TO BE DIGESTED LABOR REVIEW SET 1

G.R. No. 112139 January 31, 2000

LAPANDAY AGRICULTURAL DEVELOPMENT CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS (Former Eighth Division) and COMMANDO SECURITY
SERVICE AGENCY, INC., respondents.
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision1 of the Court of Appeals2 in CA-G.R. CV No. 33893
entitled COMMANDO SECURITY SERVICE AGENCY, INCORPORATED vs. LAPANDAY AGRICULTURAL
DEVELOPMENT CORPORATION which affirmed the decision3 of the Regional Trial Court, 11th Judicial Region,
Branch 9, Davao City in Civil Case No. 19203-88.
The pertinent facts as found by the Court of Appeals are as follows:
The evidence shows that in June 1986, plaintiff Commando Security Service Agency, Inc., and defendant
Lapanday Agricultural Development Corporation entered into a Guard Service Contract. Plaintiff provided
security guards in defendant's banana plantation. The contract called for the payment to a guard of P754.28 on
a daily 8-hour basis and an additional P565.72 for a four hour overtime while the shift-in-charge was to be
paid P811.40 on a daily 8-hour basis and P808.60 for the 4-hour overtime.
Wage Orders increasing the minimum wage in 1983 were complied with by the defendant. On June 16, 1984,
Wage Order No. 5 was promulgated directing an increase of P3.00 per day on the minimum wage of workers
in the private sector and a P5.00 increase on the ECOLA. This was followed on November 1, 1984 by Wage
Order No. 6 which further increased said minimum wage by P3.00 on the ECOLA. Both Wage Orders contain
the following provision:
"In the case of contract for construction projects and for security, janitorial and similar services, the
increase in the minimum wage and allowances rates of the workers shall be borne by the principal or
client of the construction/service contractor and the contracts shall be deemed amended accordingly,
subject to the provisions of Sec. 3 (b) of this order" (Sec. 6 and Sec. 9, Wage Orders No. 5 and 6,
respectively).
Plaintiff demanded that its Guard Service Contract with defendant be upgraded in compliance with Wage
Order Nos. 5 and 6. Defendant refused. Their Contract expired on June 6, 1986 without the rate adjustment
called for Wage Order Nos. 5 and 6 being implemented. By the time of the filing of plaintiff's Complaint, the
rate adjustment payable by defendant amounted to P462,346.25. Defendant opposed the Complaint by raising
the following defenses: (1) the rate adjustment is the obligation of the plaintiff as employer of the security
guards; (2) assuming its liability, the sum it should pay is less in amount; and (3) the Wage Orders violate the
impairment clause of the Constitution.
The trial court decided in favor of the plaintiff. It held:
xxx xxx xxx
However, in order for the security agency to pay the security guards, the Wage Orders made specific
provisions to amend existing contracts for security services by allowing the adjustment of the consideration
paid by the principal to the security agency concerned. (Eagle Security Agency, Inc. vs. NLRC, Phil.
Tuberculosis Society, Inc. vs. NLRC, et al., May 18, 1989). 1wphi1.nt

The Wage Orders require the amendment of the contract as to the consideration to cover the service
contractor's payment of the increases mandated. However, in the case at bar, the contract for security services
had earlier been terminated without the corresponding amendment. Plaintiff now demands adjustment in the
contract price as the same was deemed amended by Wage Order Nos. 5 and 6.
Before the plaintiff could pay the minimum wage as mandated by law, adjustments must be paid by the
principal to the security agency concerned.
 Given these circumstances, if PTS pays the security guards, it cannot claim reimbursements from
Eagle. But if its Eagle that pays them, the latter can claim reimbursement from PTS in lieu of an
adjustment, considering that the contract had expired and had not been renewed. (Eagle Security
Agency vs. NLRC and Phil. Tuberculosis Society, Inc. vs. NLRC, et al., 18 May 1989).
"As to the issue that Wage Orders Nos. 5 and 6 constitute impairments of contracts in violation of
constitutional guarantees, the High Court ruled" The Supreme Court has rejected the impairment of contract
argument in sustaining the validity and constitutionality of labor and social legislation like the Blue Sunday
Law, compulsory coverage of private sector employees in the Social Security System, and the abolition of
share tenancy enacted pursuant to the police power of the state (Eagle Security Agency, Inc. vs. National
Labor Relation Commission and Phil. Tuberculosis Society, Inc. vs. NLRC, et al., May 18, 1989).
