Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 122468 September 3, 1998
SENTINEL SECURITY GENCY, INC., petitioner,
vs.
NTIONL L!OR RELTIONS COMMISSION, "RINO C!NO, #R.,
$ERONICO C. %M!O, &ELCIS RROYO, RUSTICO N"OY, '() M*IMO
ORTI%, respondents.
G.R. No. 122+16 September 3, 1998
P&ILIPPINE MERICN LI,E INSURNCE COMPNY, petitioner,
vs.
NTIONL L!OR RELTIONS COMMISSION, $ERONICO %M!O, &ELCIS
RROYO, "RINO C!NO, M*IMO ORTI%, '() RUSTICO N"OY,
respondents.

PNGNI!N, J.:
The transfer of an eplo!ee involves a lateral oveent "ithin the business or
operation of the eplo!er, "ithout deotion in ran#, diinution of benefits or, "orse,
suspension of eplo!ent even if teporar!. The recall and transfer securit! $uards
re%uire reassi$nent to another post and are not e%uivalent to their placeent on
&floatin$ status.& Off'detailin$ securit! $uards for a reasonable period of si( onths is
)ustified onl! in bona fide cases of suspension of operation, business or underta#in$.
The Case
This is the rationale used b! the *ourt in disissin$ the t"o consolidated petitions for
certiorari before us, see#in$ the reversal of the Decision dated +u$ust ,-, .//-, and the
Resolution dated October ,0, .//-, both proul$ated b! the National 1abor Relations
*oission
1
in N1R* *ase No. V'23.4'/0 5R+6 VII'2.'22/4'/0, R+6 VII'2,'2.43'/0,
and R+6 VII'2.'2.33'/07.
In the action for ille$al disissal and pa!ent of salar! differential, service incentive
leave pa! and separation pa! filed b! private respondents, 1abor +rbiter Doinador +.
+lirante rendered a Decision, "hich disposed8
2
9:;R;FOR;, preises considered<,= )ud$ent is hereb! rendered
orderin$ . . . Sentinel Securit! +$enc!, Inc. )ointl! and severall! "ith . .
. Philalife, *ebu 6ranch, to pa! coplainants the total aount of
<s=i(t! <t=housand <o=ne <h=undred <t="elve <p=esos and -2>.22
5P?2,..,.-27 in the concept of .3th onth pa! and service incentive
leave benefits as coputed b! our 1abor +rbitration +ssociate "hose
coputation is hereto attached and forin$ part hereof.
3
On appeal, the N1R* odified the labor arbiter@s Decision. The dispositive portion of
the N1R* Decision
4
reads8
9:;R;FOR;, the assailed Decision is hereb! MODIFI;D in so far
as the a"ard of .3th onth pa! for the previous !ears "hich is
hereb! e(cluded. Further, . . . Sentinel Securit! +$enc!, Inc. is hereb!
ORD;R;D to pa! coplainants separation pa! at the rate of .>,
onth pa! for ever! !ear of service and for both . . . Philippine
+erican 1ife Insurance, Inc. and Sentinel Securit! +$enc!, Inc.
and>or Daniel I"a! to pa! to the <coplainants= )ointl! and severall!
their bac#"a$es fro Aanuar! .?, .//0 to Aanuar! .-, .//- and the
correspondin$ .3th onth pa! for the said !ear. The onetar!
a"ards hereb! $ranted are bro#en do"n as follo"s <into separation
pa!, bac# "a$es, .3th onth pa! and service incentive leave pa!=8
((( ((( (((
-
The challen$ed Resolution denied reconsideration &for lac# of erit.&
6
The Facts
The undisputed factual bac#drop is narrated b! Respondent *oission as follo"s8
+
The coplainants "ere eplo!ees of Sentinel <Securit! +$enc!, Inc., hereafter referred
to as &the +$enc!&= since March ., ./?? in the case of Veronico BaboC October ,4,
./4- in the case of :elcias +rro!oC Septeber ,2, ./D- in the case of +driano *abanoC
Februar! ., .//2 in the case of Ma(io OrtiEC and Noveber ., ./?4 in the case of
1
Rustico +ndo!. The! "ere assi$ned to render $uard dut! at the preises of <Philippine
+erican 1ife Insurance *opan!= at Aones +venue, *ebu *it!. On Deceber .?,
.//3 Philippine +erican 1ife Insurance *opan! <&the *lient,& for brevit!=, throu$h
*arlos De Pano, Ar., sent notice to all concerned that the <+$enc!= "as a$ain a"arded
the contract of <s=ecurit! <s=ervices to$ether "ith a re%uest to replace all the securit!
