Philippine Airline Vs LIGAN

PAL v. Ligan (G.R. No.
146408)
Date: December 10, 2016Author: jaicdn
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Facts:
Petitioner Philippine Airlines and Synergy Services Corporation as Contractor, entered into an
Agreement whereby Synergy undertook to provide loading and delivery services by furnishing all the
necessary capital, workers, materials, supplies and equipment for the performance and execution of
said work. Herein respondents who appear to have been assigned to work for petitioner filed complaints
before the NLRC for the payment of their labor standard benefits and regularization of employment
status claiming that they are performing duties directly connected with petitioner’s business. The Labor
Arbiter’s decision found Synergy an independent contractor but was vacated on appeal. The NLRC
tribunal declared Synergy to be a labor-only contractor and was affirmed by the CA. Petitioner moved
for reconsideration but was denied.
PHILIPPINE AIRLINES, INC.
VS
ENRIQUE LIGAN
G.R. No. 146408, 30 April 2009
It must be stressed that respondents, having been declared to be regular employees, had acquired
security of tenure. As such, they could only be dismissed by the real employer, on the basis of just or
authorized cause, and with observance of procedural due process.
Enrique Ligan, et al. and the other respondents were employees of Synergy Services Corporation
(Synergy) which provides manpower for Philippine Airlines. It was later discovered that Synergy is a
labor-only contractor. They were dismissed by Philippine Airlines on several grounds, one of which is in
the guise of retrenchment. The legality of the dismissal of the Ligan, et al. has been pending before the
Court of Appeals.
Philippine Airlines paid the wages of the Ligan, et al. but contested the employment status of Roque
Pilapil for he is already terminated and Benedicto Auxtero who signed the ―Release and Quitclaim and
Waiver‖. Philippine Airlines therefore pleads to the court to reconsider its first Decision on the payment
of wages and benefits.
ISSUE:
Whether or not the Supreme Court shall overrule its first decision regarding the grant of wages and
benefits to Ligan, et al.
HELD:
In light of these recent manifestations-informations of the parties, the Court finds that a modification of
the Decision is in order, the claims with respect to Pilapil and Auxtero having been deemed extinguished
even before the promulgation of the Decision. That Pilapil was a regular employee yields to the final
finding of a valid dismissal in the supervening case involving his own misconduct, while Auxtero’s
attempt at forum-shopping should not be countenanced.
IN ALL OTHER RESPECTS, the Court finds no sufficient reason to deviate from its Decision, but proceeds,
nonetheless, to clarify a few points. While this Court’s Decision ruled on the regular status of Ligan, et
al., it must be deemed to be without prejudice to the resolution of the issue of illegal dismissal in the
proper case.
Notably, subject of the Decision was Ligan, et al.’s complaints for regularization and under-/non-
payment of benefits. The Court did not and could not take cognizance of the validity of the eventual
dismissal of Ligan, et al. because the matter of just or authorized cause is beyond the issues of the case.
That is why the Court did not order reinstatement for such relief presupposes a finding of illegal
dismissal in the proper case which, as the parties now manifest, pends before the appellate court.
All told, the pending illegal dismissal case in CA-G.R. SP No. 00922 may now take its course. The Court’s
finding that Ligan, et al. are regular employees of PAL neither frustrates nor preempts the appellate
court’s proceedings in resolving the issue of retrenchment as an authorized cause for termination. If an
authorized cause for dismissal is later found to exist, PAL would still have to pay Ligan, et al. their
corresponding benefits and salary differential up to June 30, 1998. Otherwise, if there is a finding of
illegal dismissal, an order for reinstatement with full backwages does not conflict with the Court’s
declaration of the regular employee status of Ligan, et al.
Issue:
Whether or not there is labor-only contracting.
Ruling: YES.
For labor-only contracting to exist, Section 5 of D.O. No. 18-02 which requires any of two elements to be
present is, for convenience, re-quoted:
(i) The contractor or subcontractor does not have substantial capital or investment which relates to the
job, work or service to be performed and the employees recruited, supplied or placed by such
contractor or subcontractor are performing activities which are directly related to the main business of
the principal, OR
(ii) The contractor does not exercise the right to control over the performance of the work of the
contractual employee.
Even if only one of the two elements is present then, there is labor-only contracting.
From the records of the case, it is gathered that the work performed by almost all of the respondents –
loading and unloading of baggage and cargo of passengers – is directly related to the main business of
petitioner. And the equipment used by respondents as station loaders, such as trailers and conveyors,
are owned by petitioner.
Petitioner PAL, and not Synergy, exercises control and supervision over the respondent workers’
methods of doing the work, as reflected in their Agreement: (1) Contractor (Synergy) shall require all its
workers, employees, suppliers and visitors to comply with OWNER’S (PAL) rules, regulations, procedures
and directives relative to the safety and security of OWNER’S premises, properties and operations (2)
xxx shall furnish its employees and workers identification cards to be countersigned by OWNER and
uniforms to be approved by OWNER. (3) OWNER may require CONTRACTOR to dismiss immediately and
prohibit entry into OWNER’S premises of any person employed therein by CONTRACTOR who in
OWNER’S opinion is incompetent or misconducts himself or does not comply with OWNER’S reasonable
instructions xxx
Petitioner in fact admitted that it fixes the work schedule of respondents as their work was dependent
on the frequency of plane arrivals. And as the NLRC found, petitioner’s managers and supervisors
approved respondents’ weekly work assignments and respondents and other regular PAL employees
were all referred to as “station attendants” of the cargo operation and airfreight services of petitioner.
Respondents having performed tasks which are usually necessary and desirable in the air transportation
business of petitioner, they should be deemed its regular employees and Synergy as a labor-only
contractor.

Philippine Airline Vs LIGAN

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PAL v. Ligan (G.R. No.

Date: December 10, 2016Author: jaicdn

PHILIPPINE AIRLINES, INC.

G.R. No. 146408, 30 April 2009

Whether or not there is labor-only contracting.

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