G.R. No. 124643 September 29, 1998
NAZARIO M. PONCE, FERMIN ZACATE, JESUS B. RICO, ANICETO B. ESTO and JOHN GERMAN B. LIMBAGO, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, P & R PARTS MACHINERIES CORPORATION, FERNANDO RAMILLANO AND/OR BRGT AGENCY, ALSO KNOWN AS RIZ-MAN COMPANY, INC., respondents.

FACTS

Petitioners Nazario M. Ponce, Fermin Zacate, Jesus B. Rico, Aniceto B. Esto, and John German B. Limbago filed a case for illegal dismissal against P & R Parts and Machineries Corporation (“P & R”) and BRGT Agency. The Labor Arbiter ruled in favor of the petitioners, declaring the existence of an employer-employee relationship between them and P & R, and that their termination was illegal. The Arbiter ordered their reinstatement with full backwages and wage differentials, to be paid jointly and severally by P & R and BRGT Agency. The National Labor Relations Commission (NLRC) reversed the Labor Arbiter’s decision. The Supreme Court, in a decision dated July 30, 1998, annulled the NLRC decision and reinstated the Labor Arbiter’s judgment. Private respondent P & R filed a motion for reconsideration, arguing that the NLRC’s factual conclusions were supported by substantial evidence and that any error was merely an error of judgment, not grave abuse of discretion. P & R also invoked the doctrine of res judicata based on a related NLRC case involving a strike, and appealed for practical considerations due to the economic crisis.

ISSUE

Whether the motion for reconsideration filed by P & R, which argues that the NLRC did not commit grave abuse of discretion and that the doctrine of res judicata applies, should be granted.

RULING

The Supreme Court DENIED the motion for reconsideration with finality. The Court held that the NLRC committed grave abuse of discretion in discarding the Labor Arbiter’s findings. The Court affirmed its earlier ruling that BRGT Agency was engaged in labor-only contracting, as it was not licensed as an independent contractor, not properly bonded, and lacked substantial capital or investment. Petitioners worked under the control and supervision of P & R, performed work directly related to P & R’s business, and had been working for P & R since 1992, not merely under a five-month contract starting August 1993. The Court found that the related strike case did not constitute res judicata, as the illegal acts in that case did not cover the petitioners, and the NLRC itself had observed that the petitioners were not included in that strike case. The Court also held that the prevailing economic crisis could not justify a reversal of its decision.