VDA FISH BROKER AND/OR VENERANDO ALONZO, PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, RUPERTO BULA AND VIRGILIO SALAC, RESPONDENTS.

The ruling of public respondent National Labor Relations Commission (NLRC) that
“[t]he resolution of a corollary issue
in a case does not constitute res judicata to a subsequent case involving the same question of employer-employee relationship,”^[1] is
disputed by the petitioner and the Office of the Solicitor General (OSG).

Petitioner VDA Fish Broker (VDA), a duly licensed fish broker, owned, operated and
represented herein by petitioner Venerando D. Alonzo, is in the business of
selling fish. It engaged the services
of private respondents Ruperto Bula and Virgilio Salac, among Others, as batilyos “to arrange the fish in the bañera x x x (including) emptying or filling the
bañera or pulling or dragging the bañeras in or
out of the designated area.”^[2]

On 14 May 1982, a complaint for non-payment of service incentive
leave pay, emergency cost of living allowance, thirteenth month pay, legal
holiday and premium pay for rest day and holiday was filed against VDA, and
Venerando and Corazon Alonzo by Samahan
ng Nagkakaisang Batilyo-NFL represented by its local president and
herein respondent Ruperto Bula. Respondent Virgilio Salac also signed the complaint, subsequently
docketed as Case No. NLRC-NCR-5-3832-82.

On 26 May 1983, Labor Arbiter Porfirio E. Villanueva dismissed
the case for lack of merit. He ruled
that there was no employer-employee relationship between VDA and the batilyos as the latter did their tasks –

“x x x in their own
way so that they could earn more, as a matter of fact, a batilyo could earn
from P60.00 to P150.00 a day for two to four hours work. They are paid by the results according to
the number of bañeras they have completed. Fish brokers have no control and supervision
over the batilyos. After
completing their job for two or four hours they could abandon the fish brokers
and transfer to another fish broker. They don’t observe any regular working hours nor (do) they accomplish any
time record x x x x”^[3]

The Labor Arbiter discarded the alleged written agreement of 20
March 1975 between Samahan ng
Nagkakaisang Batilyo-NFL and
the Fish Brokers Association of the Philippines which recognized the existence
of direct employer-employee relationship between fish brokers and batilyos because it did not appear that VDA was a signatory therein. No
appeal was taken from this decision.

Claiming that they were terminated from the service by VDA on or about 1 January 1984, Salac and
Bula filed separate complaints against VDA and/or Venerando Alonzo for illegal
dismissal and for recovery of moral and exemplary damages docketed as Case Nos.
NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84.

On 28 August 1984, Labor Arbiter Adelaido F. Martinez dismissed
the complaints on the ground that there was no employer-employee relationship
between the opposing parties. He took
note of the earlier decision in Case No. NLRC-NCR-5-3832-82 but nonetheless
made his own finding that Salac and Bula –

“x x x are independent contractors and they are not, as such,
laborers or employees of the respondents (VDA). They undertake to do a piece of work for their own account, under
their own responsibility and with minimum interference on the part of the
respondents x x x x They offer their services to the other fish brokers,
dealers, catchers and the general public and are paid only when they render
service. They are without any
employer.”^[4]

This decision was appealed to the NLRC. On 8 August 1986, the NLRC reversed the decision of the Labor
Arbiter, directed VDA and Alonzo to reinstate Salac and Bula to their former
positions without loss of seniority
rights and privileges, and to pay their back
wages from 1 January 1984 until actual reinstatement.

On 17 October 1986, this petition for certiorari,
prohibition and mandamus with prayer for the issuance of a restraining
order was filed seeking reversal of the decision of the NLRC primarily on the
ground that a previous case ruling that no employment relationship existed between
the private parties constituted a bar to the present suit. On 27 October 1986, we issued a temporary
restraining order enjoining respondents from taking further action on the
assailed decision.^[5]

In its comment, the OSG subscribed to the res judicata theory of petitioner. Consequently, the NLRC had to file its own
comment sustaining its assailed decision. Private respondents did
not submit any comment.

