Commander Realty v. Fernandez
REITERATIONFacts
The Antecedents: Respondents, a group of individuals, filed a complaint against Commander Realty, Inc. (CRI) and its president, alleging they were employees of CRI. They claimed CRI failed to register them with the Social Security System (SSS) and remit their contributions, thereby depriving them of SSS benefits. The respondents further alleged they were dismissed after demanding registration. CRI, in its defense, asserted that the respondents were not its employees, but rather workers hired by contractors for construction projects owned by CRI's president, Wilhelmina Andrada, for her personal properties. CRI maintained that it had no direct hand in hiring or supervising these workers, and therefore, no employer-employee relationship existed between them. Procedural History: The respondents' claim was initially filed with the Social Security Commission (SSC). Concurrently, they filed separate complaints with the National Labor Relations Commission (NLRC) for illegal dismissal and non-payment of various labor benefits. The Labor Arbiter dismissed the NLRC complaints, finding no employer-employee relationship. The NLRC affirmed this decision on appeal. However, the SSC ruled in favor of the respondents, ordering CRI to remit unremitted SSS contributions and penalties. CRI appealed the SSC decision to the Court of Appeals (CA), while the respondents appealed the NLRC decision to the CA. The CA initially affirmed the SSC ruling, leading CRI to file a motion for reconsideration. Meanwhile, the respondents' petition to the CA regarding the NLRC decision was dismissed, and this dismissal was affirmed by the Supreme Court. Subsequently, the CA denied CRI's motion for reconsideration, prompting CRI to file the instant petition before the Supreme Court. The Petition: Petitioner Commander Realty, Inc. (CRI) filed a Petition for Review on Certiorari with the Supreme Court, assailing the Court of Appeals' decision that affirmed the Social Security Commission's ruling. CRI argued that the CA erred in not holding its resolution in abeyance until the Supreme Court resolved a related matter, and in not granting its motion for reconsideration on the grounds of res judicata. CRI contended that prior decisions from the Labor Arbiter, the NLRC, and the Supreme Court itself (in G.R. No. 164399) had definitively established the absence of an employer-employee relationship between CRI and the respondents. CRI asserted that these prior rulings, particularly the Supreme Court's dismissal of the respondents' petition, should have precluded the CA from affirming the SSC's decision, which was predicated on the existence of such a relationship. The core of CRI's petition is that the principle of res judicata should have been applied to prevent conflicting judgments on the employer-employee issue.
Issue(s)
Whether the Court of Appeals erred in not holding in abeyance its resolution of the motion for reconsideration filed by petitioner until after the resolution of the Supreme Court in G.R. No. 164399 shall have become final and executory, considering the principle of res judicata. Whether the Court of Appeals erred in not granting petitioner's motion for reconsideration on the ground of res judicata, specifically the concept of conclusiveness of judgment, given the prior rulings on the employer-employee relationship.
Ruling
The petition is meritorious. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 78298 are REVERSED AND SET ASIDE.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in not holding its resolution in abeyance: The Supreme Court held that the petition is meritorious. The Court found that the issue of whether an employer-employee relationship existed between Commander Realty, Inc. (CRI) and the respondents had already been definitively resolved by the National Labor Relations Commission (NLRC) and affirmed by the Court of Appeals (CA) and the Supreme Court itself in a prior case (G.R. No. 164399). The Labor Arbiter and the NLRC had consistently ruled that no such relationship existed, and the CA had dismissed the respondents' petition for certiorari, which was subsequently denied by the Supreme Court. This established a final and executory ruling on the matter. Petitioner CRI had apprised the CA of these prior rulings in its motion for reconsideration. Therefore, it was incumbent upon the CA to defer action on CRI's motion until the Supreme Court had resolved the pending motion for reconsideration in G.R. No. 164399. Since the Supreme Court had already denied the respondents' motion with finality, its resolution should prevail over the CA's decision and the SSC's order. The CA's failure to recognize the binding effect of the Supreme Court's resolution constituted reversible error. The Court cited the case of Smith Bell & Co., Inc. v. Court of Appeals to support its ruling, where a similar situation involving conflicting rulings on employer-employee relationship was resolved based on res judicata. On the issue of whether the Court of Appeals erred in not granting the motion for reconsideration on the ground of res judicata: The Court emphasized the principle of res judicata, particularly the concept of "conclusiveness of judgment." This principle dictates that once a matter has been litigated and decided by a court of competent jurisdiction, it cannot be relitigated between the same parties or their privies. The fact that the respondents filed a complaint with the Social Security Commission (SSC) seeking SSS coverage and contributions, while their prior case with the NLRC was for illegal dismissal, does not alter the applicability of res judicata. The central issue in both cases was the existence of an employer-employee relationship.
Main Doctrine
A final and executory decision of the National Labor Relations Commission (NLRC) and the Supreme Court on the absence of an employer-employee relationship between parties bars a subsequent claim before the Social Security Commission (SSC) for SSS coverage and contributions based on the same alleged relationship, due to the principle of res judicata.