SECOND DIVISION

[G.R. No. 180045. November 17, 2010.]

GOVERNMENT SERVICE INSURANCE SYSTEM , petitioner, vs .

NATIONAL LABOR RELATIONS COMMISSION (NLRC), DIONISIO
BANLASAN, ALFREDO T. TAFALLA, TELESFORO D. RUBIA, ROGELIO
A. ALVAREZ, DOMINADOR A. ESCOBAL, and ROSAURO PANIS ,
respondents.

DECISION

NACHURA , J : p

This is a petition for review on certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Decision 1 and the Resolution 2 of the Court of
Appeals (CA) dated September 7, 2006 and September 27, 2007, respectively, in CA-
G.R. SP No. 50450.
The facts of the case are as follows:
Respondents Dionisio Banlasan, Alfredo T. Tafalla, Telesforo D. Rubia, Rogelio A.
Alvarez, Dominador A. Escobal, and Rosauro Panis were employed as security guards
by DNL Security Agency (DNL Security). By virtue of the service contract entered into by
DNL Security and petitioner Government Service Insurance System on May 1, 1978,
respondents were assigned to petitioner's Tacloban City o ce, each receiving a
monthly income of P1,400.00. Sometime in July 1989, petitioner voluntarily increased
respondents' monthly salary to P3,000.00. 3
In February 1993, DNL Security informed respondents that its service contract
with petitioner was terminated. This notwithstanding, DNL Security instructed
respondents to continue reporting for work to petitioner. Respondents worked as
instructed until April 20, 1993, but without receiving their wages; after which, they were
terminated from employment. 4
On June 15, 1995, respondents led with the National Labor Relations
Commission (NLRC), Regional Arbitration Branch No. VIII, Tacloban City, a complaint
against DNL Security and petitioner for illegal dismissal, separation pay, salary
differential, 13th month pay, and payment of unpaid salary.
On September 30, 1997, Labor Arbiter (LA) Benjamin S. Guimoc rendered a
decision 5 against DNL Security and petitioner, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in this manner[,] to wit: IHCESD

1. Finding no illegal dismissal of complainants;

2. Ordering respondent DNL Security Agency only to pay complainants
the amount of P176,130.00 representing separation pay; the
amount of P42,666.40 representing wages of complainants from
February 1993 to April 20, 1993;
3. Ordering as joint and solidary liability by the respondents DNL
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 Security Agency and GSIS the amount of P48,385.87 representing
salary differential[;] the amount of P55,564.92 as 13th month pay;
all in the aggregate sum of THREE HUNDRED TWENTY-TWO
THOUSAND SEVEN HUNDRED FORTY-SEVEN & 19/100
(P322,747.19) to be paid by both or either of the said respondent
within ten (10) days from receipt of this decision and to be
deposited with the cashier of this office for proper disposition.
SO ORDERED. 6

The LA found that respondents were not illegally terminated from employment
because the employment of security guards is dependent on the service contract
between the security agency and its client. However, considering that respondents had
been out of work for a long period, and consonant with the principle of social justice,
the LA awarded respondents with separation pay equivalent to one (1) month salary for
every year of service, to be paid by DNL Security. Because DNL Security instructed
respondents to continue working for petitioner from February 1993 to April 20, 1993,
DNL Security was also made to pay respondents' wages for the period. The LA further
granted respondents' claim of salary differential, as they were paid wages below the
minimum wage, as well as 13th month pay. For these monetary awards, petitioner was
made solidarily liable with DNL Security, as the indirect employer of respondents. 7
DNL Security led a motion for reconsideration, while petitioner appealed to the
NLRC. 8
In a resolution 9 dated December 9, 1997, the NLRC treated DNL Security's
motion for reconsideration as an appeal, but dismissed the same, as it was not legally
perfected. It likewise dismissed petitioner's appeal, having been led beyond the
reglementary period.
Undaunted, petitioner led a petition for certiorari under Rule 65 of the Rules of
Court before the CA. On September 7, 2006, the CA rendered the assailed Decision 1 0
a rming the NLRC ruling. Petitioner's motion for reconsideration was denied by the CA
on September 27, 2007.
Hence, the present petition raising the following errors:
The Court of Appeals committed a reversible error in nding that
the public respondent NLRC did not commit grave abuse of discretion
amounting to lack or excess of jurisdiction in dismissing the appeal of
the petitioner GSIS, considering that:

