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FIRST DIVISION

ERNESTO C. LUCES, ANDRES G. G.R. No. 213816

GUINTO, LAMBERTO B.
SORIANO, NOLY T. TALARO, Present:
SERAFIN A. SABILLO JR., PERALTA, CJ,
EDUARDO C. CHICA, JOSEPH N. Chairperson,
OAQUIERA, ELESEO P. CAGUIOA,
P AROHINOG, HERNIE M. CARANDANG,
ESCOMEN, LITO REMOLANO, ZALAMEDA,
DANIEL VERGARA, ORLANDO C. GAERLAN, JJ.
VERGARA ALEJANDRO M.
GERONIO, ALMEN R. ABELLERA,
DENNIS A. SENCIO, JESUS R.
PENASO JR., ALBERT TALA-OC,
ANGELITO L. BARES, JERRY V.
DELLOSA, CHARLON R.
TADALAN, CHARLITO E.
ALIGATO, JESSIE C. MABUTE,
REY P. MOJADOS, MARLON Z.
BERNARDINO, ZALDY 0. SILLAR
WILLIAM NICDAO,
Petitioners,

- versus -

COCA-COLA BOTTLERS PIDLS.

INC., INTERSERVE
MANAGEMENT MANPOWER
RESOURCES, INCORPORATED, Promulgated:
AND HOTWIRED MARKETING
SYSTEMS INC.,
DEC 2 2020 o
Respondents.

x--------------------------------------------- -----x
Decision 2 G.R. No. 213816

DECISION

CARANDANG, J.:

Before this Court is a Petition for Review on Certiorari 1 under Rule 45

of the Rules of Court seeking to set aside the Decision2 dated September 26,
2013 and the Resolution3 dated May 5, 2014 of the Court of Appeals (CA) in
CA-G.R. SP No. 116615 affirming the Decision4 dated March 31, 2010 and
the Resolution5 dated August 12, 2010 of the National Labor Relations
Commission (NLRC). The NLRC affirmed the Decision6 dated September 22,
2008 of the Labor Arbiter (LA) dismissing the complaint of petitioners for
regularization and illegal dismissal against the private respondents Coca-Cola
/
Bottlers Philippines Inc. (CCBPI), Interserve Management Manpower
Resources Inc. (Interserve) and Hotwired Marketing Systems Inc. (Hotwired).

Facts of the Case

On December 11, 2007, the following petitioners filed a case for

regularization and claim for fringe benefits and other benefits from Collective
Bargaining Agreement (CBA) against respondents CCBPI, Interserve and
Hotwired, 7 to wit:

Name Position Agency

Ernesto C. Driver Interserve
Luces
WilliamF. Helper Interserve/Hotwired
Nicdao
AlmenR. Helper Interserve/Hotwired
Abellera
JerryV. Helper Interserve/Hotwired
Dellosa
Angelita L. Helper Hotwired
Barres
Albert Talaoc Helper Hotwired
Lamberto E/C Operator D&Y
Soriano Services/Hotwired
Jesus Bayani Helper Enter/Hotwired
Aldous Helper & Driver (blank)
Domingo
Allan Helper & Driver (blank)
Domingo

Rollo, pp. 8-18.

2 Penned by Edwin D. Sorongon, with the concurrence of Associate Justices Hakim S. Abdulwahid
and Marlene Gonzales-Sison; id. at 19-30.
Id. at31-32.
4 Penned by Commissioner Isabel G. Panganiban-Ortiguerra, with the concurrence of Presiding
Commissioner Benedicto R. Palaco1 and Commissioner Nieves Vivar-De Castro; id. at 62-72.
Id. at 74-77.
6 Penned by Executive Labor Arbiter Fatima Jambardo-Franco; id. 211-228.
7
Id. at 79-103.

1
Decision 3 G.R. No. 213816

Joseph Helper Interserve

Oaquiera
Renan Garcia Helper Interserve
Andres G. Helper & Driver CCBPl/lnterserve
Guinto
Noel Cordova Helper CCBPI/lnterserve
Eduardo Chica Helper & Driver CCBPl/lnterserve/Hot
wired
Mamerto San Route Helper Hotwired
Roman
RollyD. Driver Hotwired
Alabat
Roderick Driver Hotwired
Edmund
Dominador Driver Hotwired
Banogon
Zaldy Sillar Helper Interserve/Hotwired
Jessie C. Helper Hotwired
Mabute
Marlon Helper Hotwired
Bernardino
Serafin Sabilo Driver Genesis/Interserve/Hot
Jr. wired
Rio Coralde Heluer Interserve
Ricardo Helper Interserve
Coralde
Alejandro Forklift Operator Genesis
Geronio
Lito Remolano Driver Hotwired/lnterserve
Jay Martos Heluer Hotwired
Jesus Panaso Route Helper Hotwired/CCBPI
Jr.
Alvin Helper Hotwired
Labrador
ReyMoiados Helper Hotwired
Arthur Helper Hotwired
Balubar
Orlando Berto! Helper Hotwired
Arturo Aclao Forklift Operator (blank)
Dondon Leadman Interserve/Hotwired
Fabricante
Dennis Cencio Helper Interserve/Hotwired
Rhoderick Helper Interserve
Garcia
Charlito Driver Hotwired
Aligato
Garizaldy Messenger Interserve/Union
Calderon Services
Decision 5 G.R. No. 213816

Rojen S. Helper Hotwired

Cervana
AldwinM. Helper Hotwired
Depaz
Francis Helper Hotwired
Manlangit
Jonnie A. Helper Hotwired
Siervo
Orlando Helper Interserve
Vergara
CharlonR. Driver Interserve/Hotwired
Tadalan
NolyT. Checker
Talaro
Jayson C. Utility Hotwired
Soliman
Dennis Helper Interserve/Hotwired
Venus
Romnick Helper Hotwired
Rebellon
Rolando L. Leadman Hotwired
Baba
Thomas Helper Hotwired
1ohn Felarca
Jaime C. Helper Interserve/Hotwired
Malimata Jr.
Aurelio J. Helper Interserve/Hotwired
Olana
Ronie G. Dispatcher Genesis/Interserve/Hot
Villar wired
ChitoM. Helper Interserve/Hotwired
Mangonti
Alfredo Helper Hotwired
Laqui
Michael Helper Hotwired
Abad
Romeo Driver Genesis/Interserve/Hot
Berdera wired
Joey Sarte Helper Hotwired
Joenniefer Driver Hotwired 14
Sabilla

