Case Digest: GSIS v. NLRC, et al.

G.R. No. 180045: November 17, 2010




Respondents were hired DNL Security Agency. By virtue of the service contract entered into by DNL Security and petitioner Government Service Insurance System on May 1, 1978, respondents were assigned to petitioners Tacloban City office, each receiving a monthly income of P1,400.00. Sometime in July 1989, petitioner voluntarily increased respondents monthly salary to P3,000.00.

In February 1993, DNL Security informed respondents that its service contract with petitioner was terminated. This notwithstanding, DNL Security instructed respondents to continue reporting for work to petitioner. Respondents worked as instructed until April 20, 1993, but without receiving their wages; after which, they were terminated from employment.

Respondents filed with the NLRC a complaint against DNL Security and petitioner for illegal dismissal, separation pay, salary differential, 13th month pay, and payment of unpaid salary.

The LA found that respondents were not illegally terminated from employment because the employment of security guards is dependent on the service contract between the security agency and its client. However, considering that respondents had been out of work for a long period, and consonant with the principle of social justice, the LA awarded respondents with separation pay equivalent to one (1) month salary for every year of service, to be paid by DNL Security. Because DNL Security instructed respondents to continue working for petitioner from February 1993 to April 20, 1993, DNL Security was also made to pay respondents wages for the period.

DNL Security filed a motion for reconsideration, while petitioner appealed to the NLRC. NLRC treated DNL Securitys motion for reconsideration as an appeal, but dismissed the same, as it was not legally perfected. It likewise dismissed petitioners appeal, having been filed beyond the reglementary period.

Undaunted, petitioner filed a petition for certiorari under Rule 65 of the Rules of Court before the CA. The CA affirmed the NLRC decision. Petitioner filed a motion for reconsideration but the same was denied. Hence, this petition.
Whether or not the CA erred in ruling that the appeal was not filed on time and in ruling that petitioner GSIS is jointly and severally liable with DNL Security Agency for payment of the unsubstantiated amounts of Salary Differentials


Under Section 3, Rule 13 of the Rules of Court, where the filing of pleadings, appearances, motions, notices, orders, judgments, and all other papers with the court/tribunal is made by registered mail, the date of mailing, as shown by the post office stamp on the envelope or the registry receipt, shall be considered as the date of filing.

Thus, the date of filing is determinable from two sources: from the post office stamp on the envelope or from the registry receipt, either of which may suffice to prove the timeliness of the filing of the pleadings. If the date stamped on one is earlier than the other, the former may be accepted as the date of filing. This presupposes, however, that the envelope or registry receipt and the dates appearing thereon are duly authenticated before the tribunal where they are presented.


In exceptional cases, a belated appeal may be given due course if greater injustice will be visited upon the party should the appeal be denied

In any case, even if the appeal was filed one day late, the same should have been entertained by the NLRC. Indeed, the appeal must be perfected within the statutory or reglementary period. This is not only mandatory, but also jurisdictional. Failure to perfect the appeal on time renders the assailed decision final and executory and deprives the appellate court or body of the legal authority to alter the final judgment, much less entertain the appeal. However, this Court has, time and again, ruled that, in exceptional cases, a belated appeal may be given due course if greater injustice will be visited upon the party should the appeal be denied. The Court has allowed this extraordinary measure even at the expense of sacrificing order and efficiency if only to serve the greater principles of substantial justice and equity.

Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. We have consistently held that technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the working man.

The Court notes, however, that while the CA affirmed the dismissal by the NLRC of petitioners appeal for being filed out of time, it nonetheless delved into the merits of the case. This notwithstanding, we do not entirely agree with the appellate courts conclusion affirming in toto the LA decision.


The fact that there is no actual and direct employer-employee relationship between petitioner and respondents does not absolve the former from liability for the latters monetary claims. When petitioner contracted DNL Securitys services, petitioner became an indirect employer of respondents, pursuant to Article 107 of the Labor Code

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.

After DNL Security failed to pay respondents the correct wages and other monetary benefits, petitioner, as principal, became jointly and severally liable, as provided in Articles 106 and 109 of the Labor Code, which state:
ART. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the formers 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.
ART. 109. Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
Petitioners liability covers the payment of respondent's salary differential and 13th month pay during the time they worked for petitioner. In addition, petitioner is solidarily liable with DNL Security for respondents unpaid wages from February 1993 until April 20, 1993. While it is true that respondents continued working for petitioner after the expiration of their contract, based on the instruction of DNL Security, petitioner did not object to such assignment and allowed respondents to render service. Thus, petitioner impliedly approved the extension of respondents services.

Accordingly, petitioner is bound by the provisions of the Labor Code on indirect employment. Petitioner cannot be allowed to deny its obligation to respondents after it had benefited from their services. So long as the work, task, job, or project has been performed for petitioners benefit or on its behalf, the liability accrues for such services. The principal is made liable to its indirect employees because, after all, it can protect itself from irresponsible contractors by withholding payment of such sums that are due the employees and by paying the employees directly, or by requiring a bond from the contractor or subcontractor for this purpose.

Petitioner's liability, however, cannot extend to the payment of separation pay. An order to pay separation pay is invested with a punitive character, such that an indirect employer should not be made liable without a finding that it had conspired in the illegal dismissal of the employees.

It should be understood, though, that the solidary liability of petitioner does not preclude the application of Article 1217 of the Civil Code on the right of reimbursement from its co-debtor.


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