INTERNATIONAL HARVESTER MACLEOD, INC., PETITIONER, VS. THE NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER ALEX LOPEZ:  WATERFRONT EMPLOYEES UNION, ZACARIAS SILVA, JOSE ARIZA…

This is a Petition for Certiorari with prayer for a writ
of preliminary injunction seeking to annul the Resolutions of the National
Labor Relations Commission (NLRC) in NLRC Case No. 12-4388-84 dated 24 August 1988 and 12 December 1988.

Petitioner International Harvester Macleod Inc.  (IHM) is a ship agent for foreign vessels
which come to the port of Manila.  Respondent Waterfront Employees Union (WEU) is
a union of checkers who are contracted by ship agents to attend to the needs of
incoming vessels.  For several years,
respondent WEU and petitioner had been parties to a number of contracts
denominated as
“Collective Bargaining Agreements”; the last of said
agreements was signed on 1 April 1977 and effective until 31 December 1979.

On 20 December 1984,
herein private respondents WEU and about eighty-nine (89) of its members, led
by its President, filed a complaint for illegal dismissal, separation pay and
13th month pay for 1977, 1978, and 1979, against petitioner IHM.  Individual respondents essentially alleged
therein that from 1950 to 1978, IHM had hired them as checkers at various
rates; that in 1979, they were illegally terminated by IHM and that the Ben
Santos Checkers Agency took over their functions;
that their causes of action accrued only on 2 April 1982 after the Resolution
of the Supreme Court in G.R. No. 57880 entitled “International Harvester
Macleod Inc. vs. Hon. Director of the Bureau of Labor Relations” denying IHM’s petition for certiorari to annul the Order of
said Bureau Director dated 4 June 1981, became final and executory;
that respondents could not have sued for separation pay and other claims then
as the issue of employer-employee relationship between IHM and WEU had yet to
be resolved with definiteness; that the running of the prescriptive period was
interrupted by a demand; and doubts in the application of labor cases should be
construed in favor of labor.

In a decision dated 21
December 1987, Labor Arbiter Alex Lopez held that private
respondents were employees of petitioner IHM and that the latter was liable for
illegal dismissal.

An appeal filed by petitioner IHM was dismissed by the NLRC in a
resolution dated 24 August 1988.

In this Petition for Certiorari, petitioner argues, among
other things, that the ruling of the Bureau of Labor Relations (BLR) had no
direct application to the issue in the instant case, since that BLR ruling
pertained to an entirely different fact situation arising after petitioner had terminated its contract with private respondent
WEU on 31 December 1979 and also after some of the individual private
respondents were already employed by the Ben Santos Checkers Agency beginning 1
January 1980.  Petitioner also contends
that the claims of private respondents have in any case already prescribed,
having been filed 4 years after the alleged illegal dismissal.

To resolve the question before us, we must examine two (2)
previous rulings of this Court.  These
two (2) rulings, which are referred to in the pleadings of the parties herein,
both touched on the issue of existence of an employer-employee relationship
between them.

The first case is G.R. No. 51311. 
This case arose when private respondent Zacarias
Silva, president of WEU, along with several members of said union filed on 11 July 1978, before the Office of
the Regional Director of the then Ministry of Labor and Employment, a case
against petitioner IHM for the alleged non-payment of 13th month pay as
mandated by P.D. No. 851.

On 26 January 1979,
the Regional Director issued an order directing petitioner IHM to pay private
respondents their 13th month pay.  Said
Order, however, was reversed on appeal by then Deputy Minister of Labor Amado Inciong in his Decision dated
2 August 1979.  In that decision, Deputy Minister Inciong held that private respondent WEU was an independent
contractor and the employer of individual complaining checkers.  In his Order Deputy Minister Inciong stated:

“In determining the existence of employer-employee
relationship, the following basic factors should be considered:  the selection and engagement of the employee; the payment of wages; the power of
dismissal; and the power to control the employee’s conduct.

Records reveal that on April 1, 1977, the International Harvester
Shipping Co., Inc., hereinafter referred to as ‘respondent company’ for
brevity, as shipping agents of various foreign ship-owners or shipping
companies and the Waterfront Employees
Union, which for expediency is hereto designated as ‘complainant union,’ entered
into a collective bargaining agreement effective until December 31, 1979.  The agreement stipulates that respondent
company could hire union members who are assigned to it by the complainant
union from the union’s Hiring Hall and without the intervention of
respondent.  In Section 1 of Article III
of the aforementioned agreement, it was likewise agreed that respondent company
may reject any checker carpenter or laborer who is incompetent and unreliable
to discharge his duties.