14 Sama-samang Pahayag ng Pagsapi at Autorisasyon na Ibinigay namin sa Abogado at Opisya/es ng

National Organization a/Workingmen (NO. W~; id. at 108-115.
Decision 4 G.R. No. 213816

I Mauro Helper Hotwired8

Paniamogan

In their original Complaint, 9 petitioners sought their regularization as

employees of CCBPI arguing that Interserve and Hotwired are labor-only
contractors. Petitioners averred that they have been continuously rendering
services to CCBPI despite having been re-employed by at least five different
contractors such as: Excellent Partners Cooperative, Genesis Inc., Holgado,
United Utility, Interserve and Hotwired. They alleged that the functions they
perform, particularly as route helpers, drivers, messengers, and forklift
operators, are directly related to the business of CCBPI, which is the
manufacture, sales and distribution of soft drinks. They likewise use the
delivery trucks owned by CCBPI and work within the premises the company
owns. They are also under the supervision of CCBPI' s authorized salesmen. 10

Further, they argued that their current employment as contractual

worker is contrary to labor laws and that they are being deprived of their
security of tenure and the benefits and emoluments entitled to a regular worker
of CCBPI. They contend that Interserve and Hotwired are labor-only
contractors being utilized by CCBPI in order to deny them of the rights
accorded by law to a regular employee. 11

On January 30, 2008, an additional 27 employees filed a Supplemental

Complaint12 joining the 40 employees in the original complaint and adopting
their statement of facts and arguments in support of their complaints, being in
the same situation and having co1mnon issues and claims. 13 The following are
the 27 employees:

Name Position Agency

Daniel Helper Interserve
Vergara
Hemie Forklift D& Y/Interserve
Escomen Operator/Mechanic
Elesco Helper Interserve/Hotwired
Parohinog
Dennis Helper Interserve
Maglaqui
Erick F. Helper Hotwired
Gozarin
Allan G. Helper Hotwired
Gonzales

Sama-samahang Pahayag ng Pahayag ng Pagsapi at Autorisasyon na Ibinigay Namin sa Abogado

9
10
at Opisyales ng National Organization of Workingmen (NO. WM); id at 92-103.
Id.
Id.
at 79-103.
at 8 I -84.
</
JI Id. at 84-85.
12 Id. at 104-115.
13 Id. at 104-105.
 Decision 6 G.R. No. 213816

On March 27, 2008, all 67 petitioners, through the National

Organization of Workingmen, filed a Second Supplemental Complaint15
invoking illegal dismissal against CCBPI, Interserve, and Hotwired. 16

Allegedly, Interserve and Hotwired informed them that CCBPI will

soon close the Almanza I Sales Outlet in Las Pinas City and that petitioners
should transfer to other outlets particularly in Sta. Rosa, Laguna. However,
before they could be transferred, petitioners needed to withdraw their
complaint against CCBPI first, to which petitioners did not agree. Thus, on
January 30, 2008, they were all banned from reporting to their duties forcing
them to file the Illegal Dismissal complaint. 17

The case was raffled to Executive Labor Arbiter Fatima J. Franco

docketed with case number NLRC NCR Case No. 12-13087-07. Having failed
to arrive at a compromise settlement, the LA directed the parties to file their
respective position papers. Petitioners adopted their Original Complaint and
Supplemental Complaints as their position paper, 18 while respondents CCBPI,
Interserve, and Hotwired separately submitted their own. 19

In its Position Paper/Motion to Dismiss,2° CCBPI rebutted the claims

of petitioners. Firstly, CCBPI contended that the LA has no jurisdiction over
the complaint because there is no employer-employee relationship between
CCBPI and petitioners. 21

CCBPI discussed the four-fold test in determining whether there exists

an employer-employee relationship between them and petitioners. For the
selection and hiring of the employees, CCBPI argued that it had no
participation or say therein and it was solely the discretion of Interserve and
Hotwired how the employees were screened, selected and hired. Each of the
employees executed employment contracts with Interserve or Hotwired and
not with CCBPI. For the payment of the wages, it was also Interserve and
Hotwired who regularly paid their employees. 22

For the discipline and termination of the employees, such power lies
with Interserve and Hotwired. The complaints of CCBPI against the work of
the employees were just coursed through the representatives ofinterserve and
Hotwired, who still decides on how to discipline them. 23

For the power of control, CCBPI submitted the Sworn Statements of

Howard. Clidera (Clidera), operations manager of Hotwired, and Carmelita
Bunagan (Bunagan), coordinator of Interserve. Clidera stated that he was

15
Id. at 116-118.
16 Id.
17 Id.at 117.
18
Id. at 202-203.
19
Id. at 119-169, 176-183, 204-208.
20
Id. at 119-169.
21
Id. at 120-121.
22
Id. at 138-144, 147-148.
23
Id. at 127, 133, 144-145, 148-149.
 Decision 7 G.R. No. 213816

responsible for assigning the forklift operators and helpers who would
discharge the products from the hauler trucks to the warehouse. He was also
in charge of assigning the helpers and drivers who would deliver the products
in designated areas for maximized use of facilities. He was also responsible
for monitoring the inventory of goods in the warehouse and for informing
CCBPI whenever there is shortage or surplus in the supply. 24 Likewise,
Bunagan stated that he was in charge of overseeing the work of the route
helpers. He would assign them to specific delivery trucks and would monitor
their attendance. 25

Hence, CCBPI held that since it does not exercise any of the powers
enumerated under the four-fold test, it is not considered as e1nployer of
petitioners. Further, it held that the true employers of petitioners are either
Interserve or Hotwired, the latter exercising control and supervision over the
manner and method of performing their duties. 26

Secondly, CCBPI averred that Interserve and Hotwired are legitimate

job contractors and not labor-only contractors. To support their claim, CCBPI
submitted documents to prove the substantial capitalization oflnterserve and
Hotwired, some of which are the following: (1) Affidavit of Mr. Howard
Clidera (the Operations Manager ofHotwired); (2) Affidavit of Mr. Carmelito
Bunagan (the Designated Coordinator of Interserve); (3) Warehousing
Management Agreement with Hotwired; (4) Delivery Agreement with
Hotwired; (5) Articles of Incorporation of Hotwired; ( 6) Balance Sheet and
Income Statement of Interserve; and (7) Service Agreements with
Interserve. 27