Petitioner's motion for reconsideration was denied; 4 hence this petition where petitioner cites the following grounds to
support the instant petition for review:
1. THE WAGE INCREASES PROVIDED FOR IN THE WAGE ORDERS WERE DUE TO THE GUARDS
AND NOT THE SECURITY AGENCY;
2. A SECURITY AGENCY WHO DID NOT PAY WAGE INCREASE TO ITS GUARDS IT HAD
ALREADY TERMINATED AND WITHOUT THEIR AUTHORIZATION CANNOT INSTITUTE AN
ACTION TO RECOVER SAID WAGE INCREASE FOR ITS BENEFIT;
3. IN THE ABSENCE OF BAD FAITH AND WITHOUT THE TRIAL COURT CORRECTLY
ESTABLISHING THE BASIS FOR ATTORNEY'S FEES, THE SAME MAY NOT BE AWARDED.
4. THE NATIONAL LABOR RELATIONS (SIC) IS THE PROPER FORUM THAT HAS THE
JURISDICTION TO RESOLVE THE ISSUE OF WHETHER OR NOT THE PETITIONER IS LIABLE TO
PAY THE PRIVATE RESPONDENT THE WAGE AND ALLOWANCE INCREASES MANDATED
UNDER WAGE ORDER NOS. 5 AND 6.5
Reiterating its position below, petitioner asserts that private respondent has no factual and legal basis to collect the
benefits under subject Wage Order Nos. 5 and 6 intended for the security guards without the authorization of the
security guards concerned. Inasmuch as the services of the forty-two (42) security guards were already terminated at
the time the complaint was filed on August 15, 1988, private respondent's complaint partakes of the nature of an
action for recovery of what was supposedly due the guards under said Wage Orders, amounts that they claim were
never paid by private respondent and therefore not collectible by the latter from the petitioner. Petitioner also assails
the award of attorney's fees in the amount of P115,585.31 or 25% of the total adjustment claim of P462,341.25 for
lack of basis and for being unconscionable.
Moreover, petitioner submits that it is the National Labor Relations Commission (NLRC) and not the civil courts that
has jurisdiction to resolve the issue involved in this case for it refers to the enforcement of wage adjustment and other
benefits due to private respondent's security guards mandated under Wage Order Nos. 5 and 6. Considering that the
RTC has no jurisdiction, its decision is without force and effect.6
On the other hand, private respondent contends that the basis of its action against petitioner-appellant is the
enforcement of the Guard Service Contract entered into by them, which is deemed amended by Section 6 of Wage
Order No. 5 and Section 9 of Wage Order No. 6; that pursuant to their amended Guard Service Contract, the
increases/adjustments in wages and ECOLA are due to private respondent and not to the security guards who are not
parties to the said contract. It is therefore immaterial whether or not private respondent paid its security guards their
wages as adjusted by said Wage Orders and that since the forty-two (42) security guards are not parties to the Guard
Service Contract, there is no need for them to authorize the filing of, or be joined in, this suit.
As regards the award to private respondent of the amount of P115,585.31 as attorney's fees, private respondent
maintains that there is enough evidence and/or basis for the grant thereof, considering that the adamant attitude of the
petitioner (in implementing the questioned Wage Orders) compelled the herein private respondent, to litigate in court.
Furthermore, since the legal fee payable by private respondent to its counsel is essentially on contingent basis, the
amount of P115,583.31 granted by the trial court which is 25% of the total claim is not unconscionable.
As regards the jurisdiction of the RTC, private respondent alleges that the suit filed before the trial court is for the
purpose of securing the upgrading of the Guard Service Contract entered into by herein petitioner and private
respondent in June 1983. The enforcement of this written contract does not fall under the jurisdiction of the NLRC
because the money claims involved therein did not arise from employer-employee relations between the parties and is
intrinsically a civil dispute. Thus, jurisdiction lies with the regular courts. Private respondent further contends that
petitioner is estopped or barred from raising the question of jurisdiction for the first time before the Supreme Court
after having voluntarily submitted to the jurisdiction of the regular courts below and having lost its case therein. 7
We resolve to grant the petition.