Individual complainants are members of complainant union who are
designated and assigned by the said union to work as checkers on various
clients’ vessel of respondent
company although the latter does
not own and operate any vessel.  Respondent
company [IHM] does not employ the services of the checkers individually,
neither do these checkers apply for work with respondent.  Respondent company has nothing to do with the
pre-­employment requirements, like the filing of application forms, mental and
physical examination, to determine their aptitude and competence for
employment.

Moreover, respondent company has no control over their
assignments.  The company only
submits to the complainant union through a ‘request slip’ the number of
checkers it requires for an incoming vessel and the latter selects them and
places their names in the ‘assignment slips.’

Under the arrangement the shipowner
clients do not determine the salary paid to the checkers.  The complainant union’s treasurer prepares
the checkers payroll for signature of the incoming vessel’s Master and
First Officer.  Thereafter, the signed
payrolls are presented to respondent company who upon receipt of the funds from
the client shipowner signs in the disbursement
voucher covering the amount of the payrolls.  Finally, the checkers are paid by the
union treasurer.  The only participation
of respondent company in the payment of wages is to deliver the money of
its client shipowner to the union treasurer for
the payment of the checkers.

Respondent company has no power of control and supervision over
the checkers relative to their work. 
They are supervised by an Assistant Head Checker employed by complainant
union.  Although there is a Head
Checker who is respondent company’s employee, nonetheless, he does not
interfere in the supervision over the details of the checker’s work which
properly belongs to the Assistant Head Checker. 
The Head Checker only deals with the Assistant Head Checker giving him
general instruction where or what hatch to check.  Thereafter the Assistant Head Checker
supervises the whole operations.  Actions
involving checker’s reprimand, suspension or dismissal are referred to
complainant union for final decision.

Viewed in the light of the foregoing, the complainant
union is an independent contractor and the employer of the individual
complaining checkers and not the respondents.  What is more, there is no separate individual
contract of employment between said complaining checkers and respondent
company.

Moreover, the existing collective bargaining agreement between
the parties herein is not in the real meaning or true sense the CBA as
contemplated by law, but a
trade agreement delineating the terms and conditions governing the relationship
between the independent contractor and the company and therefore not one
which could be made a basis for concluding the existence of any
employer-employee relationship ties between the members of the complainant
union.  Thus, as aptly pointed out by respondent in
its position paper:

‘Collective bargaining contracts, it has been held, are not
contracts of employment.  Such contracts
while binding the signatories and those whom they represent, are not, as to individual employees or applicants for work,
agreement of hire; such contracts are merely “trade agreement” which
inure to the benefit of individual consequen­tially and only after they are
employed and during tenure.  They do not
create jobs.  Jobs subject to “trade
agreement” are created and terminated by the individual contract between
the parties:  Case & Co. vs.
N.L.R.B., 321, U.S. 332; accord United Office & Professional Workers Union
vs. Monumental Life, Inc. Co. 88 F. Suppl. 602.  In Amalgamated Assn. of Street etc. Railway
Employees vs. Pa. Grehound Lines – (F(2nd) –
Collective bargaining agreements held not to be “employment
agreements” for purpose of actual employment or hiring, but were
“employment agreements” within the meaning of the Federal Arbitration
Act’s exemption of such agreement.’

To hold respondent company as the employer of individual
complaining checkers will result to an ambiguous situation where there will be
multiple employers as there are ship agents for whom they have rendered
services.  To aggravate the situation
the checkers will have the same number of monetary claims for 13th month pay as
there are as many employers.” (Rollo, pp. 37-40;
Order of the Deputy Minister of Labor, pp. 1-4; underscoring supplied)

Private respondents subsequently filed a Petition for Certiorari
with this Court docketed as G.R.
No. 51311 and entitled “Waterfront Employees Union, et al, v. Minister of
Labor, et al.”

On 3 September 1979,
this Court issued a Resolution
which dismissed private respondents’ Petition
for Review.  The Motion for
Reconsideration was denied in a Resolution dated 14 November 1979.

Several cases which also raised the issue of employer-employee relationship between the parties herein were
later filed by private respondents against petitioner but which were eventually
dismissed^[1]
on the ground that G.R. No. 51311 had already held that no employer-employee
relationship existed between private respondents and petitioner.

