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JOEB M. ALIVIADO v. PROCTER

FACTS:

This case involves a previous decision that found Promm-Gem, Inc. to be a legitimate independent contractor, while SAPS was considered a labor-only contractor, making its employees deemed as employees of P&G. Both Promm-Gem and SAPS/P&G were found guilty of illegal dismissal, leading to the court ordering the reinstatement of the employees with full backwages and benefits. Additionally, P&G was instructed to pay moral damages and attorney's fees to the dismissed employees. P&G filed a motion for reconsideration, which was subsequently denied by the court. P&G then filed various motions in an attempt to refer the case to the Supreme Court En Banc. The court noted these pleadings and required the petitioners to file their comments, with the petitioners arguing that P&G's motions were frivolous and dilatory. The court emphasized that the entry of judgment was proper since it was issued after P&G received the resolution denying their motion for reconsideration.

In another segment, the case pertains to a decision rendered on March 9, 2010, which has already attained finality. Despite this, P&G filed a second motion for reconsideration, which is prohibited under the Rules of Court. The court clarified that the finality of judgment is determined from the time the parties received the resolution denying the first motion for reconsideration. It emphasized that reckoning the finality of judgment from the denial of the second motion for reconsideration would allow litigants to exploit the system to delay the entry of judgment. The court reiterated the doctrine of finality of judgment, stating that once a judgment becomes final and executory, it can no longer be modified, even to rectify an erroneous conclusion of fact or law. Exceptions to this rule are only allowed for the correction of clerical errors, entries made after due notice, and void judgments.

Finally, the case revolved around a second motion for reconsideration filed by P&G, which is expressly prohibited under Section 2, Rule 52 of the Rules of Court. P&G argued that their second motion should be entertained for the sake of justice. However, the court clarified that a second motion for reconsideration can only be granted by the Court en banc, with a vote of at least two-thirds of its actual membership, and only in cases where the assailed decision is legally erroneous and patently unjust. The court acknowledged that the ruling sought to be reconsidered had already become final per the Entry of Judgment. Despite this, the court decided to discuss the issues raised by P&G to ensure that due process was upheld. One of these issues was whether the court erred in not applying the "four-fold" test, specifically the "control test," in determining SAPS's legitimacy as an independent contractor.

ISSUES:

  1. Whether SAPS is a labor-only contractor.

  2. Whether the issuance of Entry of Judgment on July 27, 2010, was proper.

  3. Whether the March 9, 2010 Decision has attained finality and is therefore immutable.

  4. Whether the Court erred in awarding moral damages and attorney's fees to the dismissed employees of SAPS/P&G.

  5. Whether the assertions that some employees were not assigned to P&G and that reinstatement was not feasible due to the non-existence of positions in P&G’s plantilla and a climate of antagonism are valid.

RULING:

  1. SAPS as a Labor-Only Contractor: The Supreme Court upheld its determination that SAPS is a labor-only contractor based on the lack of substantial capitalization and direct involvement of its workers in the principal business of P&G. Consequently, P&G is considered the employer of SAPS' employees.

  2. Issuance of Entry of Judgment: The issuance of the Entry of Judgment on July 27, 2010, was proper as it was made after P&G received a copy of the Resolution denying its motion for reconsideration.

  3. Finality and Immutability of the Decision: The March 9, 2010 Decision had already attained finality and could no longer be modified. This is based on the principle that a final judgment becomes immutable and can no longer be altered or set aside.

  4. Awards of Moral Damages and Attorney's Fees: The Court found P&G to have dismissed its employees through SAPS in an oppressive manner, justifying the award of moral damages and attorney's fees.

  5. Assertions on Employee Assignment and Reinstatement: The Court found that P&G's assertions regarding the ten employees not having been assigned to P&G and the infeasibility of reinstatement were raised too late and were thus deemed waived. The issues should have been brought up at an earlier stage in the proceedings.

PRINCIPLES:

  1. Labor-Only Contracting: Articles 106 of the Labor Code and Department Order No. 18-02, Rule VIII-A, Book III of the Omnibus Rules Implementing the Labor Code.

  2. Finality and Immutability of Judgments: Once a judgment becomes final and executory, it is generally immutable and unalterable.

  3. Prohibited Pleadings: A second motion for reconsideration is not allowed unless in the higher interest of justice by the Court en banc.

  4. Substantial Capital: Substantial capital is measured against the type of work the contractor performs, and not by a fixed monetary standard.

  5. Due Process: Ensuring that all arguments and evidence are raised at the appropriate stages of litigation for fair adjudication.

  6. Solidary Liability: In cases of labor-only contracting, the principal employer is regarded as the direct employer of the laborers recruited by the contractor and is solidarily liable with the contractor.