According to CCBPI, Hotwired possesses at least 15 delivery trucks

used for the warehousing and delivery services rendered to it. Hotwired has
an authorized capital stock amounting to Pl0,000,000.00, out of which
1'2,500,000.00 had been subscribed and paid up. 28 Meanwhile, Interserve has
capitalization amounting to 1'21,658,220.26. It has a total assets amounting to
1'27,509,716.32 with investment in properties, tools, and equipment worth
1'12,538,859.55. 29 Finding that Interserve and Hotwired exercised the power
of control over the employees and that both have substantial capital or
investment, they are considered legitimate job contractors. 30

Thirdly, CCBPI contended that the claims of some of the petitioners

have prescribed for having been filed beyond the 4-year prescriptive period.
CCBPI enumerated petitioners whose claims were filed beyond the period
allowed by law. 31

24
Id. at 128-130, 145-147.
25
Id. at 132-133, 149-150.
26
Id. at 127-135, 152-153, 157.
27
Id. at 127-136.
28
Id. at 125.
29
Id. at 131-132.
30
Id. at 125, 131.
31 Id. at 159-162.
 Decision 8 G.R. No. 213816

Lastly, CCBPI argued that the case of Magsalin & Coca-Cola Bottlers
Phils. Inc. v. National Organization of Working Men (Magsalin) 32 is not
applicable in this case because of different factual milieu. In the case of
Magsalin, the claimant-employees were directly hired by CCBPI as opposed
to petitioners who were hired by Interserve or Hotwired. Further, the
employees in the case of Magsalin were engaged on a day-to-day basis while
petitioners are engaged by Interserve or Hotwired on a contractual
arrangement.

Meanwhile, in the Position Paper oflnterserve,33 it claimed that it is a

legitimate job contractor whose continued operation in business is dependent
upon the contracts it is able to secure from principals, such as CCBPI. Thus,
it held that it can only offer a contractual employment to petitioners and that
petitioners were informed prior to signing their contracts that their
employment is for a limited duration only. It also argued that as employer of
petitioners, it provides them with training and practical lessons which they
utilize a1 work. Petitioners are under the direct control and supervision of
Interserve through its supervisors. Further, it did not dismiss petitioners but
some of them actually resigned while others had their contracts expired. 34

In the Position Paper3 5 ofHotwired, it contended that it did not dismiss

petitioners but the latter abandoned their work by not reporting at the Sta.
Rosa, Laguna plant. Some of the petitioners actually applied directly with
CCBPI and another job contractor, Aero Plus. It averred that petitioners are
using the illegal dismissal complaint as leverage to gain employment at
CCBPI which connotes gross bad faith and selfish intent on petitioner's part. 36

Ruling of the Labor Arbiter

On September 22, 2008, the LA rendered a Decision37 dismissing the

complaint against CCBPI for lack ofjurisdiction and dismissing the complaint
against Interserve and Hotwired for lack of merit, the dispositive portion of
which reads:

WHEREFORE, premises considered, the instant

complaint is hereby DISMISSED for lack of jurisdiction
insofar as respondent Coca-Cola Bottlers Philippines, Inc.
(CCBPI) is concerned, and for lack of merit insofar as
respondents Hotwired Marketing Systems Incorporated
and Interserve Management and Manpower Resources
Incorporated are concerned.

SO ORDERED. 38 (Emphasis in the original)

32
451 Phil. 254 (2003).
33
Rollo, pp. 176-183.
34
Id. at 180-183.
35
Id. at 204-208.
36
Id. at 206-208.
37
Supra note 6.
38
Rollo, p. 228.
 Decision 9 G.R. No. 213816

The LA gave credence to the arguments of CCBPI. It ruled that

petitioners failed to substantiate their claim that CCBPI exercised control and
supervision over them. Petitioners merely denied the statements of Clidera
and Bunagan whose affidavits detailed the supervision they do over the work
of petitioners. 39

Further, the LA found that the evidence submitted prove that both
Interserve and Hotwired are legitimate job contractors. It relied on the
Position Paper of CCBPI showing that Interserve and Hotwired have
substantial capitalization or investment, that they exercise power of control
over petitioners, and that they carry businesses independent, separate and
distinct from CCBPI. 40

It ruled that there is nothing in law or jurisprudence that necessitates

that a contractual employment be set in a fixed or pre-determined period.
Thus, even though the contractual arrangement of petitioners with Interserve
or Hotwired does not have a fixed or pre-determined period, the same is still
valid. The LA gave notice on the fact that Interserve or Hotwired relies on the
contract it secures from its principals, such as CCBPI. Thus, these job
contractors cannot assure definite employment to its workers. 41

Lastly, the LA ruled that Article 280 of the Labor Code is inapplicable
in the case at hand because, as established before, there is no employer-
employee relationship between CCBPI and petitioners. Thus, the necessary or
desirable test to determine whether petitioners are regular or casual employees
finds no application to petitioners. 42

Aggrieved, the 67 petitioners filed an appeal before the NLRC. 43

Ruling of the National Labor Relations Commission

On March 31, 2010, the NLRC issued a Decision44 affirming the

dismissal of the complaint, to wit:

WHEREFORE, premises considered, the instant

appeal is DISMISSED for lack of merit and the Decision
dated 22 September 2008 is hereby AFFIRMED.

SO ORDERED. 45 (Emphasis in the original)

39
Id. at 222-223.
40
Id. at 223-225.
41
Id. at 225-226.
42
Id. at 226-227.
43
Id. at 229-234.
44
Supra note 4.
45 Rollo, pp. 71-72.
 Decision 10 G.R. No. 213816

NLRC affirmed the findings of the LA that Interserve and Hotwired are
legitimate job contractors having shown that they have substantial
capitalization and that they perform business independent and different from
the business ofCCBPI. 46

Also, NLRC found that petitioners did not perform tasks that are
indispensable in carrying out the principal business of CCBPI. It ruled that
under the Warehouse Management Contract, petitioners were in charge of
stock handling and storage, loading and unloading of goods. Meanwhile,
CCBPI is engaged in the business of manufacturing, distributing and
marketing ofsoftdrinks. NLRC held that petitioners' tasks were not pivotal to
the main business ofCCBPI. 47

Lastly, NLRC ruled that CCBPI did not exercise the power of control
over the work of petitioners. The power of control was exercised by the
representatives of Interserve and Hotwired, Bunagan and Clidera,
respectively. CCBPI did not have a hand on the manner of delivery, loading,
and unloading of the products. Likewise, it did not have supervision over
petitioners. 48

Aggrieved, petitioners filed a Motion for Reconsideration (MR) of the

Decision of the NLRC. On August 12, 2010, the NLRC issued a Resolution49
denying the MR for lack ofmerit. 50

Undaunted, herein petitioners filed a Petition for Certiorari51 under

Rule 65 before the CA. The other 41 petitioners no longer filed a petition to
contest the decision of the NLRC.

