HAWAIIAN-PHILIPPINE COMPANY, PETITIONER, VS. REYNALDO J. GULMATICO, LABOR ARBITER, REGIONAL ARBITRATION BRANCH NO. VI, AND NATIONAL FEDERATION OF SUGAR WORKERS-FOOD AND GENERAL …

This petition for certiorari
and prohibition with preliminary injunction seeks to annul the Order dated June
29, 1992 issued by public respondent Labor Arbiter Reynaldo J. Gulmatico denying petitioner’s motion to dismiss respondents’ complaint
for “Claims on R.A. 809” in RAB VI Case No. 06-07-10256-89, the
dispositive portion of which reads, in part:

“WHEREFORE, premises considered, the motion to dismiss dated
July 31, 1989 and the supplement thereto dated September 19, 1989 filed by
respondent company together with the motion to dismiss filed by respondent
Ramon Jison dated August 27, 1990 and Francisco Jison dated September 20, 1990,
respectively, are hereby DENIED.

xxx                              xxx                                   xxx”
(Rollo, p. 59)

The antecedent facts are
as follows:

On July 4, 1989,
respondent union, the National Federation of Sugar Workers-Food and General Trades (NFSW­-FGT) filed
RAB VI Case No. 06-07-10256-89 against herein petitioner Hawaiian-Philippine
Company for claims under Republic Act 809 (The Sugar Act of 1952). Respondent union claimed that the sugar farm
workers within petitioner’s milling district have never availed of the benefits
due them under the law.

Under Section 9 of R.A.
809, otherwise known as the Sugar Act of 1952, it is provided, to wit:

“Sec. 9. In addition
to the benefits granted by the Minimum Wage Law, the proceeds of any increase
in participation granted to planters under this Act and above their present share shall be
divided between the planter and his laborers in the following proportions;

“Sixty per centum of the increase participation for the
laborers and forty per centum for the planters. The distribution of the share corresponding to the laborers shall
be made under the supervision of the Department of Labor.

“x                                  x                                         x”
(Emphasis supplied.)

On July 31, 1989, petitioner filed a “Motion to
Dismiss,” followed by a “Supplemental Motion to Dismiss” on
September 19, 1989. Petitioner
contended that public respondent Labor Arbiter has no jurisdiction to entertain
and resolve the case, and that respondent union has no cause of action against
petitioner.

On August 23, 1989, respondent union filed an “Opposition to
Motion to Dismiss.”

On October 3, 1989, petitioner filed a “Reply to
Opposition” followed by a “Citation of Authorities in Support of
Motion to Dismiss.”

On December 20, 1989, respondent union filed an amended
complaint, additionally impleading as complainants Efren Elaco, Bienvenido
Gulmatico, Alberto Amacio, Narciso Vasquez, Mario Casociano and all the other
farm workers of the sugar planters milling with petitioner from 1979 up to the present, and as respondents, Jose
Maria Regalado, Ramon Jison, Rolly Hernaez, Rodolfo Gamboa, Francisco Jison and
all other sugar planters milling their canes with petitioner from 1979 up to
the present.

On August 27, 1990, Ramon Jison, one of the respondents impleaded
in the amended complaint, filed a “Motion to Dismiss and/or to Include
Necessary Parties,” praying for the inclusion as co-respondents of the
Asociacion de Hacenderos de Silan-Saravia, Inc. and the Associate Planters of
Silay-Saravia, Inc.

On June 29, 1992, public respondent promulgated the assailed Order
denying petitioner’s Motion to Dismiss and Supplemental Motion to Dismiss.

Hence, this petition filed by Hawaiian-Philippine Company.

Petitioner reasserts the two issues earlier raised in its Motion
to Dismiss which public respondent unfavorably resolved in the assailed Order.

These two issues are first, whether public respondent Labor
Arbiter has jurisdiction to hear and decide the case against petitioner; and
second, whether respondent union and/or the farm workers represented by it have
a cause of action against petitioner.

Petitioner contends that the complaint filed against it cannot be
categorized under any of the cases falling within the jurisdiction of the Labor
Arbiter as enumerated in Article 217 of the Labor Code, as amended, considering
that no employer-employee relationship exists between petitioner milling
company and the farm workers represented by respondent union. Article 217 of the Labor Code provides:

“Article 217. Jurisdiction of Labor Arbiters and the Commission. – (a) Except as otherwise
provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:

1.       
Unfair labor practice cases;

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 forms of damages
arising from employer-employee relations;

5.       
Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and lockouts; and

6.       
Except claims for employees’ compensation, social security,
medicare from 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), whether or not accompanied with a claim for
reinstatement.” (Emphasis supplied)