The second case is G.R. No. 57880.  On 31
December 1979, the so-called “Collective Bargaining
Agreement” between petitioner and private respondent WEU expired.  The petitioner then engaged the services of a checker
agency, the Ben Santos, Jr.’s Checkers Agency
effective 1 January 1980.

On 28 April 1980,
WEU filed before the Department of Labor and Employment a petition for direct
certification as the sole and exclusive bargaining agent of the employees of
petitioner IHM or Ben Santos, Jr.’s Checkers Agency.

On 2 July 1980,
Med-Arbiter Eusebio M. Jimenez issued an Order
ordering the holding of a certification election but at the same time ruling
that the private respondents herein were employees of the Ben Santos, Jr.’s Checkers Agency and not of petitioner herein.  The Med-Arbiter in denying the existence of
employer-employee relationship between private respondents and petitioner
relied upon the resolution of this Court dated 13 September 1979 upholding the decision of then Deputy
Minister Inciong which had declared that private
respondents herein were not employees of petitioner IHM.

On 21 July 1980, private
respondent WEU appealed the Order of Med-Arbiter Jimenez to the BLR.  On 4
June 1981, the BLR issued an Order holding that the private
respondents are employees of petitioner. 
The BLR decision held:

“We find for the appellant. 
The records show that the subject workers/checkers are employees of
International Harvester, Ben Santos Jr. Checkers Agency merely acts as
supplier of the checking requirements of I.H. as embodied in the CBA.  I.H. exercises over these workers the
prerogative to hire, fire or discipline them and supervise their assigned task.  The payment of wages, allowances and other
benefits is an obligation of I.H. as can be gleaned from their agreements.

Finally, this Bureau in a similar case Waterfront Employees Union
(ESC-Local), v. Everett Steamship Corporation, BLR No. A-0198-80, has ruled
that these checkers who are provided to the company through the intervention of
the checkers agency are considered employees of the company.  In the case at bar, the herein workers are being
supplied to the I.H. by Ben Santos Checker’s Agency.  Hence,
the employer-employee relationship exists between the checkers and
I.H. and not with Ben Santos Checker’s Agency.

WHEREFORE, premises considered, the instant appeal is hereby
granted and the Order, appealed from modified such that a certification
election is ordered conducted among the checkers/employees of International
Harvester Mcleod Co., Inc. within 20 days from
receipt hereof.”(Underscoring supplied)

A Petition for Certiorari was later filed by petitioner in
this Court and docketed as G.R. No. 57880 entitled “International
Harvester Macleod Co., Inc. v. Waterfront Employees Union, et al.” which
was, however, dismissed in a resolution dated 21 July 1981.

It is plain to see that the Supreme Court upheld two (2)
seemingly conflicting rulings on the same issue involving the same
parties.  In the case at bar, private
respondents insist that in resolving the issue of existence of an
employer-employee relationship, the Court’s Resolution dated 21 July 1981 in G.R. No. 57880 should
control.  Upon the other hand, petitioner
IHM argues that in the case at bar, it is the Resolution of the Court in G.R.
No. 51311 dated 3 September 1979
which is the applicable decision.

The Court considers, however, that the conflict here is merely
ostensible.  In G.R. No. 51311, the Court
had before it the set of facts which was highlighted by the existence of the
so-called “Collective Bargaining Agreements” between petitioner IHM
and private respondent WEU, existing at least from 1977 and up
to 31 December 1979.  The factual relationships between the parties
during that period were characterized by Deputy Minister Inciong
as a
relationship between owner (IHM) and independent contractor (WEU) after a
careful analysis of that relationship and notwithstanding the erroneous
nomenclature employed in designating the agreement between the two (2) parties
as a “Collective
Bargaining Agreement.” As already noted, the Court affirmed the decision
of Deputy Minister Inciong in its Resolution dated 3 September 1979.

Upon the other hand, in G.R. No. 57880, the factual relationships
between the two (2) parties were quite different.  The factual relationships there involved were
established after the Resolution of the Court in G.R. No. 51311 and after
expiration of the so-called “Collective Bargaining Agreement” between
IHM and WEU and the establishment of the Ben Santos, Jr.’s
Checkers Agency.  Those new and
revised relationships began 1
January 1980.  It is
those relationships which the BLR characterized as involving an
employer-employee relationship between IHM and the individual checkers.  In effect, the BLR held that the Ben Santos, Jr.’s Checkers
Agency had merely acted as a recruitment agency for the benefit of IHM and that
an employer-employee relationship sprang into being between IHM and the
individual checkers recruited through the Ben Santos, Jr.’s
Checkers Agency.