We have several times applied the concept of res judicata to administrative decisions. In San Luis v. Court of Appeals,^[6] through Mme. Justice Irene R. Cortes,
we made the following pronouncement:

“x x x x It is
well-established in our jurisprudence that the decisions and orders of
administrative agencies, rendered pursuant to their quasi-judicial authority,
have upon their finality, the force and binding effect of a final judgment
within the purview of the doctrine of res
judicata (Brillantes
v. Castro, 99 Phil. 497 [1956], Ipekdjian Merchandising Co., Inc. v. Court of
Tax Appeals, G.R. No. L-15430, September 30, 1963, 9 SCRA 72.) The rule of res judicata which forbids the reopening of a matter once judicially
determined by competent authority applies as well to the judicial and
quasi-judicial acts of public, executive or administrative officers and boards
acting within their jurisdiction as to the judgments of courts having general
judicial powers (Brillantes v. Castro, supra at 503).

Indeed, the principle of conclusiveness of prior adjudications is
not confined in its operation to the judgments of what are ordinarily known as
courts, but it extends to all bodies upon whom judicial powers had been
conferred. Hence, whenever any board,
tribunal or person is by law vested with authority to judicially determine a question
x x x such determination, when it has become final, is as conclusive between
the same parties litigating for the same cause as though the adjudication had
been made by a court of general jurisdiction (Ipekdjian Merchandising Co., Inc.
v. Court of Tax Appeals, supra at 76).”

The NLRC however claims that res judicata cannot
be applied here because the causes of action and issues in the two cases are different. For while it is true that
the earlier case, Case No. NLRC-NCR-5-3832-82, pertains to non-payment of
service incentive leave pay, emergency cost of living allowance, thirteenth
month pay, legal holiday and premium pay for rest day and holiday, and the
later case, Case Nos. NLRC-NRC-1-153-84 and NLRC-NCR-1-169-84, is for illegal
dismissal and for moral and exemplary damages, nonetheless, we find that the
issue of employer-employee relationship is crucial in the determination of the
rights of the parties in both cases. Moreover, it is erroneous to suggest that res judicata applies only where there are similar causes of action. In Nabus
v. Court of Appeals,^[7] we stated:

“The principle of res judicata actually embraces two
different concepts: (1) bar by former
judgment and (2) conclusiveness of judgment. There is ‘bar by former judgment’ when, between the first case where the
judgment was rendered, and the second case where such judgment is invoked,
there is identity of parties, subject matter and cause of action. When the three identities are present, the
judgment on the merits rendered in the first constitutes as absolute bar to the
subsequent action. It is final as to
the claim or demand in controversy, including the parties and those in privity
with them, not only as to every matter which was offered and received to
sustain or defeat the claim or demand, but as to any other admissible matter
which might have been offered for that purpose. But where between the first case wherein judgment is rendered and
the second case wherein such judgment is invoked, there is identity of parties,
but there is no identity of cause of action, the judgment is conclusive in the
second case, only as to those matters actually and directly controverted and
determined, and not as to matters merely involved therein. This is what is termed conclusiveness of the
judgment (Viray, etc. vs. Marinas, etc., et al. 49 SCRA 44 [1973]).”

American jurisprudence on the matter,^[8]
although merely persuasive, is even more categorical:

“An administrative determination may also operate by way of
collateral estoppel (or res judicata in a limited sense) in a subsequent
proceeding in regard to the parties to a prior proceeding and as to matters
actually and legally determined therein (Farm Invest Co. v Carpenter, 9 Wyo
110, 61 P 258 x x x x). Where the
underlying issue in two proceedings is the same, the adjudication of the issue
in the first proceeding is determinative of the same issue in the second
(United States v Willard Tablet Co. [CA 7 Ind] 141 F2d 141, 152 ALR 1194 [where
remedies sought by government in two proceedings were different, the first
before the Federal Trade Commission and the second before a court, the
identical issue of falsity of labeling was involved in each]. See also Federal Trade Com. v Morton Salt
Co. 334 US 37, 92 L ed 1196, 68 S Ct 822, 1 ALR 2d 260). An issue of fact litigated and determined by
an administrative decision, and essential to the decision, is conclusive
between the parties in a subsequent action, even though a different claim is
involved (See People v Western Airlines, Inc. 42 Cal 2d 621, 268 P2d 723, app
dismd 348 US 859, 99 L ed 677, 75 S Ct 87. In an action at law, a party is estopped to deny the truth of a finding
which was essential to the administrative determination, and may not offer
evidence to show that the determination was not justified as a matter of law
Lumbermen’s Mut. Casualty Co. v Bissell, 220 Mich 352, 190 NW 283, 28 ALR
874. As to matters of fact within the
scope of the authority of the officers of the Land Department of the United
States, their findings must be taken as conclusive in the absence of fraud and
mistake, upon the principle of estoppel by former adjudication Whitehill v
Victorio Land & Cattle Co. 18 NM 520, 139 P 184).”

