Vigilla v. Philippine College of Criminology

The petitioners were janitors and a supervisor in the Maintenance Department of the Philippine College of Criminology (PCCr). They worked under the supervision of Atty. Florante Seril, PCCr's Senior Vice President for Administration. They were told their employer was MBMSI, a janitorial contractor that Seril also headed. In 2008 PCCr discovered that MBMSI's certificate of incorporation had been revoked in 2003. In March 2009, PCCr ended its relationship with MBMSI, and the maintenance personnel were dismissed. They sued MBMSI, Seril, PCCr and its president Bautista for illegal dismissal and money claims. PCCr submitted notarized releases, waivers and quitclaims that the workers had executed in favor of MBMSI in exchange for separation pay. The Labor Arbiter found MBMSI a labor-only contractor and PCCr the real employer, held the dismissals in bad faith, and awarded reinstatement, backwages and damages, without addressing the quitclaims. The NLRC agreed there was labor-only contracting. It held, however, that because liability was solidary under Art. 109, the quitclaims in MBMSI's favor also benefited PCCr under Art. 1217 of the Civil Code. Only then, on reconsideration, did the 17 complainants deny signing them; the NLRC kept the awards of two other complainants only. The Court of Appeals affirmed.

1. 1Whether the petitioners validly executed the releases, waivers and quitclaims, and whether MBMSI could validly enter into them despite the revocation of its certificate of incorporation.
2. 2Whether a labor-only contractor is solidarily liable with the principal, so that quitclaims in favor of the contractor extinguish the principal's liability.

The petition was denied. First, the forgery claim was an afterthought, raised only after the NLRC ruled against the workers. It presented questions of fact, and the petitioners never attached the allegedly forged documents. Notarized documents carry a prima facie presumption of due execution, which bare allegations cannot overcome. The notary's failure to submit a notarial report does not undo the notarization. Seril himself stated that P2,000,000 had been coursed by PCCr to him to be handed to the complainants. Second, the revocation of MBMSI's charter did not invalidate the quitclaims. Under Sections 122 and 145 of the Corporation Code, dissolution does not remove or impair a corporation's liabilities, and liquidation may continue beyond the three-year winding-up period. Third, a labor-only contractor is solidarily liable with the principal. The basis is the last paragraph of Art. 106 of the Labor Code, under which the contractor is considered "merely as an agent of the employer". Section 19 of D.O. No. 18-02 and Section 27 of D.O. No. 18-A (2011) implement it, and so does jurisprudence (PBCom v. NLRC, San Miguel Corp. v. MAERC, 7K Corp. v. NLRC). In labor-only contracting, the principal is solidarily liable for all rightful claims of the employees. In legitimate job contracting, by contrast, its liability is limited to unpaid wages. Because the liability was solidary, the quitclaims in MBMSI's favor redounded to PCCr's benefit under Art. 1217 of the Civil Code ("payment made by one of the solidary debtors extinguishes the obligation"). The workers could not collect the same benefits a second time from PCCr.