G.R. No. 200094 ; June 10, 2013
BENIGNO M. VIGILLA, et al., Petitioners, vs. PHILIPPINE COLLEGE OF CRIMINOLOGY INC. and/or GREGORY ALAN F. BAUTISTA, Respondents.

FACTS

Petitioners were janitors, janitresses, and a supervisor in the Maintenance Department of respondent Philippine College of Criminology Inc. (PCCr), working under the supervision of Atty. Florante A. Seril, PCCr’s Senior Vice President for Administration. However, they were made to understand they were employed by Metropolitan Building Maintenance Services, Inc. (MBMSI), a janitorial service provider of which Atty. Seril was also the President and General Manager. In 2008, PCCr discovered MBMSI’s Certificate of Incorporation had been revoked since 2003. Consequently, on March 16, 2009, PCCr, through its President Gregory Alan F. Bautista, terminated its relationship with MBMSI, resulting in the dismissal of the petitioners (except Alfonso Bongot who was retired). The petitioners filed complaints for illegal dismissal and monetary claims against MBMSI, Atty. Seril, PCCr, and Bautista, alleging PCCr was their real employer. PCCr contended it was not their direct employer, pointing to a contractual agreement with MBMSI. During proceedings, PCCr submitted notarized releases, waivers, and quitclaims executed by the petitioners in favor of MBMSI. The Labor Arbiter ruled PCCr was the real principal employer, MBMSI was a labor-only contractor, and the dismissals were in bad faith, ordering reinstatement, back wages, and damages. The NLRC affirmed the finding of labor-only contracting and solidary liability but held the petitioners’ claims were extinguished by the releases, waivers, and quitclaims they executed in favor of MBMSI, applying the principle of solidary obligation. The Court of Appeals affirmed the NLRC’s decision.

ISSUE

Whether the releases, waivers, and quitclaims executed by the petitioners in favor of MBMSI extinguish the solidary liability of PCCr for the petitioners’ illegal dismissal and monetary claims.

RULING

Yes. The Supreme Court affirmed the decisions of the NLRC and the Court of Appeals. The Court held that MBMSI was a labor-only contractor, making PCCr the principal and direct employer of the petitioners under Article 106 of the Labor Code. Consequently, PCCr and MBMSI (including its officer Atty. Seril) were solidarily liable for the petitioners’ valid claims pursuant to Article 109 of the Labor Code. The releases, waivers, and quitclaims executed by the petitioners in favor of MBMSI, one of the solidary debtors, extinguished the entire obligation under Article 1217 of the Civil Code, which states that “payment made by one of the solidary debtors extinguishes the obligation.” This release in favor of MBMSI redounded to the benefit of PCCr. The Court found the documents were notarized and petitioners failed to present clear and convincing evidence to overcome the presumption of regularity and substantiate their claim of forgery. Furthermore, the Court ruled that the quitclaims were valid as there was no showing they were executed by petitioners due to deceit or fraud, and the amounts received constituted reasonable settlement considering the circumstances.