Ruling of the Court of Appeals

On September 26, 2013, the CA issued a Decision52 denying the

petition for certiorari filed by petitioners and affirming the decision of the
NLRC, i:iz.:

WHEREFORE, there being no grave abuse of

discretion on the part of the NLRC in rendering the assailed
decision, the petition for certiorari is hereby DENIED. The
impugned decisions of both labor tribunals are AFFIRMED
IN TOTO.

SO ORDERED. 53 (Emphasis in the original)

46
4'

48
49
50
Id. at 69.
Id. at 69-70.
Id. at 70-71.
Supra note 5.
Rollo, p. 76.
1
51
Id. at 33-59.
52
Supra note 2.
53
Rollo, p. 30.
 Decision 11 G.R. No. 213816

The CA affirmed the NLRC and the LA in ruling that Hotwired and
Interserve are legitimate independent job contractors. It ruled that the NLRC
did not commit grave abuse of discretion in finding that Interserve and
Hotwired had substantial capitalization as evidenced in the Certification from
the Department of Labor and Employment (DOLE). Likewise, the
Certification gives the presumption that they are not labor-only contractors
which petitioners failed to dispute. 54

Further, the CA ruled that the extension of service contract between the
independent contractors and CCBPI is not a source of employer-employee
relationship with respect to CCBPI and petitioners. CA reiterated the findings
of NLRC and LA in establishing that there was no employer-employee
relationship between CCBPI and petitioners using the four-fold test. 55

On the issue of illegal dismissal, CA stated that it cannot pass upon the
issue raised for the first time on appeal and affi=ed the LA finding that
petitioners failed to raise the illegal dismissal complaint with respect to
Interserve and Hotwired. Assuming it can decide on such issue, CA agreed
with the LA that petitioners were not dismissed but actually, petitioners had
an expiration of contract by virtue of the expiration of the service contract
between the contractors and CCBPI. 56

Petitioners filed an MR on October 16, 2013, which was denied in a

Resolution57 dated May 5, 2014.

Hence, this Petition for Review on Certiorari under Rule 45 of the

Rules of Court.·

In its Petition dated October 2, 2014, petitioners raised this sole issue:

THE HONORABLE COURT OF APPEALS SERIOUSLY

ERRED AND COMMITTED GRAVE ABUSE OF
DISCRETION, WHICH IF NOT CORRECTED, WOULD
CAUSE GRAVE OR IRREPARABLE DAMAGE OR
INJURY TO HEREIN PETITIONERS WHEN IT HELD
THAT RESPONDENTS INTERSERVE AND
HOTWIRED ARE LEGITIMATE INDEPENDENT
CONTRACTORS

Petitioner's Arguments

Petitioners argued that the CA erred in not applying the case of Coca-
Cola Bottlers Phils., Inc. v. Agito (Agito), 58 wherein the Court found that
Interserve was a labor-only contractor. 59 Petitioners averred that petitioners
and respondents in this case and the case of Agito are similarly situated and

54
55
56
57
Id. at 26.
Id. at 27-29.
Id. at 29-30.
Supra note 3.
f
58 598 Phil. 909 (2009).
59 Id. at 930.
 Decision 12 G.R. No. 213816

the issues raised are the same; thus, in consonance with the principle of stare
decisis, the ruling inAgito must be likewise applied in their case. 60

Petitioners also pointed out that their employment has not been fixed
for a specific project of undertaking. Their services were continuously utilized
by CCBPI through the intermediation of several labor-only contractors. Thus,
they are considered employees of CCBPI. 61

Lastly, on the issue of illegal dismissal, petitioners contended that the

CA erred in holding that they were not illegally dismissed. CCBPI merely
used the labor-only contractors to remove the employees who filed the
regularization cases against them. Assuming that they were not illegally
dismissed, CCBPI failed to follow the notice before termination provided
under Article 283 of the Labor Code. 62

Respondent's Comment

CCBPI filed its Comment 63 dated January 30, 2015 debunking the
arguments raised by petitioners. It raised that the arguments in the petition
were mere rehash of the issues raised by petitioners before the CA, NLRC and
LA. These issues have been squarely ruled upon by these courts, and thus, the
petition lacks merit. 64

CCBPI averred that the CA did not commit grave abuse of discretion
in finding that Interserve and Hotwired are legitimate job contractors. Both
contractors have independent business from CCBPI and have substantial
capitalization. According to CCBPI, in order for there to be a finding of a
labor-only contracting, petitioners must establish that Interserve and Hotwired
do not have a substantial capital or investment, the workers are performing
jobs directly related to the principal's main business and the contractor does
not exercise control over the workers. So even if workers are performing jobs
directly related to the business of the principal, absent the element of lack of
substantial capital and power of control, there is no labor-only contracting. 65

Further, CCBPI argued that the cases cited by petitioners, particularly

the case of Magsalin and Agito do not apply to the case at hand. The
circumstances of petitioners are entirely different from the employees
involved in those cases. 66

Lastly, CCBPI reiterated its contention that there is no employer-

employee relationship between them and petitioners, applying the four-fold
test. Thus, it cannot be held liable for the illegal dismissal of petitioners and

r
60
Rollo, pp. 57-58.
61
Id. at 54, 57.
62
Id. -at 56-57.
63
Id. at 284-332.
64
Id. at 303-304.
65 Id. at304-3l3.
66 Id. at313-3!8.
 Decision 13 G.R. No. 213816

non-compliance with the provisions of Article 283 of the Labor Code on

notice before termination. 67

Issues

Upon review of the entire records of the case, this Court will discuss
the following main issues, to wit:

1. Whether Interserve and Hotwired are labor-only contractors?

Corollarily, whether or not there is an employer-employee relationship
between CCBPI and petitioners
2. Whether petitioners were illegally dismissed by
CCBPI/Interserve/Hotwired

Ruling of the Court

The petition is meritorious.

