, particularly the motion for reconsideration filed before the
NLRC (Section 1, Rule 65, 1997 Rules of Civil Procedure). 12[12]

The petitioner then moved for reconsideration of the order of dismissal. The
appellate court denied the motion, pointing out that under prevailing case
law subsequent compliance with formal requirements for filing a petition as
prescribed by the Rules, does not ipso facto warrant a reconsideration. In
any event, it found no grave abuse of discretion on the part of the NLRC to
grant the writ of certiorari.

Hence, this present petition before us. Petitioner submits that THE COURT
OF APPEALS GRAVELY ERRED:

1. .IN DISMISSING THE PETITION AND DENYING THE MOTION FOR

RECONSIDERATION DESPITE THE FACT THAT PETITIONER
SUBSTANTIALLY COMPLIED WITH THE REQUIREMENTS OF SECTION
1, RULE 65, 1997 RULES OF CIVIL PROCEDURE.

2. .IN RULING THAT PETITIONER WAS NOT DENIED DUE

PROCESS OF LAW.

3. .IN AFFIRMING THE DECISION OF THE NATIONAL LABOR

RELATIONS COMMISSION THAT LONGEST FORCE AND PETITIONER
ARE JOINTLY AND SEVERALLY LIABLE FOR PAYMENT OF WAGES
AND OVERTIME PAY DESPITE THE CLEAR SHOWING THAT
PETITIONER HAVE ALREADY PAID THE SECURITY SERVICES THAT
WAS RENDERED BY PRIVATE RESPONDENTS.

4. WHEN IT FAILED TO RULE THAT ONLY LONGEST FORCE

SHOULD BE SOLELY AND ULTIMATELY LIABLE IN THE INSTANT
CASE.13[13]

We find the issues for our resolution to be: (1) Was it error for the Court of
Appeals to sustain its order of dismissal of petitioners special civil action for
certiorari, notwithstanding subsequent compliance with the requirements
under the Rules of Court by the petitioner? (2) Did the appellate court err in
not holding that petitioner was denied due process of law by the NLRC?
and (3) Did the appellate court grievously err in finding petitioner jointly and
severally liable with Longest Force for the payment of wage differentials
and overtime pay owing to the private respondents?

On the first issue, the Court of Appeals in dismissing CA-G.R. SP No.

55416 observed that: (1) the verification and certification of non-forum
shopping was not signed by any duly authorized officer of petitioner but
merely by petitioners counsel; and (2) the petition was not accompanied by
a copy of motion for reconsideration filed before the NLRC, thus violating
12

13
10
Section 1,14[14] Rule 65 of the Rules of Court. Hence, a dismissal was
proper under Section 3,15[15] Rule 46 of the Rules.

In assailing the appellate courts ruling, the petitioner appeals to our sense
of compassion and kind consideration. It submits that the certification
signed by its counsel and attached to its petition filed with the Court of
Appeals is substantial compliance with the requirement. Moreover,
petitioner calls our attention to the fact that when it filed its motion for
reconsideration before the Court of Appeals, a joint verification and
certification of non-forum shopping duly signed by its Personnel
Manager16[16] and a copy of the Motion for Reconsideration 17[17] filed
before the NLRC were attached therein. Thus, petitioner prays that we take
a liberal stance to promote the ends of justice.

Petitioners plea for liberality, however, cannot be granted by the Court for
reasons herein elucidated.

It is settled that the requirement in the Rules that the certification of non-
forum shopping should be executed and signed by the plaintiff or the
principal means that counsel cannot sign said certification unless clothed
with special authority to do so.18[18] The reason for this is that the plaintiff
or principal knows better than anyone else whether a petition has
previously been filed involving the same case or substantially the same
issues. Hence, a certification signed by counsel alone is defective and
constitutes a valid cause for dismissal of the petition. 19[19] In the case of
natural persons, the Rule requires the parties themselves to sign the
certificate of non-forum shopping. However, in the case of the corporations,
the physical act of signing may be performed, on behalf of the corporate
entity, only by specifically authorized individuals for the simple reason that
corporations, as artificial persons, cannot personally do the task
themselves.20[20] In this case, not only was the originally appended
certification signed by counsel, but in its motion for reconsideration, still
petitioner utterly failed to show that Ms. Rosanna Ignacio, its Personnel
Manager who signed the verification and certification of non-forum
shopping attached thereto, was duly authorized for this purpose. It cannot
be gainsaid that obedience to the requirements of procedural rule is
needed if we are to expect fair results therefrom. Utter disregard of the

14

15

16

17

18

19

20
11
rules cannot justly be rationalized by harking on the policy of liberal
construction.21[21]

Thus, on this point, no error could be validly attributed to respondent Court

of Appeals. It did not err in dismissing the petition for non-compliance with
the requirements governing the certification of non-forum shopping.

