G.R. No. 110731 -

Ruling

WHEREFORE, judgment is hereby rendered: (1) finding the respondents Shoppers Gain Supermart (SGS Marketing Corporation) and/or James Tan, Jack Tan and Jerry Tan to be guilty of labor only contracting; (2) ordering the respondents Shoppers Gains Supermart (SGS Marketing Corp.) and/or James Tan, Jack Tan and Jerry Tan, and Respondents (manpower agencies) Lipercon Services, Inc.; Golden Services, Inc.; Versatile Consultative and Radium Multi Resources to pay jointly and severally complainants the following: a) One (1) month backwages as a consequence of the illegal closure in the amount of P3,068.00 for each of the 34 complainants; (excluding Benilda Pableo) in the total amount of P104,312.00; b) Separation pay of one (1) month for every year of service (including complainant Pablito Esmas), in lieu of reinstatement as regular workers considering that reinstatement is no longer feasible due to the closure of the business of Shoppers Gain Supermarket in the following amounts of: 1. Warlito Acquiadan P18,408.00 xxx xxx xxx c) Underpayment of wages, unpaid salaries, 5 days service incentive leave with pay, proportionate 13th month pay and cash bond in the amount of P400.00 refund of Teresita Pangahin, in the following amounts of: [amounts omitted]; d) Ten (10%) Percent attorney's fees in the amount of P59,501.32 based on the total judgment award of P595,013.22; (3) Dismissing the complaint for unfair labor practice for lack of evidence." On appeal, the respondent NLRC affirmed the labor arbiter in the assailed Decision, with the following disposition: [3] "WHEREFORE, premises considered, the assailed decision is hereby affirmed with the modification that the amount of 13th month and service incentive leave pay already paid to the employees recruited and hired by respondent Lipercon Services, Inc. should be deducted from the amount due them as stated in the assailed decision." Hence, this recourse. The Issues The petition [4] as well as the petitioners' memorandum [5] allege the following grounds: I. "Public respondent gravely abused its discretion when it affirmed that there exist an employer-employee relationship between petitioner Corporation and respondents; II. "Public Respondent gravely abused its discretion when it declared respondents illegally dismissed by petitioner Corporation; III. "Public Respondent gravely abused its discretion in affirming that Pablito Esmas was not paid his separation pay without discussing said issue in the body of the decision; IV. "Public respondent gravely abused its discretion in holding petitioner Corporation liable for backwages, separation pay, underpayment, and attorney's fees; V. "Public respondent gravely abused its discretion in holding individual petitioner(s) James Tan, Jerry Tan, and Jack Tan jointly and severally liable with Petitioner Corporation for the above mentioned monetary obligations.;" The First and Pivotal Issue: Existence of Employer-Employee Relationship In affirming the findings of the labor