Vigilla v. Philippine College of Criminology
REITERATIONFacts
The Antecedents: Petitioners were employed as janitors, janitresses, and a supervisor in the Maintenance Department of Philippine College of Criminology Inc. (PCCr). They were made to believe they were employed by Metropolitan Building Services, Inc. (MBMSI), a janitorial services company whose President and General Manager was also PCCr's Senior Vice President for Administration. In 2008, PCCr discovered MBMSI's Certificate of Incorporation had been revoked in 2003. Consequently, in March 2009, PCCr terminated its relationship with MBMSI, leading to the dismissal of the maintenance personnel, except for one who was retired. The dismissed employees subsequently filed complaints for illegal dismissal and various monetary claims against MBMSI, its officers, PCCr, and its President. Procedural History: The Labor Arbiter (LA) ruled that PCCr was the real employer, MBMSI was a labor-only contractor, and the dismissal was in bad faith. The LA ordered reinstatement and payment of back wages, separation pay, service incentive leave pay, damages, and attorney's fees. The National Labor Relations Commission (NLRC) affirmed the LA's findings but excused PCCr from liability due to releases, waivers, and quitclaims executed by the petitioners in favor of MBMSI, citing solidary liability and Article 1217 of the Civil Code. The NLRC later modified its resolution, applying the quitclaims to 17 of the complainants. The Court of Appeals (CA) affirmed the NLRC's decision, holding that the quitclaims extinguished PCCr's liability and upholding the authenticity of the notarized documents. The Petition: Petitioners seek a review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision. They argue that the CA erred in considering MBMSI's liability as solidary with PCCr, in not affirming the LA's decision regarding the 17 petitioners, in upholding the NLRC's finding that their claims were settled by alleged releases, waivers, and quitclaims, and in not considering substantial evidence disputing the authenticity of these documents. The core issue is whether the releases, waivers, and quitclaims validly settled their claims, considering the alleged forgery, the dissolved status of MBMSI, and the nature of labor-only contracting.
Issue(s)
Whether or not the petitioners executed valid releases, waivers, and quitclaims in favor of MBMSI. Whether or not a dissolved corporation can enter into an agreement such as releases, waivers, and quitclaims beyond the 3-year winding up period under Section 122 of the Corporation Code. Whether or not MBMSI was a labor-only contractor, and if so, whether it is solidarily liable with the employer PCCr, and the effect of the releases, waivers, and quitclaims on PCCr's liability.
Ruling
The petition is DENIED. The liabilities of the respondents to petitioners are deemed extinguished.
Ratio Decidendi
On the validity of the releases, waivers, and quitclaims: The Court found the releases, waivers, and quitclaims to be valid. The petitioners' claim of forgery was deemed an afterthought, raised only after the NLRC declared their claims settled. They had multiple opportunities to dispute the documents before the LA and NLRC but failed to do so. The Court reiterated that it is not a trier of facts, and the findings of the CA and NLRC regarding the validity and due execution of these documents, which were duly notarized, are binding. The notarization provided prima facie evidence of due execution, and the petitioners failed to present concrete proof of forgery. The Court also held that the failure of the notary public to submit his notarial report does not invalidate the notarized documents, as the parties should not suffer from the negligence of the notary public. On the revocation of MBMSI's Certificate of Incorporation: The Court held that the revocation of MBMSI's Certificate of Incorporation did not terminate its liabilities. Section 122 of the Corporation Code provides a three-year winding up period, and even beyond this period, a corporation can settle its affairs. Furthermore, Section 145 of the Corporation Code explicitly states that no right or remedy, nor any liability incurred by a corporation, shall be removed or impaired by its subsequent dissolution. Thus, the releases, waivers, and quitclaims executed in 2009, six years after MBMSI's dissolution, remained valid and binding. On the solidary liability of a labor-only contractor with the employer and the effect of the releases: The Court affirmed that a labor-only contractor is solidarily liable with the principal employer. This is based on the last paragraph of Article 106 of the Labor Code, which states that in cases of labor-only contracting, the intermediary is merely an agent of the employer, who shall be responsible to the workers as if they were directly employed. This interpretation is supported by Section 19 of DOLE Department Order No. 18-02 and Section 27 of DOLE Department Order No. 18-A, series of 2011. Jurisprudence, such as in Philippine Bank of Communications v. NLRC and San Miguel Corporation v. MAERC Integrated Services, Inc., has consistently held that the principal employer is solidarily liable with the labor-only contractor for all rightful claims of the employees. Consequently, the releases, waivers, and quitclaims executed in favor of MBMSI, the labor-only contractor, extinguished the solidary liability of PCCr, the principal employer, pursuant to Article 1217 of the Civil Code.
Main Doctrine
The releases, waivers, and quitclaims executed by employees in favor of a labor-only contractor extinguish the solidary liability of the principal employer, even if the contractor is a dissolved corporation, provided the releases are valid and the contractor is considered an agent of the principal employer under the law.