$uards in the copan!@s offices at the cities of *ebu, 6acolod, *a$a!an de Oro,
Dipolo$ and Ili$an. In copliance there"ith, <the +$enc!= issued on Aanuar! .,, .//0, a
Relief and Transfer Order replacin$ the coplainants as $uards <of the *lient= and for
the to be re'assi$ned <to= other clients effective Aanuar! .?, .//0. +s ordered, the
coplainants reported but "ere never $iven ne" assi$nents but instead the! "ere
told in the vernacular, &$ui'ilisan o #a! $a ti$ulan$ naan o& "hich "hen
translated eans, &!ou "ere replace<d= because !ou are alread! old.& Precisel!, the
coplainants lost no tie but filed the sub)ect ille$al disissal cases on Aanuar! .D,
Aanuar! ,? and Februar! 0, .//0 and pra!ed for pa!ent of separation pa! and other
labor standard benefits.
<The *lient and the +$enc!= aintained there "as no disissal on the
part of the coplainants, constructive or other"ise, as the! "ere
protected b! the contract of securit! services "hich allo"s the recall
of securit! $uards fro their assi$ned posts at the "ill of either part!.
It also advanced that the coplainants preaturel! filed the sub)ect
cases "ithout $ivin$ the <+$enc!= a chance to $ive the soe
assi$nents.
On the part of <the *lient=, it averred further that there <"as= no
eplo!er'eplo!ee relationship bet"een it and the coplainants as
the latter "ere erel! assi$ned to its *ebu 6ranch under a )ob
contractC that <the +$enc!= ha<d= its o"n separate corporate
personalit! apart fro that of <the *lient=. 6esides, it pointed out that
the functions of the coplainants in providin$ securit! services to <the
*lient@s= propert! <"ere= not necessar! and desirable to the usual
business or trade of <the *lient=, as it could still operate and en$a$e in
its life insurance business "ithout the securit! $uards. In fine, <the
*lient= aintains that the coplainants have no cause of action
a$ainst it.
Ruling of Respondent Commission
Respondent *oission ruled that the coplainants "ere constructivel! disissed, as
&the recall of the coplainants fro their lon$ tie post<s= at <the preises of the *lient=
"ithout an! $ood reason is a schee to )ustif! or caoufla$e ille$al disissal.
It ruled that Superstar Security Agency, Inc. vs. National Laor Relations Commission
8

A! "rime Security Services, Inc. vs. National Laor Relations Commission
9
"ere not
applicable to the case at bar. In the forer, the securit! $uard "as placed on teporar!
&off'detail& due to his poor perforance and lac# of eleentar! courtes! and tact, and to
the cost'cuttin$ pro$ra of the a$enc!. In the latter, the relief of the securit! $uard "as
due to his sleepin$ "hile on dut! and his repeated refusal to resue "or# despite
notice.
In the present case, the coplainants "ere told b! the +$enc! that the! lost their
assi$nent at the *lient@s preises because the! "ere alread! old, and not because
the! had coitted an! infraction or irre$ularit!. The N1R* applied R+ 4?0.,
1.
"hich
$ives retireent benefits of one'half onth pa! per !ear of service to retirable
eplo!ees vi#.8
. . . +s stated earlier . . ., the coplainants "ere in the service of <the
*lient= for nearl! t"ent! 5,27 !ears in the cases of :elcias +rro!o and
for ore than t"ent! 5,27 !ears in the cases of Veronico Babo and
Rustico +ndo!, "hich lon$ !ears of service <appear= on record to be
unbleished. The coplainants "ere then confronted "ith an
ipendin$ sudden loss of earnin$s for "hile the order of <the +$enc!=
to &iediatel! report for reassi$nent& oentaril! $ave the
hope, there "as in fact no iediate reinstateent. 9hile it could
have been prudent for the coplainants to "ait, the! "ere set
unstable and "ere actuall! threatened b! the stateent of the
personnel in char$e of <the +$enc!= that the! "ere alread! old, that
"as "h! the! "ere replaced.
+$ainst these $larin$ facts is the ne" Retireent 1a", R.+. 4?0.
"hich too# effect on Aanuar! 4, .//3 $ivin$ retireent benefits of .>,
onth pa! per !ear of service to an eplo!ee upon reachin$
retireent a$e to be paid b! the eplo!er, in this case at %uite a
siEeable aount and in not so lon$ due tie as soe of the
coplainants "ere described as alread! old.