It is thus clear to us that the Resolution dated 3 September 1979 in G.R. No. 51311
still stands, since it was not overruled or set aside by the Resolution of this
Court dated 21 July 1981 in
G.R. No. 57880.  There was, most briefly
put, no conflict between the two (2) Resolutions of this Court.

In the case at bar, it is the set of facts which existed before
the expiration of the so-called “Collective Bargaining Agreement”
between IHM and WEU on 31
December 1979, that is
relevant.  Private respondents herein, in effect,
assert that they were illegally dismissed upon expiration of that agreement and
are claiming separation pay and 13th
month pay for 1977, 1978 and
1979.  During that period, as already
held in G.R. No. 51311 — which ruling is,
of course, res adjudicata
in respect of the case at bar — there was no employer-employee relationship
between the parties herein, that relationship constituting instead one between
an owner and an independent contractor. 
Accordingly, we must conclude that the decision of 21 December 1987 of Labor Arbiter Alex Lopez,
which decision was affirmed by public respondent NLRC, must be set aside as
having been rendered in disregard of the Resolution of this Court in G.R. No.
51311.

By way of post scriptum, the
Court notes that, in any event, the case at bar for alleged illegal dismissal
was filed almost exactly five (5) years after it allegedly took place on year
end 1979.  This indicates, not only that
private respondents’ claims are barred by prescription^[2],
but also that
the case at bar was commenced as a mere afterthought on the part of private
respondents who were apparently encouraged (however mistakenly) by the
Resolution of the Court in G.R. No. 57880. 
But private respondents are in fact trying to re-litigate the issues
already settled by the Court on 3
September 1979, in G.R. No. 51311, something which cannot be
allowed by this Court.

WHEREFORE, the Court Resolved to GRANT DUE COURSE to the
Petition for Certiorari and to SET ASIDE and ANNUL the Resolutions of
public respondent NLRC in NLRC Case No. 12­4388-84 dated 24 August 1988 and 12 December 1988. 
Costs against private respondents.

Fernan, C.J., (Chairman), Gutierrez,
Jr., Bidin, and Davide, Jr., JJ., concur.

^[1]
Private respondents filed with the Ministry of Labor a complaint for unfair
labor practice alleging that petitioner had failed to honor their Collective
Bargaining Agreement.  In an order dated 4 February 1980 private respondents’
complaint was dismissed on the ground that the Supreme Court in G.R. 51311 had already declared
that there was no employer-employee relationship between private respondents
and petitioner.

On 8 February 1980, private respondents filed another
complaint against petitioner before the Regional Trial Court of Manila for
breach of contract.  This case was
decided by the RTC only on 16 January
1990, eleven years later.  In
the decision penned by Judge Fructuoso Velicaria, Jr., private respondents’ complaint was
dismissed for lack of merit.  The
Decision reads in part, as follows:

“x x x    x x x     x x x

x x x that on appeal to the
Ministry of Labor, the Ministry, through the Deputy Minister, issued an Order
reversing the Decision of the Regional Director dated August 2, 1979, declaring
the Collective Bargaining Agreement as
a mere trade agreement and that there exist no employee-employer
relationship between the parties (Exh. D,, D-1 to
D-4); that upon receipt of the Order of the Deputy Minister of Labor, plaintiff
appealed by way of certiorari to the Honorable Supreme Court, which
appeal was denied for lack of merit, thus the Supreme Court upheld the Decision
of the Ministry of Labor that the Collective Bargaining Agreement is a mere
trade agreement and that there exist no employee-employer relationship (Exh. E and F); and that the action by the plaintiffs before
the Ministry of Labor, subsequent to the ruling of the Supreme Court, for
unfair labor practice against defendant, was dismissed by the Labor Arbiter for
lack of jurisdiction.

x x x     x x x     x x x

WHEREFORE,
judgment is hereby rendered denying the prayer for preliminary mandatory
injunction of plaintiffs and dismissing plaintiffs’ complaint for lack of merit
with costs against plaintiffs.”

^[2]
Art. 291, Labor Code established a 3-year prescriptive period for money claims
arising from employer-employee relations.