NO STARE DECISIS BETWEEN CASES WHERE ONE INVOLVES ILLEGAL DISMISSAL AND THE OTHER VALIDITY OF CLOSURE

Olimpia Housing, Inc. vs. Lapastora
G.R. No. 187691, January 13, 2016

Facts:

Respondents Lapastora and Ubalubao alleged that they worked as  room  attendants  of  Olympic Housing, Inc. (OHI), the entity engaged in the management of Olympia  Executive  Residences  (OER) from  March  1995  and  June  1997,respectively, until they were placed on floating status on February 24, 2000, through a memorandum sent by Fast Manpower. They alleged that they were directly hired by the company and received salaries from its operations clerk. They also claimed that OHI exercised control over them as they were issued time cards, disciplinary action reports and checklists of room assignments.  It was also OHI  which  terminated  their  employment  after  they  petitioned  for regularization. Prior to their dismissal, they were subjected to investigations for  their  alleged  involvement  in  the  theft  of  personal  items  and  cash belonging to hotel guests and were summarily dismissed by OHI despite lack of evidence.

For  their  part,  OHI  and  Limcaoco  alleged  that  Lapastora  and Ubalubao were not employees of the company but of Fast Manpower, with which it had a contract of services, particularly, for the provision of room attendants.  They claimed that Fast Manpower is an independent contractor. Fast  Manpower  reiterated  that  it  is a legitimate manpower agency and that it had a valid contract of services with OHI, pursuant to which Lapastora and Ubalubao were deployed as room attendants.  Lapastora and Ubalubao were, however, found to have violated house rules and regulations and were reprimanded accordingly.  It denied the employees’ claim that they were dismissed and maintained they were only placed on floating status for lack of available work assignments.

Subsequently, a memorandum of agreement was executed, stipulating the transfer of management of the OER from OHI to HSAI-Raintree,  Inc.  (HSAI-Raintree).    Thereafter, OHI  informed the Department of Labor and Employment (DOLE) of its cessation of operations due to the said change of management and issued notices of termination to all  its  employees.   This  occurrence  prompted  some  union  officers  and members to file a separate complaint for illegal dismissal and unfair labor practice against OHI, Olympia Condominium Corporation (OCC) and HSAI-Raintree.

LA Ruling:

The Labor Arbiter (LA) rendered a Decision in the instant case, holding that Lapastora and Ubalubao were regular employees  of OHI and that they were illegally dismissed. The LA held  that  OHI  exercised  control and  supervision  over  Lapastora and Ubalubao through its supervisor, Anamie Lat.  The LA likewise noted that documentary evidence consisting of time cards, medical cards and medical examination reports all indicated OHI as employer of the said employees.

NLRC Ruling:

The NLRC rendered a decision, dismissing the appeal for lack of merit. The NLRC held that OHI is the employer of Lapastora and Ubalubao since Fast Manpower failed to establish the fact that it is an independent contractor.  Further, it ruled that the memorandum of agreement between OCC and HSAI-Raintree did not render the reinstatement of Lapastora and Ubalubao  impossible  since  a  change  in  the  management  does  not automatically  result  in  a  change  of  personnel  especially  when  the memorandum itself did not include a provision on that matter.

OHI filed its Motion for Reconsideration but the NLRC denied the same. Thus, it filed the petition for certiorari. The CA ruled that OHI’s cessation of operations on October 1, 2000 is not a supervening event because it transpired long before the promulgation of the LA’s Decision dated May 10, 2002 in the instant case.  In the same manner, the ruling of the NLRC in Ocampo v. OHI does not constitute stare decisis to the present petition because of the apparent dissimilarities in the attendant circumstances.

(In Ocampo v. OHI, the NLRC rendered a Decision upholding the validity of the cessation of OHI’s operations and the consequent termination of all its employees.  It stressed that the cessation of business springs from the management’s prerogative to do what is necessary for the protection of its investment, notwithstanding adverse effect on the employees.  The discharge of employees for economic reasons does not amount to unfair labor practice. The said ruling of the NLRC was elevated on petition for certiorari to the CA, which dismissed the same. These were appealed to the SC which  was,  however,  denied for failure to comply with procedural rules and lack of reversible error on the part of the CA.)

CA Ruling:

The  CA  rendered  a  Decision dismissing  the petition. The CA ruled that OHI’s cessation of operations is not a supervening event because it transpired long before the promulgation of the LA’s Decision dated in the instant case.  In the same manner, the ruling of the NLRC in Ocampo v. OHI does not constitute stare decisis to the present petition because of the apparent dissimilarities in the attendant circumstances. Considering that OHI failed to  prove  that  the  memorandum  of  agreement  between  OCC  and HSAI-Raintree  had  any  effect  on  the  employment  of  Lapastora  and Ubalubao  or  that  there  is  any  other  valid  or  authorized  cause  for  their termination from employment, the CA concluded that they were unlawfully dismissed. Hence, the petition. (Ubalubao withdrew the complaint and received financial assistance).

Issue/s:

1. Whether or not the Decision in Ocampo vs. OHI constitutes a stare decisis to the instant case;

2. Whether or not respondents were employees of OHI and whether or not they were dismissed from employment

SC Ruling:

Lapastora was illegally dismissed. Lapastora was a regular employee of OHI.  He has been under the continuous employ of OHI since March 3, 1995  until  he  was  placed  on  floating  status  in  February  2000.   His uninterrupted employment by OHI, lasting for more than a year, manifests the continuing  need  and  desirability  of  his  services,  which  characterize regular employment in  Article 280 of the Labor Code. The fact alone that Lapastora was allowed to work for an unbroken period of almost five years is all the same a reason to consider him a regular employee. OHI miserably failed to discharge its burdens thus making Lapastora’s termination illegal.

That there is an existing contract of services between OHI and Fast Manpower where both parties acknowledged the latter as the employer of the housekeeping staff, including Lapastora, did not alter established facts proving the contrary.  The parties cannot evade the application of labor laws by mere expedient of a contract considering that labor and employment are matters imbued with public interest.  It cannot be subjected to the agreement of the  parties  but  rather  on  existing  laws  designed  specifically  for  the protection of labor.

Under the principle of stare decisis, questions of law that have been decided by this Court and applied in resolving earlier cases shall be deemed the prevailing rule which shall be binding on future cases dealing on the same intricacies. There is no doctrine of law that is similarly applicable in both the present case and in Ocampo v. OHI.  While  both  are  illegal  dismissal cases,  they  are  based  on  completely different sets of facts and involved distinct issues.  In the instant case, Lapastora cries illegal dismissal after he was arbitrarily placed on a floating status on mere suspicion that he was involved in theft incidents within the company premises without being given the opportunity to explain his side or any formal investigation of his participation.  On the other hand, in Ocampo v. OHI, the petitioners therein questioned the validity of OHI’s closure of business and the eventual termination of all the employees.  Thus, the NLRC ruled upon both cases differently.