It is undisputed that the factual issue of the existence of
employer-employee relationship has been determined with finality in the earlier
case of Case No. NLRC-NCR-5-3832-82, hence, that same finding should have been
deemed conclusive in Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84. Were we to ignore the principle of res judicata, an absurd situation would arise where the same
administrative agency would have diametrically opposed conclusions based on
apparently similar circumstances. The
effect may even be more farcical in the sense that private respondents are
given dual or conditional status, i.e., they are employees for the purpose of
reinstatement, but independent contractors for purposes of entitlement to
service incentive leave pay, etc.

This is the dilemma the principle of res judicata seeks to avoid. Both
private parties have already submitted the question of the existence of
employer-employee relationship before the Labor Arbiter in Case No.
NLRC-NCR-5-3832-82 which, incidentally, private respondents have allowed to
become final by not appealing from it; consequently, they are precluded from
disputing the same findings a second time. We thus rule that the administrative finding on the merit of the absence
of employer-employee relationship between petitioner and private respondents in
Case No. NLRC-NCR-5-3832-82, absent any showing of change in the circumstances
of the parties, or that the decision in Case No. NLRC-NCR-5-3832-82 has been
reversed or vacated, is conclusive upon Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84. This being so, Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84 should have been
dismissed.

Petitioner also disputes the ruling of the NLRC sustaining
private respondents’ argument that “since the complainants (herein private
respondents) are bona fide members
of Samahang Nagkakaisang Batilyos-NFL, certified as the sole and exclusive
bargaining representative of the rank-and-file employees in VDA RC3 Fish Broker
per Order of 10 August 1982 in Case No. NCR-LRD-M-4-143-82, the issue of their
status as employees of respondent (herein petitioner) is rendered moot and
academic.”^[9]
Petitioner argues that no inference of employer-employee relation may be
deduced from this alleged
circumstance because no such relationship actually existed, and neither was
there any order to that effect presented at the hearing.

This is not wholly correct for photocopies of such order were in
the records and attached as annexes to two of private respondents’ pleadings
submitted for the consideration of the Labor Arbiter and the NLRC.^[10]
But the determination in Case No. NCR-LRD-M-4-143-82 (for certification
election) cannot be considered more conclusive as to the existence of
employer-employee relationship than the decision in Case No. NLRC-NCR-5­3832-82 (for money claims).

In the decision of the Labor Arbiter, which was set aside by the
assailed NLRC decision, it was stated:

“We note that the Order in Case NCR-LRD-183-82 relied upon by
complainants was issued on August 10, 1982, while the Decision in case
NLRC-NCR-5-3832-82 relied upon by respondents was promulgated on May 20,
1983. The later pronouncement should
prevail, according to which there is no employer-employee relationship between
respondents and individual complainants.”^[11]

We
have checked the records and found correct the finding of the
Labor Arbiter that the Order in Case No. NCR-LRD-M-4-143-82 was issued on 10
August 1982, while the Order in
Case No. NLRC-NCR-5-3832-82 was promulgated
on 20 May 1983. Yet the NLRC,
without showing how or why,
casually concluded that Case No. NCR-LRD-M-4-143-82 is “the later case” which
“put to rest the latter’s
(herein private respondents’) status as
employees.”^[12] NLRC
justified its disregard of the findings of the Labor Arbiter in Case No.
NLRC-NCR-5­3832-82 on the basis that the matter of employer-employee relation
was allegedly only a corollary issue therein.