As a rule, the determination of whether an employer-employee

relationship exists between the parties involves factual matters that are
generally beyond the ambit of this Petition as only questions of law may be
raised in a petition for review on certiorari. However, this rule allows certain
exceptions, such as: (1) when the findings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse
of discretion; (4) when the _judgment is based on a misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when in making its
findings the Corut of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the appellee;
(7) when the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the petitioner's main and
reply briefs are not disputed by respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the
evidence on record; and (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties, which, if
properly considered, would justify a different conclusion. 68 In this case, We
hold that the second and fourth exceptions are present thus, this Court deems
it proper to reassess the findings in order to arrive at a pr.aper and just
conclusion.

Labor-only contracting refers to the arrangement where the contractor

or subcontractor merely recruits, supplies or places workers to perform a job
or work for a principal. Under Sec. 5 of the DOLE) Department Order (DO)
No. 174, series of 2017, 69 there is labor-only contracting when: (a) the
contractor or subcontractor does not have substantial capital or does not have

67
68
69
Id. at318-329.
Sps. Almendrala v. Sps. Ngo, 508 Phil. 305, 315-316 (2005).
Rules Implementing Article 106-109 of the Labor Code, as amended.
7
 Decision 14 G.R. No. 213816

investment in tools, equipment, machineries, supervision and work premises

and the employees are performing activities which are directly related to the
main business of the principal; or (b) the contractor or subcontractor does not
exercise the right of control over the work of the employees except as to the
result thereto.

Accordingly, there are two instances when a contractor or subcontractor

is deemed to be engaged in labor-only contracting. In the first instance, there
are two indicators: (1) the contractor or subcontractor does not have
substantial capitalization or it does not have investment in tools, equipment,
machineries, supervision and work premises and (2) its employees are
performing activities or jobs which are directly related and indispensable to
the main business of the principal. In the second instance, the principal, not
the contractor or subcontractor, exercises the power of control over the
manner and method of the employees' work.

Upon review of the records, We rule that Interserve and Hotwired are
engaged in labor-only contracting under the first instance. As petitioners
pointed out, Interserve and Hotwired do not have investment or capitalization
in tools, equipment, machineries, supervision and work premises. Petitioners
worked in the premises owned by CCBPI. The tools, machineries and
equipment they use all belong to CCBPI. Neither Interserve nor Hotwired
submitted any evidence to show that they own the delivery trucks,
machineries and equipment used by the employees in storing and delivering
the softdrinks. At the jobsite, petitioners were given tasks and assignments by
the sales supervisors and salesmen of CCBPI. These facts belie the claim that
Interserve or Hotwired has substantial capitalization in tools, machineries,
equipment, supervision and work premises.

CCBPI submitted the following evidence to prove that Interserve had

substantial capitalization: ( 1) Service Agreement between Interserve and
CCBPI; and (2) Interserve's Balance Sheet and Income Statement.
Meanwhile, the following documents were submitted for Hotwired: (1)
Hotwired' s Articles of Incorporation; (2) Warehouse Management Agreement
between Hotwired and CCBPI; and (3) Delivery Agreement between
Hotwired and CCBPI. From these documents, CCBPI averred that Interserve
has total capitalization of Pll,658,220.26 and total assets of P27,509,716.32
with property and equipment worth Pl2,538,859.55. On the other hand,
CCBPI raised that Hotwired has a total authorized capital stock of
Pl0,000,000.00, out of which P2,500,000.00 is subscribed and paid up.

However, having substantial capitalization does not easily convince

this Court that Interserve and Hotwired are legitimate job contractors.
Jurisprudence has established that this Court does not set an absolute figure
for what it considers substantial capital for an independent job contractor, but
it measures the same against the type of work which the contractor is obligated
to perform for the principal. In this case, Interserve entered into a Service
Agreement with CCBPI wherein it will provide pool of relievers to the latter
in case there would be absent employees or there would be an upsurge in the
f
 Decision 15 G.R. No. 213816

workload. 70 Hotwired was engaged for warehousing management and

delivery services. 71

Be that as it may, neither Interserve nor Hotwired presented evidence

to show that they possess tools and equipment necessary in the performance
of the agreements they entered into with CCBPI. Interserve merely provides
manpower to CCBPI which is tantamount to labor-only contracting. Hotwired
does not have any tool or equipment it uses in the warehouse management. It
did not show that it owns any forklift or trucks used in the loading and
unloading of the products. The warehouse being used as storage of the goods
was owned by CCBPI. Further, it failed to show evidence of
ownership/possession of delivery trucks sufficient to fulfill the delivery
operations under the Delivery Agreement.

A finding that a company has substantial capitalization does not

automatically result to a finding that it is an independent job contractor. In the
case of San Miguel Corp. v. MAERC Integrated Services Inc., 72 the investment
of MAERC, the contractor therein, in the form of buildings, tools, and
equipment of more than P4,000,000.00 did not impress this Court, which still
declared MAERC to be a labor-only contractor. 73 Likewise, in the case of
DOLE Philippines Inc. v. Esteva, 74 this Court did not recognize the contractor
therein as a legitimate job contractor, despite its paid-up capital of over
P4,000,000.00, in the absence of substantial investment in tools and
equipment used in the services it was rendering. 75

Similar to the above-cited cases, We are not convinced that Interserve

and Hotwired are legitimate job contractors in absence of proof that they have
substantial investment in tools, equipment, machineries among others.

Moreover, the fact that the petitioners are performing activities directly
related and indispensable to the main business of CCBPI is well-established.
According to CCBPI, it is engaged in the business of manufacturing,
distributing and marketing of soft drinks and beverage products. Meanwhile,
the petitioners, as route helpers, delivery truck drivers and forklift operators
are doing tasks necessary, pertinent and vital to the operations ofCCBPI. They
are in charge of preparing the products from the warehouse, loading and
unloading the products to the delivery trucks, deliver the soft drinks to the
clients in the assigned areas and bring back the undelivered goods to the
warehouse. These tasks are indispensable in the aspect of distribution and
marketing of soft drinks, which is the main business of CCBPI.