We resolve first the issue of jurisdiction. We agree with the respondent that the RTC has jurisdiction over the subject
matter of the present case. It is well settled in law and jurisprudence that where no employer-employee relationship
exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. 8 In its complaint,
private respondent is not seeking any relief under the Labor Code but seeks payment of a sum of money and damages
on account of petitioner's alleged breach of its obligation under their Guard Service Contract. The action is within the
realm of civil law hence jurisdiction over the case belongs to the regular courts. 9 While the resolution of the issue
involves the application of labor laws, reference to the labor code was only for the determination of the solidary
liability of the petitioner to the respondent where no employer-employee relation exists. Article 217 of the Labor Code
as amended vests upon the labor arbiters exclusive original jurisdiction only over the following:
1. Unfair labor practices;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral exemplary and other form of damages arising from employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving legality of
strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
In all these cases, an employer-employee relationship is an indispensable jurisdictional requisite; 10 and there is none in
this case.
On the merits, the core issue involved in the present petition is whether or not petitioner is liable to the private
respondent for the wage adjustments provided under Wage Order Nos. 5 and 6 and for attorney's fees.
Private respondent admits that there is no employer-employee relationship between it and the petitioner. The private
respondent is an independent/job contractor 11 who assigned security guards at the petitioner's premises for a stipulated
amount per guard per month. The Contract of Security Services expressly stipulated that the security guards are
employees of the Agency and not of the petitioner. 12 Articles 106 and 107 of the Labor Code provides the rule
governing the payment of wages of employees in the event that the contractor fails to pay such wages as follows:
Art. 106. Contractor or sub contractor. Whenever an employer enters into a contract with another person
for the performance of the former's work, the employees of the contractor and of the latter's subcontractor, if
any, shall be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with
this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in the same manner and extent that he is
liable to employees directly employed by him.
xxx xxx xxx
Art. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to
any person, partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.
It will be seen from the above provisions that the principal (petitioner) and the contractor (respondent) are jointly and
severally liable to the employees for their wages. This Court held in Eagle Security, Inc. vs. NLRC 13 and Spartan
Security and Detective Agency, Inc. vs. NLRC 14 that the joint and several liability of the contractor and the principal is
mandated by the Labor Code to assure compliance with the provisions therein including the minimum wage. The
contractor is made liable by virtue of his status as direct employer. The principal, on the other hand, is made the
indirect employer of the contractor's employees to secure payment of their wages should the contractor be unable to
pay them.15 Even in the absence of an employer-employee relationship, the law itself establishes one between the
principal and the employees of the agency for a limited purpose i.e. in order to ensure that the employees are paid the
wages due them. In the above-mentioned cases, the solidary liability of the principal and contractor was held to apply
to the aforementioned Wage Order Nos. 5 and 6. 16 In ruling that under the Wage Orders, existing security guard
services contracts are amended to allow adjustment of the consideration in order to cover payment of mandated
increases, and that the principal is ultimately liable for the said increases, this Court stated:
The Wage Orders are explicit that payment of the increases are "to be borne" by the principal or client. "To be
borne", however, does not mean that the principal, PTSI in this case, would directly pay the security guards
the wage and allowance increases because there is no privity of contract between them. The security guards'
contractual relationship is with their immediate employer, EAGLE. As an employer, EAGLE is tasked,
among others, with the payment of their wages [See Article VII Sec. 3 of the Contract for Security
Services, supraand Bautista vs. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 665].
On the other hand, there existed a contractual agreement between PTSI and EAGLE wherein the former
availed of the security services provided by the latter. In return, the security agency collects from its client
payment for its security services. This payment covers the wages for the security guards and also expenses for
their supervision and training, the guards bonds, firearms with ammunitions, uniforms and other equipments,
accessories, tools, materials and supplies necessary for the maintenance of a security force.
Premises considered, the security guards' immediate recourse for the payment of the increases is with their
direct employer, EAGLE. However, in order for the security agency to comply with the new wage and
allowance rates it has to pay the security guards, the Wage Orders made specific provision to amend existing
contracts for security services by allowing the adjustment of the consideration paid by the principal to the
security agency concerned. What the Wage Orders require, therefore, is the amendment of the contracts as to
the consideration to cover the service contractors' payment of the increases mandated. In the end, therefore,
ultimate liability for the payment of the increases rests with the principal.