We do not subscribe to this observation considering that the
certification order in Case No. NCR-LRD-M-4-143-82 was a poor basis for
concluding the existence of employer-employee relation not only because there
was no categorical statement thereon but also
because there was no finding of facts on which a determination of
employment relation could be based.

As regards the decision of the Labor Arbiter to ignore the
earlier Order in Case No. NCR-LRD-M-4-143-82,
the general rule is that, as
between prior conflicting judgments involving the same parties or their privies, the last in point of
time is controlling (Perkins v Benguet Consol. Min. Co. 55 Cal App 2d 720 x x x
x). In such case, it is the later, and
not the earlier, judgment that is operative as res judicata (California
Bank v Traeger, 215 Cal 346 x x x x). The rule is where in two successive actions between the same parties inconsistent judgments are
rendered, the judgment in the second action is controlling in a third action
between the parties.^[13]

While the foregoing may already be sufficient to warrant reversal
of the assailed decision and to grant the writ prayed for in the petition, a
discussion on the application of the ruling in RJL Martinez Fishing
Corporation v. NLRC^[14] is
in order to correct any misimpression thereon.

The statement in RJL Martinez Fishing Corporation v. NLRC
that “the continuity of employment is not the determining factor, but rather, whether the work of the laborer
is part of the regular business or occupation of the employer,”^[15]
citing Art. 281 (now 280) of the Labor Code and Philippine Fishing Boat
Officers and Engineers Union v. CIR,^[16] does
not mean that the essential elements of employer-employee relationship are done
away with. The statement simply means that
where the elements are present, the existence of employer-employee relationship
is not affected by the fact that the work is seasonal or intermittent or in the
meantime suspended. Otherwise, agents
and independent contractors, e.g., playing bands in bars, would be comprehended
whenever their services are said to be necessary to the business of one who
engages or hires them. Moreover, in
view of the unreversed finding of the Arbiter that the control requirement was
wanting in this case, there is no occasion to apply the ruling in RJL
Martinez Fishing Corporation v. NLRC.

There obviously being grave abuse of discretion, the assailed decision of respondent
NLRC must be set aside.

WHEREFORE, the petition for issuance of a writ of certiorari
is granted and the assailed decision of respondent National Labor Relations
Commission of 8 August 1986 is SET ASIDE. The decision of Labor Arbiter Adelaido F. Martinez dated 28 August 1984
in Case Nos. NLRC-NCR-1-153-84 and NLRC-NCR-1-169-84 is REINSTATED and
AFFIRMED. The restraining order we
issued on 27 October 1986 is made permanents.

SO ORDERED.

Cruz, (Chairman), Davide, Jr., and
Quiason, JJ., concur.

^[1]
Decision, NLRC Case Nos. NCR-1-153-84
and NCR-1-169-84, 8 August 1986, p. 3; Rollo, p. 22.

^[2]
Decision, Case No. NLRC-NCR-5-3832-82, p. 2; Rollo, p. 30.

^[3]
Id., p. 6; Id., p. 34.

^[4]
Decision, Case Nos. NLRC-NCR-1-153-184 and NLRC-NCR-1-169-84, p.4, Rollo,
p. 27.

^[5]
Rollo, pp. 48-50.

^[6]
G.R. No. 80160, 26 June 1989; 174 SCRA 258, 271-272.

^[7]
G.R. No. 91670, 7 February 1991; 193 SCRA 732, 739-740.

^[8]
2 Am Jur 2d, p. 314.

^[9]
Decision, NLRC Case Nos. NCR-1-153-84/NCR-1-169-84, p. 2; Rollo, p. 21.

^[10]
It was Annex “A” to Complainants’ Answer with Motion to Resolve the Case to Respondents’ Manifestation With Motion.

^[11]
Rollo, p. 27.

^[12]
NLRC Case Nos. NCR-1-153-84 and
NCR-1-169-84, p. 3; Rollo, p.
22.

^[13]
46 Am Jur 2d, pp. 637-638, citing
American Law Institute Restatement.

^[14]
G.R. Nos. 63550-51, 31 January 1984; 127
SCRA 454.

^[15]
Id., p. 460.

^[16]
No. L-30592, 25 February 1982; 112 SCRA
159.