As a matter of fact, jurisprudence has established the relationship

between the nature of the work of route helpers, drivers and forklift operators
with respect to the principal business of CCBPI. As early as the case of
70
71

72

73
74
75
Rollo, p. 131.
Id. 123-124.
453 Phil. 543 (2003).
Id. at 566.
53 8 Phil. 817 (2006).
Id. at 867.
t
 Decision 16 G.R. No. 213816

Magsalin v. National Organization of Working Men 76 this Court has ruled that
route helpers perform activities that are necessary and desirable in the usual
business or trade of CCBPI that could qualify them as regular employees. 77

The employees in Magsalin are sales route helpers employed by CCBPI

on a day-to-day basis to work as relievers or substitutes to absent employees
or whenever CCBPI would need more workers in times of high demand from
clients. They claimed for regularization which CCBPI refused to grant.7 8

According to the Court in the Magsalin case, the applicable test is the
reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. The
standard, supplied by the law itself, is whether the work undertaken is
necessary or desirable in the usual business or trade of the employer, a fact
that can be assessed by looking into the nature of the services rendered and its
relation to the general scheme under which the business or trade is pursued in
the usual course. 79 Looking at the nature of the services rendered by the route
helpers in that case, the Court concluded that they perform activities
indispensable to the main operations of the CCBPI. The Court held:

The argument of petitioner (CCBPI) that its usual

business or trade is softdrink manufacturing and that the
work assigned to respondent workers as sales route helpers
so involves merely "postproduction activities," one which is
not indispensable in the manufacture of its products, scarcely
can be persuasive. If, as so argued by petitioner company,
only those whose work are directly involved in the
production of softdrinks may be held performing functions
necessary and desirable in its usual business or trade, there
would have then been no need for it to even maintain regular
truck sales route helpers. The nature of the work performed
must be viewed from a perspective of the business or trade
in its entirety and not on a confined scope.

The repeated rehiring of respondent workers and the

continuing need for their services clearly attest to the
necessity or desirability of their services in the regular
conduct of the business or trade of petitioner company. 80

The ruling in Magsalin was reiterated in the case of Pacquing v. Coca-

Cola Philippines, Inc. 81 wherein the Court applied the principle of stare
decisis. In the case of Pacquing, the petitioners were also sales route helpers
who claimed for regularization but later were illegally dismissed. 82 CCBPI
argued that petitioners therein were not regular employees but temporary

76
45 I Phil. 254 (2003).
n
78
79
80
81
Id. at 262.
Id. at 258-259.
Id. at 260-26 J.
Id. at261-262.
1·
567 Phil. 323 (2008).
82
Id. at 328-329.
 Decision 17 G.R. No. 213816

workers engaged for a five-month period to work as substitutes to regular

employees. 83 The Court therein ruled:

Under the principle of stare decisis et non quieta

movere (follow past precedents and do not disturb what has
been settled), it is the Court's duty to apply the previous
ruling in Magsalin to the instant case. Once a case has been
decided one way, any other case involving exactly the same
point at issue, as in the case at bar, should be decided in the
same manner. Else, the ideal of a stable jurisprudential
system can never be achieved. 84

Thus, it was held in Pacquing that sales route helpers are considered
regular employees ofCCBPI because the nature of their work is necessary and
desirable in the main business or trade of CCBPI. 85

A similar issue was raised in the case of Coca-Cola Bottlers Phils., Inc.
v. Agito86 But in this case, the employees affected are salesmen assigned at
the Lagro Sales Office of CCBPI. In the case of Agito, the workers filed a
complaint for reinstatement after they had been unjustly dismissed from their
employment. They averred that they are regular employees of CCBPI. On the
other hand, CCBPI argues that it is not the employer of the workers but
instead, they are the employees ofinterserve, a legitimate job contractor. 87

The Court in that case ruled that salesmen are performing tasks which
are necessary and indispensable to the business or trade of CCBPI, to wit:

Respondents [Agito et al.] worked for petitioner

(CCBPI) as salesmen, with the exception of respondent Gil
Francisco whose job was designated as leadman. In the
Delivery Agreement between petitioner and TRMD
Incorporated, it is stated that petitioner is engaged in the
manufacture, distribution and sale of softdrinks and other
related products. The work of respondents, constituting
distribution and sale of Coca-Cola products, is clearly
indispensable to the principal business of petitioner. The
repeated re-hiring of some of the respondents supports this
finding. Petitioner also does not contradict respondents'
allegations that the fo1mer has Sales Departments and Sales
Offices in its various offices, plants, and warehouses; and
tl1at petitioner hires Regional Sales Supervisors and District
Sales Supervisors who supervise and control the salesmen
and sales route helpers." 88 (Emphasis in the original)

In addition to that, the Court therein categorically ruled that Interserve

was engaged in labor-only contracting

83 Id. at 329.

'
84 Id. at 340-341.
85 Id. at 339-340.
86
598 Phil. 909 (2009).
87 Id. at 915.
88 Id. at 925-926.
 Decision 18 G.R No. 213816

Consequently, in another case, the Court reiterated the ruling in

Magsalin wherein it was held that route helpers are regular employees of
CCBPI. In Coca-Cola Bottlers Phils., Inc. v. Dela Cruz, 89 the workers therein
filed a complaint for regularization and impleaded CCBPI and its contractors
Peerless Integrated Service Inc. and Excellent Partners Cooperative Inc. They
alleged that they have been working for CCBPI and that they have been hired
directly by CCBPI or through its contractors. They posited that they have been
performing tasks which are directly related to the business of CCBPI. The
company contends that the workers are employees of either Peerless or
Excellent and that these companies are independent job contractors. 90

The Court ruled in Dela Cruz that the sales route helpers were doing
tasks that are related to the distribution and sale of CCBPI's products, which
is part of its usual business or trade, to wit:

In plainer terms, the contracted personnel (acting as sales

route helpers) were only engaged in the marginal work of
helping in the sale and distribution of company products;
they only provided the muscle work that sale and distribution
required and were thus necessarily under the company's
control and supervision in doing these tasks.

Still another way of putting it is that the contractors were

not independently selling and distributing company
products, using their own equipment, means and methods of
selling and distribution; they only supplied the manpower
that helped the company in the handing of products for sale
and distribution. In the context of D.O. 18-02, the
contracting for sale and distribution as an independent and
self-contained operation is a legitimate contract, but the pure
supply of manpower with the task of assisting in sales and
distribution controlled by a principal falls within prohibited
labor-only contracting. 91

The case of Bas an v. Coca-Cola Bottlers Philippines Inc. 92 is similar to

the case of Pacquing wherein CCBPI hired temporary route helpers to act as
substitutes for absent regular employees or to report in case there is a high
volume ofwork. 93 The Court in that case reiterated the ruling in Pacquing and
Magsalin that route helpers are regular employees because their work is
necessary or desirable to the usual business or trade of CCBPI. 94

More recently, the Court has decided similar issues in the cases of
Quintanar v. Coca-Cola Bottlers, Philippines, Inc. 95 and Lingat v. Coca-Cola
Bottlers Philippines, Inc. 96 which find application in the case at hand.