+s coplainants "ere ille$all! disissed, the N1R* ruled that the! "ere entitled to the
t"in reedies of bac# "a$es for one 5.7 !ear fro the tie of their disissal on
Aanuar! .-, .//0, pa!able b! both the *lient and the +$enc!, and separation pa! of
one'half onth pa! for ever! !ear of service pa!able onl! b! the +$enc!. Reinstateent
"as not $ranted due to the resultin$ antipath! and resentent aon$ the coplainants,
the +$enc! and the *lient.
:ence, this petition.
11
2
The Issues
In their eoranda, the +$enc! poses this %uestion8
12
. . . <9hether . . . Sentinel is $uillt! of ille$al disissal<,=
On the other hand, the *lient raises the follo"in$ issues8
13
9hether . . . <the coplainants= "ere ille$all! disissed b! their
eplo!er, Sentinel Securit! +$enc!, Inc., and in holdin$ petitioner to
be e%uall! liable therefor.
9hether . . . petitioner is )ointl! and severall! liable "ith Sentinel
Securit! +$enc!, Inc., in the latter@s pa!ent of bac#"a$es, .3th
onth pa! and service incentive leave pa! to its eplo!ees . . . .
In su, the resolution of these consolidated petitions hin$es on 5.7 "hether the
coplainants "ere ille$all! disissed, and 5,7 "hether the *lient is )ointl! and severall!
liable for their thirteenth'onth and service incentive leave pa!s.
The Court!s Ruling
The petition is partl! eritorious.
First Issue8
Illegal $ismissal
The private respondents@ transfer, accordin$ to Respondent *oission, "as effected
to circuvent the andate of Republic +ct 4?0. 5Ne" Retireent 1a"7, "hich b! then
had alread! ta#en effect, in vie" of the fact that the coplainants had "or#ed for both
the *lient and the +$enc! for .2 to ,2 !ears and "ere nearin$ retireent a$e. 9ith this
preise, the N1R* concluded that the $uards "ere ille$all! disissed. The
coplainants add that the findin$s of the *oission atch the rear#s of the
personnel ana$er of the +$enc!, Feliciano MarticionC that is, that the! "ere bein$
replaced because the! "ere alread! old. The! insist that their service records are
unbleishedC hence, the! could not have been disissed b! reason of an! )ust cause.
9e a$ree that the securit! $uards "ere ille$all! disissed, but not for the reasons $iven
b! the public respondent. The aforecited contentions of the N1R* are speculative and
unsupported b! the evidence on record. +s the solicitor $eneral said in his Manifestation
in 1ieu of *oent, the relief and transfer order "as a#in to placin$ private
respondents on teporar! &off'detail.&
6ein$ sidelined teporaril! is a standard stipulation in eplo!ent contracts, as the
availabilit! of assi$nent for securit! $uards is priaril! dependent on the contracts
entered into b! the a$enc! "ith third parties. Most contracts for securit! services, as in
this case, stipulate that the client a! re%uest the replaceent of the $uards assi$ned
to it. In securit! a$enc! parlance, bein$ placed &off detail& or on &floatin$& status eans
&"aitin$ to be posted.&
14
This circustance is not e%uivalent to disissal, so lon$ as
such status does not continue be!ond a reasonable tie.
1-
In the case at bar, the relief and transfer order per se did not sever the eplo!ent
relationship bet"een the coplainants and the +$enc!. Thus, despite the fact that
coplainants "ere no lon$er assi$ned to the *lient, +rticle ,D4 of the 1abor *ode, as
aended b! R+ 4?0., still binds the +$enc! to provide the F upon their reachin$ the
retireent a$e of si(t! to si(t!'five !ears F retireent pa! or "hatever else "as
established in the collective bar$ainin$ a$reeent or in an! other applicable
eplo!ent contract. On the other hand, the *lient is not liable to the coplainants for
their retireent pa! because of the absence of an eplo!er'eplo!ee relationship
bet"een the.
:o"ever, the +$enc! clais that the coplainants, after bein$ placed off'detail,
abandoned their eplo!. The solicitor $eneral, sidin$ "ith the +$enc! and the labor
arbiter, contends that "hile abandonent of eplo!ent is inconsistent "ith the filin$ of
a coplaint for ille$al disissal, such rule is not applicable &"here <the coplainant=
e(pressl! re)ects this relief and as#s for separation pa! instead.&
The *ourt disa$rees. +bandonent, as a )ust and valid cause for terination, re%uires a
deliberate and un)ustified refusal of an eplo!ee to resue his "or#, coupled "ith a
clear absence of an! intention of returnin$ to his or her "or#.