Anent the second issue, petitioner avers that there was denial of due
process of law when the Labor Arbiter failed to have the case tried on the
merits. Petitioner adds that the Arbiter did not observe the mandatory
language of the then Sec. 5(b) Rule V (now Section 11, per amendment in
Resolution No. 01-02, Series of 2002) of the NLRC New Rules of
Procedure which provided that:

If the Labor Arbiter finds no necessity of further hearing after the parties
have submitted their position papers and supporting documents, he shall
issue an Order to that effect and shall inform the parties, stating the
reasons therefor. 22[22]

Petitioners contention, in our view, lacks sufficient basis. Well settled is the
rule that the essence of due process is simply an opportunity to be heard,
or, as applied to administrative proceedings, an opportunity to explain ones
side or an opportunity to seek a reconsideration of the action or ruling
complained of.23[23] Not all cases require a trial-type hearing. The
requirement of due process in labor cases before a Labor Arbiter is
satisfied when the parties are given the opportunity to submit their position
papers to which they are supposed to attach all the supporting documents
or documentary evidence that would prove their respective claims, in the
event the Labor Arbiter determines that no formal hearing would be
conducted or that such hearing was not necessary. 24[24] In any event, as
found by the NLRC, petitioner was given ample opportunity to present its
side in several hearings conducted before the Labor Arbiter and in the
position papers and other supporting documents that it had submitted. We
find that such opportunity more than satisfies the requirement of due
process in labor cases.

On the third issue, petitioner argues that it should not be held jointly and
severally liable with Longest Force for underpayment of wages and
overtime pay because it had been religiously and promptly paying the bills
for the security services sent by Longest Force and that these are in
accordance with the statutory minimum wage. Also, petitioner contends that
it should not be held liable for overtime pay as private respondents failed to
present proof that overtime work was actually performed. Lastly, petitioner

21

22

23

24
12
claims that the Court of Appeals failed to render a decision that finally
disposed of the case because it did not specifically rule on the immediate
recourse of private respondents, that is, the matter of reimbursement
between petitioner and Longest Force in accordance with Eagle Security
Agency Inc. v. NLRC,25[25] and Philippine Fisheries Development Authority
v. NLRC.26[26]

Petitioners liability is joint and several with that of Longest Force, pursuant
to Articles 106, 107 and 109 of the Labor Code which provide as follows:

ART. 106. CONTRACTOR OR SUBCONTRACTOR Whenever an

employer enters into a contract with another person for the performance of
the formers work, the employees of the contractor and of the latters
subcontractor, if any, shall be paid in accordance with the provisions of this
Code.

In the event that the contractor or subcontractor fails to pay the wages 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.

xxx

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.

ART. 109. SOLIDARY LIABILITY. 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.

In this case, when petitioner contracted for security services with Longest
Force as the security agency that hired private respondents to work as
guards for the shipyard corporation, petitioner became an indirect employer
of private respondents pursuant to Article 107 abovecited. Following Article
106, when the agency as contractor failed to pay the guards, the
corporation as principal becomes jointly and severally liable for the guards
wages. This is mandated by the Labor Code to ensure compliance with its
provisions, including payment of statutory minimum wage. The security
agency is held liable by virtue of its status as direct employer, while the
corporation is deemed the indirect employer of the guards for the purpose
of paying their wages in the event of failure of the agency to pay them. This
25

26
13
statutory scheme gives the workers the ample protection consonant with
labor and social justice provisions of the 1987 Constitution. 27[27]

Petitioner cannot evade its liability by claiming that it had religiously paid
the compensation of guards as stipulated under the contract with the
security agency. Labor standards are enacted by the legislature to alleviate
the plight of workers whose wages barely meet the spiraling costs of their
basic needs. Labor laws are considered written in every contract.
Stipulations in violation thereof are considered null. Similarly, legislated
wage increases are deemed amendments to the contract. Thus, employers
cannot hide behind their contracts in order to evade their (or their
contractors or subcontractors) liability for noncompliance with the statutory
minimum wage.28[28]

However, we must emphasize that the solidary liability of petitioner with that
of Longest Force does not preclude the application of the Civil Code
provision on the right of reimbursement from his co-debtor by the one who
paid.29[29] As held in Del Rosario & Sons Logging Enterprises, Inc. v.
NLRC,30[30] the joint and several liability imposed on petitioner is without
prejudice to a claim for reimbursement by petitioner against the security
agency for such amounts as petitioner may have to pay to complainants,
the private respondents herein. The security agency may not seek
exculpation by claiming that the principals payments to it were inadequate
for the guards lawful compensation. As an employer, the security agency is
charged with knowledge of labor laws; and the adequacy of the
compensation that it demands for contractual services is its principal
concern and not any others.31[31]

On the issue of the propriety of the award of overtime pay despite the
alleged lack of proof thereof, suffice it to state that such involves a
determination and evaluation of facts which cannot be done in a petition for
review. Well established is the rule that in an appeal via certiorari, only
questions of law may be reviewed.32[32]

One final point. Upon review of the award of backwages and attorneys
fees, we discovered certain errors that happened in the addition of the
amount of individual backwages that resulted in the erroneous total amount
of backwages and attorneys fees. These errors ought to be properly
rectified now. Thus, the correct sum of individual backwages should be
P126,648.40 instead of P126,684.40, while the correct sum of total
27

28

29

30

31

32
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backwages awarded and attorneys fees should be P3,926,100.40 and
P392,610.04, instead of P3,927,216.40 and P392,721.64, respectively.

WHEREFORE, the Resolution of the Court of Appeals in CA-G.R. SP No.

55416 is AFFIRMED with MODIFICATION. Petitioner and Longest Force
are held liable jointly and severally for underpayment of wages and
overtime pay of the security guards, without prejudice to petitioners right of
reimbursement from Longest Force Investigation and Security Agency, Inc.
The amounts payable to complaining security guards, herein private
respondents, by way of total backwages and attorneys fees are hereby set
at P3,926,100.40 and P392,610.04, respectively. Costs against petitioner.

SO ORDERED.

Bellosillo, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

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