G.R. NO. 126428 -

Ruling

WHEREFORE, respondents Elcee Farms Inc., Corazon Saguemuller, Hilla Corporation, Rey Hillado & Roberto Montaño are ordered to pay the complainants separation pay as awarded. The respondents are further ordered to pay the complainants P5,000.00 each as moral damages for all their troubles and suffering from the disturbance of their rights to labor. Appealed decision is hereby modified. [16] The three sets of parties (1) the complainants; (2) Elcee Farms and Corazon Saguemuller; and (3) Hilla, Rey Hilado and Roberto Montaño, filed their own Motions for Reconsideration. In a Resolution, dated 29 May 1996, the NLRC admitted that it overlooked vital points in its earlier Decision and made a finding that the lease contract between Elcee Farms and Garnele was simulated and that the former continued to act as the employer of the complainants, until Hacienda Trinidad was sub-leased to HILLA in 1990. It took into account the fact that the complainants payrolls named Elcee Farms as the employer when the hacienda was supposed to have been leased to Garnele. During the same period, the SSS Forms E-4 used in paying the complainants contributions which named Elcee Farms as employer were also included in the records. The NLRC ruled that the simulation of the lease agreement between Elcee Farms and Garnele smacks of bad faith and is the basis for its award of Five Thousand Pesos in moral and exemplary damages. [17] In its Resolution, the NLRC also explained that Elcee Farms should have informed its employees of the lease made in favor of HILLA. Further, Elcee Farms was obligated to pay its workers separation pay and other benefits due since the lease to HILLA was a virtual termination of the employer-employee relationship. Moreover, there is no showing that HILLA assumed Elcee Farmss obligation to pay the various benefits due to the workers from their employment with Elcee Farms. Thus, Elcee Farms and Corazon Saguemueller were held liable to pay the complainants separation pay equivalent to one-half month pay for each year of service or one month pay for those who worked for only one year. [18] On the other hand, the NLRC absolved HILLA and its officers from any liability to the workers since the dismissal of the complainants was due to their failure to join USFO, in accordance with the closed shop clause found in its CBA with the USFO. The NLRC found that there was no existing labor union at the time HILLA took legal possession of Hacienda Trinidad. On the other hand, SAILO filed a petition for certification elections only on 26 December 1990, after Daniel Hilado entered into the CBA with USFO. [19] Finally, the NLRC significantly modified the Decision rendered by the Labor Arbiter. The earlier Decision rendered by the Labor Arbiter granted the claims of only 28 out of the 144 complainants. The NLRC ruled that the claim of 131 employees should be granted and that only 14 of the 144 complainants were to be excluded, based on the testimony of Pampelo Semilla