In support of its contention that the Labor Arbiter has no
jurisdiction to hear and decide the case against petitioner, the latter cites
the ruling in San Miguel Corporation vs. NLRC,
161 SCRA 719 [1988], wherein it was held that a
single unifying element runs through the cases and disputes falling under the
jurisdiction of the Labor Arbiter and that is that all the enumerated cases and
disputes arise out of or are in connection with an employer-employee
relationship, or some aspect or incident of such relationship. Likewise, in Federation of Free
Farmers vs. Court of Appeals, 107 SCRA
411 [1981], this Court held that:

“x x x. From the
beginning of the sugar industry, the centrals have never had any privity with
the plantation laborers, since they had their own laborers to take care
of. x x x Nowhere in Republic
Act 809 (the Sugar Act of 1952)
can we find anything that creates any relationship between the laborers of the planters and the centrals. x x
x.”

“x x x Under no principle of law
or equity can we impose on the
central x x x any liability to
the plantation laborers. x x x.” (Emphasis supplied)

On the strength of the aforecited authorities, petitioner
contends that it is not a proper party and has no involvement in the case filed
by respondent union as it is not the employer of the respondent sugar workers.

Furthermore, to bolster its contention, petitioner cites the
Rules and Regulations Implementing RA 809 issued by the then Wage
Administration Service pursuant to the Administrative Order of the Labor
Secretary dated October 1, 1952. Section 1 thereof states:

“Section 1. The payment of the proceeds derived from the sixty
per centum of any increase in the participation due the laborers shall be directly
paid to the individual laborer concerned at
the end of each milling season by his respective planter
under the Supervision of the Secretary
of Labor or his duly authorized representative by means of
payrolls prepared by said planter.” (Emphasis supplied)

In addition, under Letter of Instruction No. 854 dated May 1,
1979, it is provided:

“1. Payment subject to supervision. The workers’ share shall be paid directly by
the planter concerned to the workers or claimants entitled thereto subject to
the supervision of the Minister of Labor or his duly designated representative.”

The responsibility for the payment of the sugar workers’ benefits
under R.A. 809 was categorically ruled upon in the Federation of Free
Farmers case, supra., to wit:

“x x x the matter of paying the
plantation laborers of the respective planters
becomes exclusively the concern of the
planters, the laborers and the Department
of Labor. Under no
principle of law or equity can we
impose on the Central – here VICTORIAS
any liability to the respective plantation
laborers, should any of their respective
planters?employers fail to pay their legal
share. After all, since under
the law it is the Department of Labor which is the office directly called upon
to supervise such payment, it is but reasonable to maintain that if any blame
is to be fixed for the unfortunate situation of the unpaid laborers, the same
should principally be laid on the planters and secondarily on the Department of
Labor, but surely never on the central.

“Whatever liability there exists in
favor of the plantation laborers should
be pinned on the PLANTERS, their respective
employers.” (Emphasis supplied)

On the other hand, public respondent and respondent union
maintain the position that privity exists between petitioner and the sugar
workers. Actually, public respondent,
in resolving petitioner’s Motion to Dismiss, skirted the issue of whether an
employer-employee relationship indeed exists between petitioner milling company
and the sugar workers. He did not
categorically rule thereon but instead relied on the observation that when
petitioner delivered to its planters the quedans representing its share,
petitioner did not first ascertain whether the shares of all the workers or
claimants were fully paid/covered pursuant to LOI No. 854, and that petitioner
did not have the necessary certification from the Department of Labor attesting
to such fact of delivery. In view of
these observations, public respondent subscribed to the possibility that
petitioner may still have a liability vis-a-vis the workers’ share. Consequently, in order that the workers
would not have to litigate their claim separately, which would be tantamount to
tolerating the splitting of a cause of action, public respondent held that
petitioner should still be included in this case as an indispensable party
without which a full determination of this case would not be obtained.

We find for petitioner.

The Solicitor General, in its adverse Comment, correctly agreed
with petitioner’s contention that while the jurisdiction over controversies
involving agricultural workers has been transferred from the Court of Agrarian
Relations to the Labor Arbiters under the Labor Code as amended, the said
transferred jurisdiction is however, not without limitations. The dispute or controversy must still fall
under one of the cases enumerated under Article 217 of the Labor Code, which
cases, as ruled in San Miguel, supra., arise out of or are
in connection with an employer-employee relationship.

In the case at bar, it is clear that there is no
employer-employee relationship between petitioner milling company and
respondent union and/or its members-workers, a fact which, the Solicitor
General notes, public respondent did not dispute or was silent about. Absent the jurisdictional requisite of an
employer-employee relationship between petitioner and private respondent, the
inevitable conclusion is that public respondent is without jurisdiction to hear
and decide the case with respect to petitioner.

