Philippine Trust Co. v. Workmen's Compensation Commission
REITERATIONFacts
The Antecedents: Jesus Handinero, employed as a watchman by Pama Special Watchman Agency and assigned to Philippine Trust Company (PTC), died on May 7, 1968, due to cerebral hemorrhage, approximately one day after suffering a stroke while on duty. He had been complaining of bodily manifestations for about two months prior to his death. The deceased was survived by his widow, Concepcion L. Vda. de Handinero, and five children, all dependent on him for support. Procedural History: The private respondents, as claimants, initially filed a complaint against Pama Special Watchman Agency and Cirilo Pama for death compensation benefits. An amended claim was later filed, including Philippine Trust Company (PTC) as a respondent. The Acting Referee initially found the agency liable but, in a subsequent decision, absolved the agency and held PTC liable. PTC appealed to the Workmen's Compensation Commission (WCC), which affirmed the Acting Referee's decision with modifications regarding attorney's fees and costs, ordering PTC to pay death compensation benefits, burial expenses, attorney's fees, and administrative costs. The Petition: PTC filed a petition for review of the WCC decision, contending it was not the employer of the deceased due to its contract with Pama Special Watchman Agency, which stipulated that the guards were exclusive employees of the agency and not of PTC.
Issue(s)
Whether Philippine Trust Company (PTC) is the statutory employer of the deceased Jesus Handinero, despite the contract with Pama Special Watchman Agency. Whether PTC is liable for death compensation benefits, burial expenses, attorney's fees, and administrative costs. Whether PAMA Special Watchman Agency is liable to reimburse PTC for any amounts paid to the claimants.
Ruling
The decision of the Workmen's Compensation Commission is affirmed with the modification that PAMA Special Watchmen Agency is ordered to reimburse and pay Philippine Trust Company all the amounts adjudged against PTC. WHEREFORE, the decision of the Workmen's Compensation Commission is hereby affirmed with the modification that judgment is also rendered, sentencing respondent PAMA Special Watchmen Agency to reimburse and pay petitioner Philippine Trust Co. all the amounts adjudged against, said petitioner in respondent commission's appealed decision.
Ratio Decidendi
On the issue of whether Philippine Trust Company (PTC) is the statutory employer of the deceased Jesus Handinero: The Court affirmed the WCC's finding that PTC is the statutory employer. The Court reasoned that Handinero's work as a watchman was an integral part of PTC's banking business, essential for maintaining peace and order within the premises and protecting the bank's properties and personnel. Although PTC had a contract with Pama Special Watchman Agency stipulating that the guards were exclusive employees of the agency, this contractual stipulation does not negate the employer-employee relationship for purposes of the Workmen's Compensation Act when the work performed is directly related to the principal business of the company. The Court cited Universal Corn Products, Inc. versus Workmen's Compensation Commission to support the principle that even with an intermediary contractor, the company that directly benefits from and supervises the work can be considered a statutory employer. On the issue of PTC's liability for compensation benefits: The Court upheld PTC's liability as the statutory employer. As Handinero's work was part of PTC's business operations, PTC became liable for the death compensation benefits, burial expenses, attorney's fees, and administrative costs as mandated by the Workmen's Compensation Act. This liability arises from the nature of the employment and the work performed, irrespective of the contractual arrangements with the security agency. The Court's affirmation of the WCC decision, which ordered PTC to pay these amounts, underscores this liability. On the issue of PAMA Special Watchman Agency's liability to reimburse PTC: The Court found the cross-claim of PTC against PAMA Special Watchman Agency to be well-taken. The Court reasoned that under the contract for security guard services between PTC and PAMA, the agency had contractually assumed sole responsibility for all liabilities arising under labor laws, including the Workmen's Compensation Act. Therefore, while PTC was statutorily liable to the claimants as the statutory employer, PAMA, as the direct employer, should ultimately bear the financial burden. This was supported by the ruling in Aboitiz & Co., Inc. vs. Workmen's Compensation Commission, which held that the security agency should be held ultimately liable as the direct employer and is contractually bound to hold the principal employer harmless from such claims.
Main Doctrine
A company contracting with a security agency is considered a statutory employer of the guards furnished by the agency, making it liable for death compensation benefits under the Workmen's Compensation Act, although it may seek reimbursement from the security agency based on their contract.