In view of the foregoing, the security guards should claim the amount of the increases from EAGLE. Under
the Labor Code, in case the agency fails to pay them the amounts claimed, PTSI should be held solidarily
liable with EAGLE [Articles 106, 107 and 109]. Should EAGLE pay, it can claim an adjustment from PTSI
for an increase in consideration to cover the increases payable to the security guards. 17
It is clear also from the foregoing that it is only when contractor pays the increases mandated that it can claim an
adjustment from the principal to cover the increases payable to the security guards. The conclusion that the right of the
contractor (as principal debtor) to recover from the principal as solidary co-debtor) arises only if he has paid the
amounts for which both of them are jointly and severally liable is in line with Article 1217 of the Civil Code which
provides:
Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which offer to accept.
He who made payment may claim from his codebtors only the share which corresponds to each, with interest
for the payment already made. If the payment is made before the debt is due, no interest for the intervening
period may be demanded. . . .
Pursuant to the above provision, the right of reimbursement from a co-debtor is recognized in favor of the one who
paid.
It will be seen that the liability of the petitioner to reimburse the respondent only arises if and when respondent
actually pays its employees the increases granted by Wage Order Nos. 5 and 6. Payment, which means not only the
delivery of money but also the performance, in any other manner, of the obligation, 18 is the operative fact which will
entitle either of the solidary debtors to seek reimbursement for the share which corresponds to each of the debtors.
The records show that judgment was rendered by Labor Arbiter Newton R. Sancho holding both petitioner and private
respondent jointly and solidarily liable to the security guards in a Decision 19 dated October 17, 1986 (NLRC Case No.
2849-MC-XI-86).20 However, it is not disputed that the private respondent has not actually paid the security guards the
wage increases granted under the Wage Orders in question. Neither is it alleged that there is an extant claim for such
wage adjustments from the security guards concerned, whose services have already been terminated by the contractor.
Accordingly, private respondent has no cause of action against petitioner to recover the wage increases. Needless to
stress, the increases in wages are intended for the benefit of the laborers and the contractor may not assert a claim
against the principal for salary wage adjustments that it has not actually paid. Otherwise, as correctly put by the
respondent, the contractor would be unduly enriching itself by recovering wage increases, for its own benefit.
Finally, considering that the private respondent has no cause of action against the petitioner, private respondent is not
entitled to attorney's fees.
1wphi1.nt

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated May 24, 1993 is REVERSED
and SET ASIDE. The complaint of private respondent COMMANDO SECURITY SERVICE AGENCY, INC. is
hereby DISMISSED.
SO ORDERED.

G.R. No. 153660 June 10, 2003

PRUDENCIO BANTOLINO, NESTOR ROMERO, NILO ESPINA, EDDIE LADICA, ARMAN QUELING,
ROLANDO NIETO, RICARDO BARTOLOME, ELUVER GARCIA, EDUARDO GARCIA and NELSON
MANALASTAS,petitioners,
vs.
COCA-COLA BOTTLERS PHILS., INC., respondent.
BELLOSILLO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision of the Court of
Appeals1 dated 21 December 2001 which affirmed with modification the decision of the National Labor Relations
Commission promulgated 30 March 2001.2
On 15 February 1995 sixty-two (62) employees of respondent Coca-Cola Bottlers, Inc., and its officers, Lipercon
Services, Inc., People's Specialist Services, Inc., and Interim Services, Inc., filed a complaint against respondents for
unfair labor practice through illegal dismissal, violation of their security of tenure and the perpetuation of the "Cabo
System." They thus prayed for reinstatement with full back wages, and the declaration of their regular employment
status.
For failure to prosecute as they failed to either attend the scheduled mandatory conferences or submit their respective
affidavits, the claims of fifty-two (52) complainant-employees were dismissed. Thereafter, Labor Arbiter Jose De Vera
conducted clarificatory hearings to elicit information from the ten (10) remaining complainants (petitioners herein)
relative to their alleged employment with respondent firm.
In substance, the complainants averred that in the performance of their duties as route helpers, bottle segregators, and
others, they were employees of respondent Coca-Cola Bottlers, Inc. They further maintained that when respondent
company replaced them and prevented them from entering the company premises, they were deemed to have been
illegally dismissed.
In lieu of a position paper, respondent company filed a motion to dismiss complaint for lack of jurisdiction and cause
of action, there being no employer-employee relationship between complainants and Coca-Cola Bottlers, Inc., and that
respondents Lipercon Services, People's Specialist Services and Interim Services being bona fide independent
contractors, were the real employers of the complainants. 3 As regards the corporate officers, respondent insisted that
they could not be faulted and be held liable for damages as they only acted in their official capacities while
performing their respective duties.