89
622 Phil. 886 (2009).
90
Id. at 893-895.
91
Id. at 906.
92
753 Phil. 74 (2015).
93
Id. at 78-79.
94
Id. at 86.
95
788 Phil. 3 85 (2016).
96
G.R. No. 205688, July 4,2018.
 Decision 19 G.R. No. 213816

In Quintanar, the workers involved are route helpers who were tasked
to distribute Coca-Cola products to the stores and customers in their assigned
areas/routes. They were directly hired by CCBPI at first and then transfe1Ted
to the different contractors, namely: Lipercon Services Inc., People's Services
Inc., ROMAC and now Interserve Management Manpower Resources. They
filed claims before the DOLE asserting that they are regular employees of
CCBPI and are entitled to the benefits and emoluments accorded to regular
employees. They were dismissed by CCBPI upon learning of the claims they
filed before DOLE. CCBPI counters that Interserve is an independent job
contractor and that it is not the employer of the workers. 97

The Court in Quintanar ruled that the characterization of the

relationship between route helpers and CCBPI is no longer a novel issue.
Citing the case of Mags al in, the Court reiterated the finding that "the repeated
rehiring of respondent workers and the continuing need for their services
clearly attest to the necessity or desirability of their services in the regular
conduct of the business or trade of the petitioner company." 98 Similar to the
case of Pacquing, the Court applied the principle of stare decisis and held that
an issue already decided must be upheld absent any strong or compelling
reason to abandon the same. In that case, CCBPI failed to show any strong or
compelling reason to abandon the ruling established in the Magsalin case.
Thus, the Court ruled that route helpers are considered regular employees of
CCBPI as held in Magsalin and Pacquing. 99

Meanwhile, in the case of Lingat, Lingat was hired as a plant driver and
forklift operator while Altiveros was assigned as a segregator/mixer. They
were employees of CCBPI for more than a year and then they were transferred
from one agency to another which included Lipercon Services Inc., People
Services Inc., Interserve Management Manpower Resources Inc., and Monte
Daples Trading Corp. (MDTC). They contended that the agencies were labor-
only contractors and that they didn't have any equipment, machinery and
work premises for warehousing purposes. CCBPI owned the warehouse they
were working at and the supervisors who were overseeing their work were
employees of CCBPI. They were illegally dismissed by CCBPI for
'overstaying'. On the other hand, CCBPI contends that it is not the employer
ofLingat and Altiveros and that MDTC has an independent business separate
from CCBPI. 100

The Court therein ruled that Lingat are regular employees of CCBPI
and not of MDTC because they were performing tasks necessary and
indispensable to the business of CCBPI, to wit:

Here, based on their Warehousing Management

Agreement, CCBPI hired MDTC to perform warehousing
management services,. which it claimed did not directly
relate to its (CCBPI's) manufacturing operations. However,

97
Supra note 95.
98
Id. at 403.
99 Id. at 404.
100
Supra note 96 at 98.
 Decision 20 G.R. No. 213816

it must be stressed that CCBPI's business not only involved

the manufacture of its products but also included their
distribution and sale. Thus, CCBPI's argument that
petitioners were employees of MDTC because they
performed tasks directly related to "warehousing
management services," lacks merit. On the contrary, records
show that petitioners were performing tasks directly related
to CCBPI's distribution and sale aspects of its business.

To reiterate, CCBPI is engaged in the manufacture,

distribution, and sale of its products; in turn, as plant driver
and segregator/mixer of soft drinks, petitioners were
engaged to perform tasks relevant to the distribution and sale
of CCBPI's products, which relate to the core business of
CCBPI, not to the supposed warehousing service being
rendered by MDTC to CCBPI. Petitioners' work were (sic)
directly connected to the achievement of the purposes for
which CCBPI was incorporated. Certainly, they were regular
employees of CCBPI. 101

Similar to the above-mentioned cases, the petitioners herein are route

helpers, delivery truck drivers and forklift operators. Similar to the cases of
Agito, Dela Cruz, Quintanar and Lingat, the petitioners were hired by
contractors who had warehouse management agreements, delivery
agreements and service agreements with CCBPI. In these four cases, the Court
ruled that the contractors engaged by CCBPI were labor-only contractors and
the workers were doing tasks that are directly related and indispensable to the
business or trade of CCBPI, particularly in the aspect of distribution and sale
of its products. Hence, the Court held that as such, the workers were
considered regular employees of CCBPI.

Accordingly, the issue of whether route helpers are regular employees

of CCBPI has long been resolved in a long line of cases starting with the case
of Mags alin as early as May 2003. It is worthy to note that the Court has been
consistent with its rulings in accordance with the principle of stare decisis.
This Court held in one case that the stare decisis rule bars the relitigation of
an issue long settled except when strong and compelling reasons arise to
reconsider it anew, viz:

Time and again, tl1e court has held that it is a very

desirable and necessary judicial practice that when a
court has laid down a principle of law as applicable to a
certain state of facts, it will adhere to that principle and apply
it to all future cases in which the facts are substantially the
same. Stare decisis et non quieta movere. Stand by the
decisions and disturb not what is settled. Stare
decisis simply means that for the sake of certainty, a
conclusion reached in one case should be applied to those
that follow if the facts are substantially the same, even
though the parties may be different. It proceeds from the first
principle of justice that, absent any powerful
countervailing considerations, like cases ought to be
1
IOI
Supra note 96.
 Decision 21 G.R. No. 213816

decided alike. Thus, where the same questions relating to

the same event have been put forward by the parties similarly
situated as in a previous case litigated and decided by a
competent court, the rule of stare decisis is a bar to any
attempt to relitigate the same issue. 102 (Emphasis and
italics supplied)

As follows, We rule that the petitioners who are performing tasks

indispensable to the usual business or. trade of CCBPI are considered regular
employees. Interserve and Hotwired, which are found to lack investment in
tools, equipment, machineries, supervision and work premises, are considered
engaged in labor-only contracting.

Under Section 7 ofD.O. No. 174, s. 2017, a principal is deemed as the

employer of the contractor's or subcontractor's employees upon a fmding that
the latter is a labor-only contractor, to wit:

Section 7. When principal is deemed the direct

employer of the contractor's or subcontractor's
employees. In the event that there is a finding that the
contractor or subcontractor is engaged in labor-only
contractor under Section 5 and other illicit forms of
employment arrangements under Section 6 of these Rules,
the principal shall be deemed the direct employer of the
contractor's or subcontractor's employees. (Emphasis
supplied)

Thus, the LA, as affirmed by NLRC and CA, en-ed in dismissing the
complaint with respect to CCBPI for lack of jurisdiction. CCBPI is the direct
employer of the petitioners, thus it is liable for their claims.