16
That coplainants, did
not pra! for reinstateent is not sufficient proof of abandonent. + stron$ indication of
the intention of coplainants to resue "or# is their alle$ation that on several dates
the! reported to the +$enc! for reassi$nent, but "ere not $iven an!. In fact, the
contention of coplainant is that the +$enc! constructivel! disissed the.
+bandonent has recentl! been ruled to be incopatible "ith constructive disissal.
9e, thus, rule that coplainants did not abandon their )obs.
1+
9e "ill no" deonstrate "h! "e believe coplainants "ere ille$all! disissed.
In several cases, the *ourt has reco$niEed the prero$ative of ana$eent to transfer
an eplo!ee fro one office to another "ithin the sae business establishent, as the
e(i$enc! of the business ! re%uire, provided that the said transfer does nor result in a
deotion in ran# or a diinution in salar!, benefits and other privile$es of the eplo!eeC
3
18
or is not unreasonable, inconvenient or pre)udicial to the latterC
19
or is not used as a
subterfu$e b! the eplo!er to rid hiself of an undesirable "or#er.
2.
+ transfer eans a oveent 5.7 fro one position to another of e%uivalent ran#, level
or salar!, "ithout a brea# in the serviceC
21
and 5,7 fro one office to another "ithin the
sae business establishent.
22
It is distin$uished fro a prootion in the sense that it
involves a lateral chan$e as opposed to a scalar ascent.
23
In this case, transfer of the coplainants iplied ore than a relief fro dut! to $ive
the tie to rest F a ere &chan$in$ of the $uards. &Rather, their transfer connoted a
reshufflin$ or e(chan$e of their posts, or their reassi$nent to other posts, such that no
securit! $uard "ould be "ithout an assi$nent.
:o"ever, this le$all! reco$niEed concept of transfer "as not ipleented. The +$enc!
hired ne" securit! $uards to replace the coplainants, resultin$ in a lac# of posts to
"hich the coplainants could have been reassi$ned. Thus, it refused to reassi$n
*oplainant +ndo! "hen he reported for dut! on Februar! ,, 0 and 4, .//0C and
erel! told the other coplainants on various dates fro Aanuar! ,- to ,4, .//0 that
the! "ere alread! too old to be posted an!"here.
The +$enc! no" e(plains that since, under the la", the +$enc! is $iven a period of not
ore than si( onths to retain the coplainants on floatin$ status, the coplaint for
ille$al disissal is preature. This contention is incorrect.
+ floatin$ status re%uires the dire e(i$enc! of the eplo!er@s bona fide suspension of
operation, business or underta#in$. In securit! services, this happens "hen the clients
that do not rene" their contracts "ith a securit! a$enc! are ore than those that do and
the ne" ones that the a$enc! $ets. :o"ever, in the case at bar, the +$enc! "as
a"arded a ne" contract b! the *lient. There "as no surplus of securit! $uards over
available assi$nents. If there "ere, it "as because the +$enc! hired ne" securit!
$uards. Thus, there "as no suspension of operation, business or underta#in$, bona fide
or not, that "ould have )ustified placin$ the coplainants off'detail and a#in$ the
"ait for a period of si( onths. If indeed the! "ere erel! transferred, there "ould have
been no need to a#e the "ait for si( onths.
The onl! lo$ical conclusion fro the fore$oin$ discussion is that the +$enc! ille$all!
disissed the coplainants. :ence, as a necessar! conse%uence, the coplainants
are entitled to reinstateent and bac# "a$es.
24
:o"ever, reinstateent is no lon$er
feasible in this case. The +$enc! cannot reassi$n the to the *lient, as the forer has
recruited ne" securit! $uardsC the coplainants, on the other hand, refuse to accept
other assi$nent. Veril!, coplainants do not pra! for reinstateentC in fact the!
refused to be reinstated. Such refusal is indicative of strained relations.
2-
Thus,
separation pa! is a"arded in lieu of reinstateent.
26
Second Issue8
Client!s Liaility
The *lient did not, as it could not, ille$all! disiss the coplainants. Thus, it should not
be held liable for separation pa! and bac# "a$es. 6ut even if the *lient is not.
responsible for the ille$al disissal of the coplainants, it is )ointl! and severall! liable
"ith the +$enc! for the coplainants@ service incentive leave pa!. In Rose"ood
Processin$, Inc. vs. National 1abor Relations *oission,
2+
the *ourt e(plained that,
not"ithstandin$ the service contract bet"een the client and the securit! a$enc!, the t"o
are solidaril! liable for the proper "a$es prescribed b! the 1abor *ode, pursuant to
+rticles .2?, .24 and .2/ thereof, "hich "e %uote hereunder8
+rt. .2?. *ontractor or subcontractor. F 9henever an eplo!er
enters into a contract "ith another person for the perforance of the
forer<@s= "or#, the eplo!ees of the contractor and of the latter<@s=
subcontractor, if an!, shall be paid in accordance "ith the provisions
of this *ode.
