GR 178909; (October, 2012) (Digest)
G.R. No. 178909 ; October 10, 2012
Superior Packaging Corporation, Petitioner, vs. Arnel Balagsa Y, et al., Respondents.
FACTS
The petitioner, Superior Packaging Corporation, engaged the services of Lancer Staffing & Services Network, Inc. to provide reliever services for its corrugated box manufacturing business. Respondents were deployed by Lancer to perform tasks such as loading and unloading boxes from February to June 1998. The respondents filed a complaint with the Department of Labor and Employment (DOLE) for various monetary claims, including underpayment of wages and non-payment of overtime and holiday pay. Following an inspection and summary proceedings where the petitioner failed to appear, the DOLE Regional Director issued an Order finding violations and holding the petitioner and its President solidarily liable with Lancer for the respondents’ claims.
The petitioner appealed, arguing the respondents were employees of Lancer, not of the petitioner, and that it paid Lancer a lump sum for the services. The DOLE Secretary affirmed the finding of solidary liability. The Court of Appeals subsequently affirmed the DOLE’s orders but absolved the petitioner’s President of personal liability. The petitioner filed this Rule 45 petition, contesting the solidary liability and the finding of labor-only contracting.
ISSUE
Whether the petitioner may be held solidarily liable with Lancer for the respondents’ unpaid monetary claims.
RULING
Yes, the Supreme Court affirmed the solidary liability. The Court applied the rule on solidary liability of the principal under labor laws governing job contracting. The DOLE correctly found that Lancer was engaged in labor-only contracting, a prohibited arrangement. The law and pertinent DOLE regulations provide that in labor-only contracting, the principal is deemed the direct employer of the workers supplied by the contractor and is solidarily liable with the contractor for the workers’ monetary claims. The petitioner’s argument that it cannot be liable for the “double indemnity” penalty under Republic Act No. 6727 was rejected as it was raised for the first time on appeal and thus barred. The Court also upheld the factual findings of the DOLE, supported by evidence, that the respondents performed work necessary and desirable to the petitioner’s main business, further supporting the conclusion of labor-only contracting. Consequently, the petitioner is solidarily liable with Lancer for the awarded claims.