On the issue of illegal dismissal, it is not contended that the petitioners

were dismissed from their respective positions upon the alleged termination
of the Warehousing Management Agreement and Service Agreement with
Hotwired and Interserve, respectively. They were refused entry to the work
premises of CCBPI. CCBPI argues that it was because of the expiration of the
contract with Interserve and Hotwired that petitioners no longer reported to
work. However, this is not a just or authorized cause to dismiss petitioners'
services. Articles 282-284 of the Labor Code provide:

Article 282. Termination by employer. An

employer may terminate an employment for any of the
following causes:
a. Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
b. Gross and habitual neglect by the employee of his
duties;
r
102 Chinese Young Men's Christian Association of the Philippine Islands v. Remington Steel
Corporation, 573 Phil. 320 (2008), citing Ty v. Banco Filipino Savings & Mortgage Bank, 511
Phil. 510, 520-521 (2005).
 .,

Decision 22 G.R. No. 213816

c. Fraud or willful breach by the employee of the trust

reposed in him by his employer or duly authorized
representative;
d. Commission of a crime or offense by the employee
against the person of his employer or any immediate member
of his family or his duly authorized representatives; and
e. Other causes analogous to the foregoing.

Article 283. Closure of establishment and reduction of

personnel. The employer may also terminate the
employment of any employee due to the installation oflabor-
saving devices, redundancy, retrenchment to prevent losses
or the closing or cessation of operation of the establishment
or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a
written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of
labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay
for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not
due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at
least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months
shall be considered one (1) whole year.

Article 284. Disease as ground for termination. An

employer may terminate the services of an employee who
has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial
to his health as well as to the health of his co-employees:
Provided, That he is paid separation pay equivalent to at least
one (I) month salary or to one-half (1/2) month salary for
every year of service, whichever is greater, a fraction of at
least six (6) months being considered as one (1) whole year.
(Emphasis supplied)

N9where in these just or authorized causes mention expiration of

contract. Thus, it was illegal for CCBPI to terminate the petitioners. At
the same time, there was no clear showing that petitioners were afforded due
process when they were terminated. As a matter of fact, the petitioners pointed
out that CCBPI did not comply with the provisions of Art. 283 of the Labor
Code on notice before dismissal. Therefore, their dismissal was without valid
cause and due process of law; as such, the same was illegal.

Considering that petitioners were illegally terminated, CCBPI,

Interserve and Hotwired are solidarily liable for the rightful claims of
petitioners.
 Decision 23 G.R. No. 213816

Settled is the rule that an employee who is unjustly dismissed from

work shall be entitled to reinstatement without loss of seniority rights and
other privileges, and to his full backwages, inclusive of allowances and to his
other benefits or their monetary equivalent computed from the time his
compensation was withheld up to the time of actual reinstatement. If
reinstatement is not possible, however, the award of separation pay is
proper.103

Backwages are granted on grounds of equity to workers for earnings

lost due to their illegal dismissal from work. They are a reparation for the
illegal dismissal of an employee based on earnings which the employee would
have obtained, either by virtue of a lawful decree or order, as in the case of a
wage increase under a wage order, or by rightful expectation, as in the case of
one's salary or wage. The outstanding feature ofbackwages is thus the degree
of assuredness to an employee that he would have had them as earnings had
he not been illegally terminated from his employment. 104

Petitioners herein were unjustly dismissed by CCBPI when they were

prevented from entering the work premises on January 30, 2008. The
petitioners have lost the.earnings they should have been entitled to had they
not been illegally dismissed. Thus, the petitioners are entitled to their full
backwages inclusive of all allowances and other benefits from the time
that they were illegally dismissed or on January 30, 2008 when they were
banned from reporting to their duty until the finality of this Decision.

However, with respect to the claims and benefits under the CBA, the
same cannot be granted because of the failure to show that the petitioners are
part of the bargaining unit and their failure to provide a copy of the CBA
provisions. The Court cannot grant the saine.

Further, similar to the case of Lingat and Altiveros, almost 13 years

have lapsed since the inception of this case on December 11, 2007. For
practical reasons and to serve the best interest of the parties, the Court deems
it proper to award separation pay to the petitioners, instead of reinstatement.
Thus, the petitioners are entitled to separation pay equivalent to one
month's salary for every year of service from January 30, 2008 until the
finality of this Decision.

Finally, since petitioners were compelled to litigate to protect their

rights and interests, attorney's fees of 10% of the monetary award is likewise
awarded. The legal interest of 6% per annum shall be imposed on all
mooeta,y gwo~ from tha finullty of lha Decision until paid in full. ,
t/1,

103
JCT Marketing Services Inc. v. Sales, 769 Phil. 498, 524 (2015).
104 Equitable Banking Corporation (EQUITABLE-PC! BANK) v. Sadac, 523 Phil. 781,819 (2006),
citing Paguio v. Philippine long Distance Telephone Co., Inc., 441 Phil. 679, 690-691 (2002).
 •

Decision 24 G.R. No. 213816

WHEREFORE, the petition is GRANTED. The Decision dated

September 26, 2013 and the Resolution dated May 5, 2014 of the Court of
Appeals in CA-G.R. SP No. 116615, affirming the Decision dated March 31,
2010 and the Resolution dated August 12, 2010 of the National Labor
Relations Commission and the Decision dated September 22, 2008 of the
Labor Arbiter dismissing the complaint of the petitioners are REVERSED
and SET ASIDE. Accordingly, petitioners are awarded the following:

1. Full backwages, inclusive of all allowances and other benefits, from

January 30, 2008 until fmality of this Decision;
2. Separation pay, in lieu of reinstatement, equivalent to one month of
salary for every year of service with a fraction of a year of at least six
months as one whole year from January 30, 2008 until fmality of this
Decision; and
3. Attorney's fees equivalent to 10% of the monetary grants to them.

Let this case be REMANDED to the Labor Arbiter for a detailed

computation of the monetary awards.

All monetary awards shall earn interest at the legal rate of six percent
(6%) per annum from the finality of this Decision until fully paid.
Decision 25 G.R. No. 213816

WE CONCUR:

Chief ustice

SAMUEL H. GAERLAN
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.