In the event that the contractor or subcontractor fails to pa! the "a$es
of his eplo!ees in accordance "ith this *ode, the eplo!er shall be
)ointl! and severall! liable "ith his contractor or subcontractor to such
eplo!ees to the e(tent of the "or# perfored under the contract, in
the sae anner and e(tent that he is liable to eplo!ees directl!
eplo!ed b! hi.
The Secretar! of 1abor a!, b! appropriate re$ulations, restrict or
prohibit the contractin$ out of labor to protect the ri$hts of "or#ers
established under this *ode. In so prohibitin$ or restrictin$, he a!
a#e appropriate distinctions bet"een labor'onl! contractin$ and )ob
contractin$ as "ell as differentiations "ithin these t!pes of contractin$
and deterine "ho aon$ the parties involved shall be considered
the eplo!er for purposes of this *ode, to prevent an! violation or
circuvention of an! provision of this *ode.
. . . In such cases <labor'onl! contractin$=, the person or interediar!
shall be considered erel! as an a$ent of the eplo!er "ho shall be
responsible to the "or#ers in the sae anner and e(tent as if the
latter "ere directl! eplo!ed b! hi.
+rt. .24. Indirect eplo!er. F The provisions of the iediatel!
precedin$ +rticle shall li#e"ise appl! to an! person, partnership,
association or corporation "hich, not bein$ an eplo!er, contracts
4
"ith an independent contractor for the perforance of an! "or#, tas#,
)ob or pro)ect.
+rt. .2/. Solidar! liabilit!. F The provisions of e(istin$ la"s to the
contrar! not"ithstandin$, ever! eplo!er or indirect eplo!er shall
be held responsible "ith his contractor or subcontractor for an!
violation of an! provision of this *ode.
For purposes of deterinin$ the e(tent of their civil liabilit! under this
*hapter, the! shall be considered as direct eplo!ers.
Gnder these provisions, the indirect eplo!er, "ho is the *lient in the case at bar, is
)ointl! and severall! liable "ith the contractor for the "or#ers@ "a$es, in the sae
anner and e(tent that it is liable to its direct eplo!ees. This liabilit! of the *lient
covers the pa!ent of the service incentive leave pa! of the coplainants durin$ the
tie the! "ere posted at the *ebu branch of the *lient. +s service had been rendered,
the liabilit! accrued, even if the coplainants "ere eventuall! transferred or reassi$ned.
The service incentive leave is e(pressl! $ranted b! these pertinent provisions of the
1abor *ode8
+rt. /-. Ri$ht to service incentive leave. F 5a7 ;ver! eplo!ee "ho
has rendered at least one !ear of service shall be entitled to a !earl!
service incentive leave of five da!s "ith pa!.
5b7 This provision shall not appl! to those "ho are alread! en)o!in$
the benefit herein provided, those en)o!in$ vacation leave "ith pa! of
at least five da!s and those eplo!ed in establishents re$ularl!
eplo!in$ less than ten eplo!ees or in establishents e(epted
fro $rantin$ this benefit b! the Secretar! of 1abor after considerin$
the viabilit! or financial condition of such establishent.
5c7 The $rant of benefit in e(cess of that provided herein shall not be
ade a sub)ect of arbitration or an! court <or= adinistrative action.
Gnder the Ipleentin$ Rules and Re$ulations of the 1abor *ode, an unused service
incentive leave is coutable to its one! e%uivalent, vi#.8
Sec. -. Treatent of benefit. F The service incentive leave shall be
coutable to its one! e%uivalent if not used or e(hausted at the
end of the !ear.
The a"ard of the thirteenth'onth pa! is deleted in vie" of the evidence presented b!
the +$enc!, provin$ that such clai has alread! been paid to the coplainants.
Obviousl! then, the a"ard of such benefit in the dispositive portion of the assailed
Decision is erel! an oversi$ht, considerin$ that Respondent *oission itself deleted
it fro the ain bod! of the said Decision.
9:;R;FOR;, the petition is DISMISS;D and the assailed Decision and Resolution
are hereb! +FFIRM;D, but the a"ard of the thirteenth'onth pa! is D;1;T;D. *osts
a$ainst petitioners.
SO ORD;R;D.
5