Rosewood Processing vs.

NLRC, 21 May 1998

FACTS:
Private respondents were security guards of Veterans Philippine Scout Security Agency.
Some were assigned to other companies and detailed to Rosewood, while others are re-
assigned to other companies from Rosewood, and still others were put on floating
status without assignment.
Most were underpaid or their wages were never paid. All these circumstances led to the
filing of a complaint for illegal dismissal, underpayment of wages, and for nonpayment
of overtime pay, legal holiday pay, premium pay for holiday and rest day, thirteenth
month pay, cash bond deposit, unpaid wages and damages was filed against Veterans
Philippine Scout Security Agency and/or Sergio Jamila IV (collectively referred to as the
"security agency," for brevity).
Thereafter, petitioner Rosewood Processing, Inc. was impleaded as a third-party
respondent by the security agency. In due course, Labor Arbiter Ricardo C. Nora
rendered a consolidated Decision dated March 26, 1993 finding the security agency and
Rosewood as solidarily liable to pay the monetary benefits due the security guards.

ISSUE:
Whether petitioner Rosewood was solidarily liable with the security agency for the non-
payment of wages
RULING:
The Supreme Court held that while it is undisputable that by operation of the provisions of
Articles 106, 107 and 109, the Employer which is Rosewood has solidary liability for payment of
wage differentials, such liability however should only be to the extent of the period when the
respondent guards were under its employment. For the periods where said guards were assigned
somewhere else, the Supreme Court held that Rosewood cannot be liable. The Supreme Court
further held that since there was no evidence presented pointing to the fact that Rosewood
conspired with the security agency in illegally dismissing the guards, it cannot be made liable to
pay back wages as provided in Article 109. Finally, since an order to pay back wages and
separation pay is invested with a punitive character, such that an indirect employer should not be
made liable without a finding that it had committed or conspired in the illegal dismissal, then
Rosewood, which was no longer the employer of the guards when they were dismissed, should
not be compelled to pay since it was clear that it took no part in the illegal dismissal.