On 29 May 1998 Labor Arbiter Jose De Vera rendered a decision ordering respondent company to reinstate
complainants to their former positions with all the rights, privileges and benefits due regular employees, and to pay
their full back wages which, with the exception of Prudencio Bantolino whose back wages must be computed upon
proof of his dismissal as of 31 May 1998, already amounted to an aggregate of P1,810,244.00. 4
In finding for the complainants, the Labor Arbiter ruled that in contrast with the negative declarations of respondent
company's witnesses who, as district sales supervisors of respondent company denied knowing the complainants
personally, the testimonies of the complainants were more credible as they sufficiently supplied every detail of their
employment, specifically identifying who their salesmen/drivers were, their places of assignment, aside from their
dates of engagement and dismissal.
On appeal, the NLRC sustained the finding of the Labor Arbiter that there was indeed an employer-employee
relationship between the complainants and respondent company when it affirmed in toto the latter's decision.
In a resolution dated 17 July 2001 the NLRC subsequently denied for lack of merit respondent's motion for
consideration.
Respondent Coca-Cola Bottlers appealed to the Court of Appeals which, although affirming the finding of the NLRC
that an employer-employee relationship existed between the contending parties, nonetheless agreed with respondent
that the affidavits of some of the complainants, namely, Prudencio Bantolino, Nestor Romero, Nilo Espina, Ricardo
Bartolome, Eluver Garcia, Eduardo Garcia and Nelson Manalastas, should not have been given probative value for
their failure to affirm the contents thereof and to undergo cross-examination. As a consequence, the appellate court
dismissed their complaints for lack of sufficient evidence. In the same Decision however, complainants Eddie Ladica,
Arman Queling and Rolando Nieto were declared regular employees since they were the only ones subjected to cross-
examination.5 Thus -
x x x (T)he labor arbiter conducted clarificatory hearings to ferret out the truth between the opposing claims
of the parties thereto. He did not submit the case based on position papers and their accompanying
documentary evidence as a full-blown trial was imperative to establish the parties' claims. As their allegations
were poles apart, it was necessary to give them ample opportunity to rebut each other's statements through
cross-examination. In fact, private respondents Ladica, Quelling and Nieto were subjected to rigid cross-
examination by petitioner's counsel. However, the testimonies of private respondents Romero, Espina, and
Bantolino were not subjected to cross-examination, as should have been the case, and no explanation was
offered by them or by the labor arbiter as to why this was dispensed with. Since they were represented by
counsel, the latter should have taken steps so as not to squander their testimonies. But nothing was done by
their counsel to that effect.6
Petitioners now pray for relief from the adverse Decision of the Court of Appeals; that, instead, the favorable
judgment of the NLRC be reinstated.
In essence, petitioners argue that the Court of Appeals should not have given weight to respondent's claim of failure to
cross-examine them. They insist that, unlike regular courts, labor cases are decided based merely on the parties'
position papers and affidavits in support of their allegations and subsequent pleadings that may be filed thereto. As
such, according to petitioners, the Rules of Court should not be strictly applied in this case specifically by putting
them on the witness stand to be cross-examined because the NLRC has its own rules of procedure which were applied
by the Labor Arbiter in coming up with a decision in their favor.
In its disavowal of liability, respondent commented that since the other alleged affiants were not presented in court to
affirm their statements, much less to be cross-examined, their affidavits should, as the Court of Appeals rightly held,
be stricken off the records for being self-serving, hearsay and inadmissible in evidence. With respect to Nestor
Romero, respondent points out that he should not have been impleaded in the instant petition since he already
voluntarily executed a Compromise Agreement, Waiver and Quitclaim in consideration of P450,000.00. Finally,
respondent argues that the instant petition should be dismissed in view of the failure of petitioners 7 to sign the petition
as well as the verification and certification of non-forum shopping, in clear violation of the principle laid down
in Loquias v. Office of the Ombudsman.8
The crux of the controversy revolves around the propriety of giving evidentiary value to the affidavits despite the
failure of the affiants to affirm their contents and undergo the test of cross-examination.