1. The Court of Appeals disregarded the facts and

circumstances evidencing the timeliness of the petitioner GSIS' appeal
before the NLRC and sacri ced substantial justice in the altar of
dubious technicalities; and

2. The Court of Appeals misapplied the law and mistakenly

a rmed the public respondent NLRC's decision that the petitioner GSIS
is jointly and severally liable with DNL Security Agency for payment of
the unsubstantiated amounts of Salary Differentials and the 13th
Month Pay to the private respondent security guards. 1 1 TAIESD

Petitioner insists that its appeal before the NLRC was led on time, having been
led through registered mail on October 27, 1997, as evidenced by Registry Receipt No.
34581 countersigned by the postmaster. It adds that, even assuming that the appeal
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 was indeed led one day late, the NLRC should not have strictly applied the Rules in
order to effect substantial justice. Petitioner also claims that although the body of the
LA decision made DNL Security solely liable for respondents' wages from February
1993 to April 20, 1993, and for their separation pay, the dispositive portion thereof
made petitioner solidarity liable for said awards. Petitioner further questions the award
of monetary bene ts for lack of evidence to substantiate said claims. Lastly, petitioner
argues that the enforcement of the decision is impossible, considering that petitioner's
charter unequivocally exempts it from execution. 1 2
We partly grant the petition.
The resolution of the petition before us involves the appreciation and
determination of factual matters, mainly on the issue of whether petitioner's appeal
was seasonably filed before the NLRC.
Timeliness of an appeal is a factual issue. It requires a review or evaluation of the
evidence which would show when the appeal was actually mailed to and received by the
NLRC. 1 3 In this case, to prove that it mailed the notice of appeal and appeal
memorandum on October 27, 1997, instead of October 28, 1997, as shown by the
stamped date on the envelope, petitioner presented Registry Receipt No. 34581
bearing the earlier date.
Under Section 3, Rule 13 of the Rules of Court, where the ling of pleadings,
appearances, motions, notices, orders, judgments, and all other papers with the
court/tribunal is made by registered mail, the date of mailing, as shown by the post
o ce stamp on the envelope or the registry receipt, shall be considered as the date of
filing. 1 4
Thus, the date of ling is determinable from two sources: from the post o ce
stamp on the envelope or from the registry receipt, either of which may su ce to prove
the timeliness of the ling of the pleadings. If the date stamped on one is earlier than
the other, the former may be accepted as the date of ling. This presupposes, however,
that the envelope or registry receipt and the dates appearing thereon are duly
authenticated before the tribunal where they are presented. 1 5
In any case, even if the appeal was led one day late, the same should have been
entertained by the NLRC. Indeed, the appeal must be perfected within the statutory or
reglementary period. This is not only mandatory, but also jurisdictional. Failure to
perfect the appeal on time renders the assailed decision nal and executory and
deprives the appellate court or body of the legal authority to alter the nal judgment,
much less entertain the appeal. However, this Court has, time and again, ruled that, in
exceptional cases, a belated appeal may be given due course if greater injustice will be
visited upon the party should the appeal be denied. The Court has allowed this
extraordinary measure even at the expense of sacri cing order and e ciency if only to
serve the greater principles of substantial justice and equity. 1 6
Technicality should not be allowed to stand in the way of equitably and
completely resolving the rights and obligations of the parties. We have consistently
held that technical rules are not binding in labor cases and are not to be applied strictly
if the result would be detrimental to the working man. 1 7
The Court notes, however, that while the CA a rmed the dismissal by the NLRC
of petitioner's appeal for being led out of time, it nonetheless delved into the merits of
the case. This notwithstanding, we do not entirely agree with the appellate court's
conclusion affirming in toto the LA decision.
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 In this case, the LA's discussion of the issues appears to be in con ict with his
nal conclusion. This would have required a measure of clari cation. But instead of
looking into the errors allegedly committed by the LA, the NLRC dismissed the appeal
on a mere technicality. The CA likewise failed to correct the apparent mistake in the LA
decision. Thus, we are constrained to review the merits of the case. DTAcIa

