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LOTTE PHIL. CO. v. ERLINDA DELA CRUZ

FACTS:

Lotte Phils., Inc. (Lotte), a domestic corporation, hired and assigned the petitioners as repackers or sealers for its confectionery facility. Lotte entered into a contract with 7J Maintenance and Janitorial Services (7J) to provide manpower for maintenance and other services. However, Lotte terminated the services of the petitioners allegedly due to the expiration/termination of the service contract by Lotte with 7J. The petitioners filed a labor complaint against Lotte and 7J for illegal dismissal and other employment benefits. The Labor Arbiter declared 7J as the employer of the petitioners and held it liable for their claims. The National Labor Relations Commission (NLRC) affirmed this ruling. The petitioners filed a petition for certiorari before the Court of Appeals, insisting that Lotte was their direct employer.

ISSUES:

  1. Whether or not 7J is an indispensable party that should have been impleaded in the petition before the Court of Appeals.

  2. Whether or not the petition is dismissible for failure to comply with procedural rules.

RULING:

  1. The Court ruled that 7J is an indispensable party in the case. The Labor Arbiter and the NLRC found 7J to be solely liable as the employer of the petitioners, while the Court of Appeals held Lotte jointly and severally liable with 7J. The non-joinder of an indispensable party is not a ground for dismissal, and the remedy is to implead the non-party. In this case, the petitioners failed to include 7J in their petition before the Court of Appeals, depriving it of jurisdiction over 7J. Therefore, the Court set aside the decision of the Court of Appeals and remanded the case to include 7J as an indispensable party for further proceedings. The Court did not discuss the second issue raised by Lotte.

PRINCIPLES:

  • An indispensable party is a party in interest without whom no final determination can be had of an action and must be joined either as plaintiffs or defendants. The presence of indispensable parties is necessary to vest the court with jurisdiction.

  • The absence of an indispensable party renders all subsequent actions of the court null and void, not only as to the absent parties but even as to those present.

  • The non-joinder of an indispensable party is not a ground for dismissal, and the remedy is to implead the non-party.

  • Parties may be added by the court's order at any stage of the action and/or such times as are just. Failure to implead an indispensable party may result in the dismissal of the complaint/petition.