The petition is impressed with merit. The issue confronting the Court is not without precedent in jurisprudence. The
oft-cited case of Rabago v. NLRC9 squarely grapples a similar challenge involving the propriety of the use of
affidavits without the presentation of affiants for cross-examination. In that case, we held that "the argument that the
affidavit is hearsay because the affiants were not presented for cross-examination is not persuasive because the rules
of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where decisions may
be reached on the basis of position papers only."
In Rase v. NLRC,10 this Court likewise sidelined a similar challenge when it ruled that it was not necessary for the
affiants to appear and testify and be cross-examined by counsel for the adverse party. To require otherwise would be to
negate the rationale and purpose of the summary nature of the proceedings mandated by the Rules and to make
mandatory the application of the technical rules of evidence.
Southern Cotabato Dev. and Construction Co. v. NLRC 11 succinctly states that under Art. 221 of the Labor Code, the
rules of evidence prevailing in courts of law do not control proceedings before the Labor Arbiter and the NLRC.
Further, it notes that the Labor Arbiter and the NLRC are authorized to adopt reasonable means to ascertain the facts
in each case speedily and objectively and without regard to technicalities of law and procedure, all in the interest of
due process. We find no compelling reason to deviate therefrom.
To reiterate, administrative bodies like the NLRC are not bound by the technical niceties of law and procedure and the
rules obtaining in courts of law. Indeed, the Revised Rules of Court and prevailing jurisprudence may be given only
stringent application, i.e., by analogy or in a suppletory character and effect. The submission by respondent,
citing People v. Sorrel,12 that an affidavit not testified to in a trial, is mere hearsay evidence and has no real
evidentiary value, cannot find relevance in the present case considering that a criminal prosecution requires a quantum
of evidence different from that of an administrative proceeding. Under the Rules of the Commission, the Labor
Arbiter is given the discretion to determine the necessity of a formal trial or hearing. Hence, trial-type hearings are not
even required as the cases may be decided based on verified position papers, with supporting documents and their
affidavits.
As to whether petitioner Nestor Romero should be properly impleaded in the instant case, we only need to follow the
doctrinal guidance set by Periquet v. NLRC13 which outlines the parameters for valid compromise agreements,
waivers and quitclaims -
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered
into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will
step in to annul the questionable transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a valid and binding undertaking.
In closely examining the subject agreements, we find that on their face the Compromise Agreement14 and Release,
Waiver and Quitclaim15 are devoid of any palpable inequity as the terms of settlement therein are fair and just.
Neither can we glean from the records any attempt by the parties to renege on their contractual agreements, or to
disavow or disown their due execution. Consequently, the same must be recognized as valid and binding transactions
and, accordingly, the instant case should be dismissed and finally terminated insofar as concerns petitioner Nestor
Romero.
We cannot likewise accommodate respondent's contention that the failure of all the petitioners to sign the petition as
well as the Verification and Certification of Non-Forum Shopping in contravention of Sec. 5, Rule 7, of the Rules of
Court will cause the dismissal of the present appeal. While the Loquias case requires the strict observance of the
Rules, it however provides an escape hatch for the transgressor to avoid the harsh consequences of non-observance.
Thus -
x x x x We find that substantial compliance will not suffice in a matter involving strict observance of the
rules. The attestation contained in the certification on non-forum shopping requires personal knowledge by
the party who executed the same. Petitioners must show reasonable cause for failure to personally sign the
certification. Utter disregard of the rules cannot justly be rationalized by harking on the policy of liberal
construction (underscoring supplied).
In their Ex Parte Motion to Litigate as Pauper Litigants, petitioners made a request for a fifteen (15)-day
extension, i.e., from 24 April 2002 to 8 May 2002, within which to file their petition for review in view of the
absence of a counsel to represent them. 16 The records also reveal that it was only on 10 July 2002 that Atty.