We need not discuss DNL Security's responsibility as respondents' direct

employer because DNL Security's failure to interpose an appeal from the LA decision
has resulted in the nality of the LA decision. The only issue that we should resolve is
the matter of petitioner's liability as indirect employer.
The fact that there is no actual and direct employer-employee relationship
between petitioner and respondents does not absolve the former from liability for the
latter's monetary claims. When petitioner contracted DNL Security's services, petitioner
became an indirect employer of respondents, pursuant to Article 107 of the Labor
Code, which reads:
ART. 107. Indirect employer. — The provisions of the immediately
preceding Article shall likewise apply to any person, partnership, association or
corporation which, not being an employer, contracts with an independent
contractor for the performance of any work, task, job or project.

After DNL Security failed to pay respondents the correct wages and other
monetary bene ts, petitioner, as principal, became jointly and severally liable, as
provided in Articles 106 and 109 of the Labor Code, which state:
ART. 106. Contractor or subcontractor. — Whenever an employer enters
into a contract with another person for the performance of the former's work, the
employees of the contractor and of the latter's subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of
his employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him. . . . .

xxx xxx xxx

ART. 109. Solidary liability. — The provisions of existing laws to the
contrary notwithstanding, every employer or indirect employer shall be held
responsible with his contractor or subcontractor for any violation of any provision
of this Code. For purposes of determining the extent of their civil liability under
this Chapter, they shall be considered as direct employers.

This statutory scheme is designed to give the workers ample protection,

consonant with labor and social justice provisions of the 1987 Constitution. 1 8
This Court's pronouncement in Rosewood Processing, Inc. v. NLRC 19 is
noteworthy:
The joint and several liability of the employer or principal was enacted to
ensure compliance with the provisions of the Code, principally those on statutory
minimum wage. The contractor or subcontractor is made liable by virtue of his or
her status as a direct employer, and the principal as the indirect employer of the
contractor's employees. This liability facilitates, if not guarantees, payment of the
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 workers' compensation, thus, giving the workers ample protection as mandated
by the 1987 Constitution. This is not unduly burdensome to the employer. Should
the indirect employer be constrained to pay the workers, it can recover whatever
amount it had paid in accordance with the terms of the service contract between
itself and the contractor. 2 0

Petitioner's liability covers the payment of respondents' salary differential and

13th month pay during the time they worked for petitioner. In addition, petitioner is
solidarily liable with DNL Security for respondents' unpaid wages from February 1993
until April 20, 1993. While it is true that respondents continued working for petitioner
after the expiration of their contract, based on the instruction of DNL Security, petitioner
did not object to such assignment and allowed respondents to render service. Thus,
petitioner impliedly approved the extension of respondents' services. Accordingly,
petitioner is bound by the provisions of the Labor Code on indirect employment.
Petitioner cannot be allowed to deny its obligation to respondents after it had
bene ted from their services. So long as the work, task, job, or project has been
performed for petitioner's bene t or on its behalf, the liability accrues for such services.
2 1 The principal is made liable to its indirect employees because, after all, it can protect
itself from irresponsible contractors by withholding payment of such sums that are due
the employees and by paying the employees directly, or by requiring a bond from the
contractor or subcontractor for this purpose. 2 2 IDETCA

Petitioner's liability, however, cannot extend to the payment of separation pay. An

order to pay separation pay is invested with a punitive character, such that an indirect
employer should not be made liable without a nding that it had conspired in the illegal
dismissal of the employees. 2 3
It should be understood, though, that the solidary liability of petitioner does not
preclude the application of Article 1217 of the Civil Code on the right of reimbursement
from its co-debtor, viz.: 2 4
Art. 1217. Payment made by one of the solidary debtors extinguishes
the obligation. If two or more solidary debtors offer to pay, the creditor may
choose which offer to accept.

He who made the payment may claim from his co-debtors only the share
which corresponds to each, with the interest for the payment already made. If the
payment is made before the debt is due, no interest for the intervening period may
be demanded.
When one of the solidary debtors cannot, because of his insolvency,
reimburse his share to the debtor paying the obligation, such share shall be borne
by all his co-debtors, in proportion to the debt of each.

