G.R. No. 74193 -94 June 9, 1992
San Miguel Corporation, petitioner, vs. The National Labor Relations Commission, Labor Arbiter Pelagio, Lusito de Ocampo, et al., respondents.

FACTS

A complaint was filed by respondent Luisito de Ocampo and 133 co-employees against their employer, Reliable Contractor, and San Miguel Corporation for underpayment of wages and non-payment of their 13th month pay for 1980 to 1982. They alleged they were regular and permanent employees of Reliable Labor Contractor, which had a contract with San Miguel Corporation to perform loading, unloading, and repair work on a task or piece work basis until December 1982. During that period, they were not paid their 13th month pay and received only a daily wage of P17.00. San Miguel Corporation answered that under P.D. No. 851 and its implementing rules, it was not jointly and severally liable with the contractor for the 13th month pay of the contractor’s employees, and that it had regularly paid Reliable the contractor’s fees which included the basic wage, emergency allowance, and 13th month pay. Reliable alleged that since it hired the complainants on a task basis, it was exempted from the coverage of P.D. No. 851. The Labor Arbiter dismissed the complaint for underpayment of wages but directed San Miguel Corporation and Reliable to pay the 13th month pay for 1980 to 1982. Both parties appealed. The National Labor Relations Commission affirmed the Labor Arbiter’s decision.

ISSUE

Whether or not San Miguel Corporation may be held jointly and severally liable with the labor contractor for the payment of the workers’ 13th month pay.

RULING

Yes. The Supreme Court held that San Miguel Corporation is solidarily liable with Reliable for the employees’ 13th month pay. The NLRC correctly applied Articles 106, 107, and 109 of the Labor Code. Article 106 provides for the joint and several liability of an employer with a contractor or subcontractor for the wages of the latter’s employees. Article 107 extends this liability to an indirect employer. Article 109 states that every employer or indirect employer shall be held responsible with the contractor for any violation of the Labor Code. The petitioner, as an indirect employer of the employees of the labor-only contractor, is solidarily liable for the non-payment of the 13th month pay, which constitutes a violation of the Code. The petition for certiorari was dismissed.