Arnold Cacho, through the UST Legal Aid Clinic, made his formal entry of appearance as counsel for herein
petitioners. Clearly, at the time the instant petition was filed on 7 May 2002 petitioners were not yet
represented by counsel. Surely, petitioners who are non-lawyers could not be faulted for the procedural lapse
since they could not be expected to be conversant with the nuances of the law, much less knowledgeable with
 the esoteric technicalities of procedure. For this reason alone, the procedural infirmity in the filing of the
present petition may be overlooked and should not be taken against petitioners.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is REVERSED and SET
ASIDE and the decision of the NLRC dated 30 March 2001 which affirmed in toto the decision of the Labor Arbiter
dated 29 May 1998 ordering respondent Coca-Cola Bottlers Phils., Inc., to reinstate Prudencio Bantolino, Nilo Espina,
Eddie Ladica, Arman Queling, Rolando Nieto, Ricardo Bartolome, Eluver Garcia, Eduardo Garcia and Nelson
Manalastas to their former positions as regular employees, and to pay them their full back wages, with the exception
of Prudencio Bantolino whose back wages are yet to be computed upon proof of his dismissal, is REINSTATED,
with the MODIFICATION that herein petition is DENIED insofar as it concerns Nestor Romero who entered into a
valid and binding Compromise Agreement and Release, Waiver and Quitclaim with respondent company.
SO ORDERED.

G.R. No. 87530 June 13, 1990

GERONIMO SADOL, petitioner,
vs.
PILIPINAS KAO, INC., REQUITO VEGA, BELEN GOMEZ, ARTURO GOMEZ & NLRC SECOND
DIVISION, respondents.
Oliver A. Luproso for petitioner.
Cayetano W. Paderanga for private respondent.

GANCAYCO, J.:
The issue posed in this case is whether or not a party who failed to appeal from a decision of the labor arbiter to the National Labor Relations Commission (NLRC) within the ten
(10) day reglementary period can still participate in a separate appeal timely interposed by the adverse party by filing a motion for reconsideration of a decision of the NLRC on
such appeal.

Petitioner was recruited as a laborer by private respondents Requito Vega, Antonio Gomez and Belen Gomez, who are
the owners of Vega & Co., a private recruitment agency, with assignment at respondent Pilipinas Kao, Inc. (PKI for
brevity), particularly at the Pit Burning area. Sometime on April 16, 1984, he was allegedly summarily dismissed.
Hence, on July 24, 1986, he filed a complaint for reinstatement and backwages with Region X of the Department of
Labor and Employment in Cagayan de Oro City.
On November 13, 1986, the labor arbiter ordered all parties to submit their position papers. Only petitioner complied.
On December 17, 1986, petitioner filed an urgent motion that the failure of respondent to file their position papers is a
waiver and so judgment should be rendered in favor of petitioner. Similar motions were filed by petitioner on January
23, 1987 and May 15, 1987.
On June 26, 1987, the labor arbiter rendered a decision ordering private respondents to jointly and solidarity pay
petitioner his separation pay computed at one month for every year of service within the reglementary period.
Petitioner appealed to the NLRC. Said respondents also appealed but it was filed out of time.
On August 26, 1988, the Second Division of the NLRC promulgated a decision modifying the appealed decision in
that respondent PKI was ordered to reinstate petitioner to his former position without loss of seniority rights and other
accrued benefits and with full backwages from the time of dismissal up to his actual reinstatement, and in case
reinstatement is impossible, payment of full backwages and separation pay of one (1) month salary for every year of
service. The appeal of respondent Pig was dismissed for having been filed out of time.
The PKI allegedly received a copy of the decision of the NLRC only on September 13, 1988. A motion for
reconsideration of said decision dated September 22, 1988 was filed by said respondent and a similar motion was filed
by Samahang Kabuhayan ng Barangay Luz Banzon (SKLB for brevity) to which an opposition was filed by petitioner.
On September 30, 1988, a resolution was promulgated by the same division of the NLRC, setting aside its decision
and dismissing the case for lack of merit. A motion for reconsideration thereof filed by petitioner who besides
questioning its findings of facts raised the issue that said respondent's appeal having been filed out of time its motion
for reconsideration of the decision should not have been entertained as it raised issues for the first on appeal which
were not raised before the labor arbiter. This motion was denied on November 27, 1988.
Hence, the herein petition for certiorari wherein petitioner recites the following assignment of errors:
I
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY ERRED IN FINDING
THAT RESPONDENTS REQUITO VEGA, ARTURO GOMEZ AND BELEN GOMEZ IS A
LAWFUL INDEPENDENT LABOR CONTRACTOR;
II
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY ERRED IN FINDING IN
ITS RESOLUTION THAT COMPLAINANT-APPELLANT VOLUNTARILY ABANDONED HIS
JOB;
III
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY ERRED AND/OR
COMMITTED GRAVE ABUSE OF DISCRETION IN GIVING DUE COURSE AND/OR
ENTERTAINING THE MOTION FOR RECONSIDERATION FILED BY RESPONDENT-
APPELLANTS AND REVERSING ITS OWN DECISION/RESOLUTION DATED AUGUST 26,
1988;
IV
THE HONORABLE COMMISSION, SECOND DIVISION, SERIOUSLY ERRED IN FAILING TO
GIVE DUE CONSIDERATION OF COMPLAINANT-APPELLANT'S OPPOSITION TO MOTION
FOR RECONSIDERATION DATED SEPTEMBER 27, 1988. 1
The third and fourth assignment of errors shall first be resolved.