Lastly, we do not agree with petitioner that the enforcement of the decision is
impossible because its charter unequivocally exempts it from execution. As held in
Government Service Insurance System v. Regional Trial Court of Pasig City, Branch 71 ,
2 5 citing Rubia v. GSIS: 2 6

The processual exemption of the GSIS funds and properties under Section
39 of the GSIS Charter, in our view, should be read consistently with its avowed
principal purpose: to maintain actuarial solvency of the GSIS in the protection of
assets which are to be used to nance the retirement, disability and life insurance
bene ts of its members. Clearly, the exemption should be limited to the purposes
and objects covered. Any interpretation that would give it an expansive
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 construction to exempt all GSIS assets from legal processes absolutely would be
unwarranted.
Furthermore, the declared policy of the State in Section 39 of the GSIS
Charter granting GSIS an exemption from tax, lien, attachment, levy, execution,
and other legal processes should be read together with the grant of power to the
GSIS to invest its "excess funds" under Section 36 of the same Act. Under Section
36, the GSIS is granted the ancillary power to invest in business and other
ventures for the bene t of the employees, by using its excess funds for
investment purposes. In the exercise of such function and power, the GSIS is
allowed to assume a character similar to a private corporation. Thus, it may sue
and be sued, as also, explicitly granted by its charter . . . . 2 7

To be sure, petitioner's charter should not be used to evade its liabilities to its
employees, even to its indirect employees, as mandated by the Labor Code.
WHEREFORE , premises considered, the Court of Appeals Decision and
Resolution dated September 7, 2006 and September 27, 2007, respectively, in CA-G.R.
SP No. 50450, are AFFIRMED with MODIFICATION . Petitioner Government Service
Insurance System is declared solidarily liable with DNL Security to PAY respondents
their wage differentials, thirteenth month pay, and unpaid wages from February 1993 to
April 20, 1993, but is EXONERATED from the payment of respondents' separation pay.
TaISEH

SO ORDERED.
Carpio, Peralta, Abad and Mendoza, JJ., concur.

Footnotes
1.Penned by Associate Justice Romeo F. Barza, with Associate Justices Isaias P. Dicdican and
Priscilla Baltazar-Padilla, concurring; rollo, pp. 35-47.
2.Id. at 48-49.
3.Id. at 60.

4.Id.
5.Id. at 58-67.
6.Id. at 66-67.
7.Id. at 62-67.

8.Id. at 79.
9.Penned by Presiding Commissioner Irenea Ceniza, with Commissioners Bernabe S. Batuhan
and Amorito V. Cañete, concurring; id. at 77-81.

10.Supra note 1.
11.Rollo, pp. 15-16.
12.Id. at 16-30.
13.Mangahas v. Court of Appeals, G.R. No. 173375, September 25, 2008, 566 SCRA 373, 389.

14.San Miguel Corporation v. NLRC, 259 Phil. 765, 769 (1989).

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 15.Id. at 769.

16.ABS-CBN Broadcasting Corporation v. Nazareno, G.R. No. 164156, September 26, 2006, 503
SCRA 204, 221.

17.Id. at 221-222.
18.Manila Electric Company v. Benamira, 501 Phil. 621, 644 (2005); Mariveles Shipyard Corp. v.
Court of Appeals, 461 Phil. 249, 267 (2003).
19.352 Phil. 1013 (1998).
20.Id. at 1033-1034. (Citations omitted.)
21.New Golden City Builders & Dev't. Corp. v. CA, 463 Phil. 821, 833 (2003); id. at 1034.
22.Rosewood Processing, Inc. v. NLRC, supra, at 1034.

23.Id. at 1035.
24.Manila Electric Company v. Benamira, supra note 18, at 645.
25.G.R. Nos. 175393 and 177731, December 18, 2009, 608 SCRA 552.
26.476 Phil. 623 (2004).
27.Government Service Insurance System v. Regional Trial Court of Pasig City, Branch 71,
supra note 25, at 583-584. (Citations omitted.)

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