Anent the issue of whether respondent union and/or its
members-workers have a cause of action against petitioner, the same must be
resolved in the negative. To have a
cause of action, the claimant must show that he has a legal right and the
respondent a correlative duty in respect thereof, which the latter violated by
some wrongful act or omission (Marquez vs. Varela, 92 Phil. 373 [1952]). In the instant case, a simple reading of
Section 9 of R.A. 809 and Section 1 of LOI 845 as aforequoted, would show that
the payment of the workers’ share is a liability of the planters-employers, and
not of the milling company/sugar central. We thus reiterate Our ruling on this matter, as enunciated in Federation
of Free Farmers, supra., to wit:

“x x x. Nowhere in
Republic Act No. 809 can we find anything that creates any relationship between
the laborers of the planters and the centrals. Under the terms of said Act, the old practice of the centrals issuing
the quedans to the respective PLANTERS for their share of the proceeds of
milled sugar per their milling contracts has not been altered or modified. In other words, the language of
the Act does not in any manner
make the central the insurer on behalf
of the plantation laborers that the latter’s
respective employers-planters would pay them
their share. x x x”

“x x x. Accordingly, the only obligation of the centrals (under
Section 9 of the Act), like VICTORIAS, is to give to the respective planters,
like PLANTERS herein, the planters’ share in the proportion stipulated in the
milling contract which would necessarily include the portion of 60% pertaining
to the laborers. Once this has been
done, the central is already out of the picture x x x” (Emphasis supplied)

In the case at bar, it is undisputed that petitioner milling
company has already distributed to its planters their respective shares. Consequently, petitioner has fulfilled its
part and has nothing more to do with the subsequent distribution by the
planters of the workers’ share.

Public respondent’s contention that petitioner is an
indispensable party is not supported by the applicable provisions of the Rules of
Court. Under Section 7, Rule 3 thereof,
indispensable parties are “parties in interest” without whom no final
determination of the action can be obtained. In this case, petitioner cannot be deemed as a party in interest since
there is no privity or legal obligation linking it to respondent union and/or
its members-workers.

In order to further justify petitioner’s compulsory joinder as a
party to this case, public respondent relies on petitioners’ lack of
certification from the Department of Labor of its delivery of the planters’
shares as evidence of an alleged “conspicuous display of concerted
conspiracy between the respondent sugar central (petitioner) and its adherent
planters to deprive the workers or claimants of their shares in the increase in
participation of the adherent planters.” (Rollo, p. 56)

The assertion is based on factual conclusions which have yet to
be proved. And even assuming for the
sake of argument that public respondent’s conclusions are true, respondent
union’s and/or its workers’ recourse lies with the Secretary of Labor, upon
whom authority is vested under RA 809 to supervise the payment of the workers’
shares. Any act or omission involving
the legal right of the workers to said shares may be acted upon by the Labor
Secretary either motu proprio or at the instance of the
workers. In this case however, no such
action has been brought by the subject workers, thereby raising the presumption
that no actionable violation has been committed.

Public respondent is concerned that the respondent planters may
easily put up the defense that the workers’ share is with petitioner milling
company, giving rise to multiplicity of suits. The Solicitor General correctly postulates that the planters cannot
legally set up the said defense since the payment of the workers’ share is a
direct obligation of the planters to their workers that cannot be shifted to
the miller/central. Furthermore, the
Solicitor General notes that there is nothing in RA 809 which suggests directly
or indirectly that the obligation of the planter to pay the workers’ share is
dependent upon his receipt from the miller of his own share. If indeed the planter did not receive his
just and due share from the miller, he is not without legal remedies to enforce
his rights. The proper recourse against
a reneging miller or central is for the planter to implead the former not as an
indispensable party but as a third party defendant under Section 12, Rule 6 of
the Rules of Court. In such case,
herein petitioner milling company would be a proper third party defendant
because it is directly liable to the planters (the original defendants) for all
or part of the workers’ claim. However,
the planters involved in this controversy have not filed any complaint of such
a nature against petitioner, thereby lending credence to the conclusion that
petitioner has fulfilled its part vis-a-vis its obligation under RA 809.

WHEREFORE, premises considered, the petition is
GRANTED. Public respondent Reynaldo J.
Gulmatico is hereby ORDERED to DISMISS RAB VI Case No. 06-07-10256-89 with
respect to herein petitioner Hawaiian-Philippine Company and to PROCEED WITH
DISPATCH in resolving the said case.

SO ORDERED.

Romero, Melo, and Vitug,
JJ., concur.

Feliciano, J., (Chairman), on
leave.