There is no question that private respondents failed to file a timely appeal from the derision of the labor arbiter while
the petitioner was able to interpose his appeal within the reglementary period. It is also an accepted postulate that
issues not raised in the lower court or the labor arbiter may not be raised for the first time on appeal.
Note is taken of the fact that even the Solicitor General refused to represent the NLRC in this proceeding as it shares
the view of petitioner that the decision of the labor arbiter having become final by the failure to respondent PKI to
appeal on time the NLRC may no longer amend, modify, much less set aside the same. 2
This posture is correct insofar as respondent PKI is concerned. However, as petitioner had filed a timely appeal the
NLRC had jurisdiction to give due se to his appeal and render the decision of August 28, 1988, a copy of which was
furnished respondents. Having lost the right to appeal can respondent PKI file a motion for reconsideration of said
decision? The Court resolves the question in the affirmative. The rules of technicality must yield to the broader
interest of justice. It is only by giving due course to the motion for reconsideration that was timely filed that the
NLRC may be able, to equitably evaluate the conflicting versions of facts presented by the parties.
In the now questioned resolution of the NLRC dated September 30,1988, the following findings and conclusions were
made:
Respondent SKLB assails the finding of the Commission that it is engaged in labor-only contracting.
In support thereof, respondent submitted a Clearance Certificate issued by the Department of Labor
and Employment, Regional Office No. 10 situated in Cagayan de Oro City, certifying to its being
cleared for issuance of a permit as a labor contractor. It also submitted payrolls showing that it indeed
operated as such independent labor contractor in accordance with Article 106 of the Labor Code.
Attached to respondent SKLB's motion likewise is the joint affidavit of one Mario T. Ecarnum and
Benito U. Ecarnum who jointly stated that they were neighbors and co- workers of the complainant in
the pit burning area, in a work contracted by aforesaid respondent with respondent Pilipinas Kao,
Inc.; that complainant abandoned his work starting April 19,1984 when he went to Manila to apply
for work abroad and it wall only about eight (8) months later that he returned when he failed to
secure an overseas employment; that complainant's prolonged absence was without prior permission
or leave of absence.
 Respondent SKLB further contends that it meets all requirements set by law and jurisprudence
pertaining to an independent labor contractor, citing the case of Vda. de Eustaquio vs. Workmen's
Compensation Commission, 97 SCRA 255, thus:
An independent contractor is one who, in rendering services, exercise an
independent employment or occupation and represents the will of his employer only
as to the results of his work; and who is engaged to perform a certain service to
another according to his own manner and methods, free from control and direction
of his employer in all matters connected with the performance of the service, except
as to the result of the work.
To further buttress respondent SKLB's claim of being an independent labor contractor and employer
of complainant, it submitted a copy of a Memorandum dated April 21, 1984 sent to complainant
requiring the latter to report to its office immediately otherwise he would be deemed to have
abandoned his work.
It does strike Us as odd that if indeed complainant was dismissed sometime in April 1984 it took him
almost three (3) years before filing the instant case for illegal dismissal . This circumstance adds a
significant dimension to respondent's position that indeed complainant abandoned his job to look for
greener pastures and it was only when he failed to find such opportunity that he came back to
demand that he be allowed to resume the employment which he unceremoniously abandoned.
All the foregoing undisputed taken together, preponderate in favor of respondent SKLB's claim of
being a lawful independent labor contractor which employed complainant who unjustifiably
abandoned his employment.
WHEREFORE, the derision sought to be reconsidered is hereby SET ASIDE and a new one entered,
dismissing the case for lack of merit. 3
The factual findings of the NLRC are conclusive on this Court because the same appear to be supported by substantial
evidence.
WHEREFORE, the petition is DISMISSED for lack of merit. No costs.
SO ORDERED.