G.R. Nos. 100376-77 June 17, 1994
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, GODOFREDO MORILLO, JR., SUNDAY BACEA, ALFREDO COS and ROGELIO VILLANUEVA, respondents.

FACTS

Private respondents Godofredo Morillo, Jr., Sunday Bacea, Alfredo Cos, and Rogelio Villanueva were security guards hired by Confidential Investigation and Security Corporation (CISCOR). They were assigned to secure the premises of CISCOR’s client, petitioner Development Bank of the Philippines (DBP), which in turn assigned them to guard the Riverside Mills Corporation. In August 1987, the private respondents resigned from CISCOR. They filed separate cases against CISCOR and its President/Manager Ernesto Medina before the NLRC for recovery of their cash bond, 13th month pay, and service incentive leave pay. The cases were consolidated. CISCOR filed a motion to implead DBP as a party-respondent, alleging joint and several liability under the Labor Code. The Labor Arbiter granted the motion and, in a decision, ordered CISCOR, Ernesto Medina, and DBP to pay the complainants’ salary differentials and to return their cash bonds. On appeal, the NLRC modified the decision, holding DBP, CISCOR, and Medina jointly and severally liable for the admitted claims for 13th month pay, service incentive leave pay, and refund of cash bond. The NLRC remanded the claims for wage differential, rest day, and legal holiday pay for further hearing. DBP filed this petition.

ISSUE

The decisive issue is whether petitioner DBP was correctly held jointly and severally liable with CISCOR and Medina for the payment of the private respondents’ monetary claims.

RULING

Yes. The Supreme Court affirmed the NLRC resolution with modification. The Court held that in job contracting, the principal (DBP) is jointly and severally liable with the contractor (CISCOR) for the wages and other statutory benefits of the contractor’s employees. This liability is mandated by Articles 106, 107, and 109 of the Labor Code to assure compliance with labor standards and to give workers ample protection. The joint and several liability of the principal does not require a prior finding of insolvency or unwillingness to pay on the part of the contractor. The principal becomes the indirect employer of the contractor’s employees for the purpose of paying their wages should the contractor be unable to pay. The Court also held that DBP was properly impleaded through a third-party complaint. The modification ordered by the Court was that the additional hearing shall be confined to legal holiday and rest day pay, excluding wage differentials. Execution was ordered to proceed for the awards of 13th month pay, service incentive leave pay, and return of cash bond. Petitioner DBP and CISCOR/Medina are ordered to pay jointly and severally, without prejudice to their right of reimbursement against each other.