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RepublicofthePhilippines
SUPREMECOURT
FIRSTDIVISION
G.R.No.166302.July28,2005
LOTTEPHIL.CO.,INC.,Petitioners,
vs.
ERLINDA DELA CRUZ, LEONOR MAMAUAG, LOURDES CAUBA, JOSEPHINE DOMANAIS, ARLENE
CAGAYAT, AMELITA YAM, VIVIAN DOMARAIS, MARILYN ANTALAN, CHRISTOPHER RAMIREZ, ARNOLD
SAN PEDRO, MARISSA SAN PEDRO, LORELI JIMENEZ, JEFFREY BUENO, CHRISTOPHER CAGAYAT,
GERARD CABILES, JOAN ENRIQUEZ, JOSEPH DE LA CRUZ, NELLY CLERIGO, DULCE NAVARETTE,
ROWENABELLO,DANIELRAMIREZ,AILEENBAUTISTAandBALTAZARFERRERA,Respondents.
DECISION
YNARESSANTIAGO,J.:
Thispetitionforreviewoncertiorari1assailstheJuly9,2004decision2oftheCourtofAppealsinCAG.R.SPNo.
72732anditsNovember26,2004resolution3denyingreconsiderationthereof.
Theestablishedfactsofthiscaseareasfollows:
Privaterespondent(petitionerherein)LottePhils.,Inc.(Lotte)isadomesticcorporation.Petitioners(respondents
herein) are among those who were hired and assigned to the confectionery facility operated by private
respondent.
On December 14, 1995 and yearly thereafter until the year 2000 7J Maintenance and Janitorial Services
("7J") entered into a contract with private respondent to provide manpower for needed maintenance, utility,
janitorialandotherservicestothelatter.Incompliancewiththetermsandconditionsoftheservicecontract,and
to accommodate the needs of private respondent for personnel/workers to do and perform "piece works,"
petitioners,amongothers,werehiredandassignedtoprivaterespondentasrepackersorsealers.
However, either in October, 1999 or on February 9, 2000, private respondent dispensed with their services
allegedly due to the expiration/termination of the service contract by respondent with 7J. They were either told
"hwag muna kayong pumasok at tatawagan na lang kung may gawa" or were asked to wait "pag magrereport
silasatrabaho."Unfortunately,petitionerswerenevercalledbacktoworkagain.
Aggrieved,petitionerslodgedalaborcomplaintagainstbothprivaterespondentLotteand7J,forillegaldismissal,
regularization,paymentofcorrespondingbackwagesandrelatedemploymentbenefits,13thmonthpay,service
incentiveleave,moralandexemplarydamagesandattorneysfeesbasedontotaljudgmentaward.4
OnFebruary28,2001,LaborArbiterCresencioG.Ramos,Jr.,renderedjudgment5declaring7Jasemployerof
respondents.6 The arbiter also found 7J guilty of illegal dismissal7 and ordered to reinstate respondents,8 pay
P2,374,710.00asbackwages,P713,648.00as13thmonthpayandP117,000.00asserviceincentiveleavepay.9
Respondents appealed to the National Labor Relations Commission (NLRC) praying that Lotte be declared as
their direct employer because 7J is merely a laboronly contractor. In its decision10 dated April 24, 2002, the
NLRC found no cogent reason to disturb the findings of the labor arbiter and affirmed its ruling that 7J is the
employerofrespondentsandsolelyliablefortheirclaims.
RespondentsmotionforreconsiderationwasdeniedbytheNLRCinaresolutiondatedJune18,2002.
Undaunted,theyfiledapetitionforcertiorariintheCourtofAppeals11againsttheNLRCandLotte,insistingthat
theiremployerisLotteandnot7J.
Lotte,however,deniedthatrespondentswereitsemployees.Itprayedthatthepetitionbedismissedforfailureto
implead7Jwhoisapartyinterestedinsustainingtheproceedingsincourt,pursuanttoSection3,Rule46ofthe
RevisedRulesofCivilProcedure.
OnJuly9,2004,theCourtofAppealsreversedandsetasidetherulingsoftheLaborArbiterandtheNLRC.Inits
decision,theCourtofAppealsdeclaredLotteastherealemployerofrespondentsandthat7Jwhoengagedin
laboronly contracting was merely the agent of Lotte. Respondents who performed activities directly related to
LottesbusinesswereitsregularemployeesunderArt.280oftheLaborCode.Assuch,theymustbeaccorded

securityoftenureandtheirservicesterminatedonlyon"just"and"authorized"causes.
Lottesmotionforreconsiderationwasdenied,hencethispetition,onthefollowingissues:
8. Whether or not petitioner herein had the burden of proof to establish before the proceedings in the Court of
Appealsthat7JMaintenanceandJanitorialServicewasnotalaboronlycontractor.
8.1.WhetherornotthePetitioninCAG.R.SPNo.72732isdismissibleforfailuretocomplywithSection3,Rule
46inrelationtoSection5,Rule65ofthe1997RulesofCivilProcedure.12
We first resolve the procedural issue raised by petitioner. Lotte asserts that 7J is an indispensable party and
shouldhavebeenimpleadedinrespondentspetitionintheCourtofAppeals.Itclaimsthatthepetitionbeforethe
CourtofAppealswasdismissibleforfailuretocomplywithSection3,13Rule46inrelationtoSection514ofRule
65oftheRevisedRulesofCivilProcedure.
Petitionerscontentionistenable.
Anindispensablepartyisapartyininterestwithoutwhomnofinaldeterminationcanbehadofanaction,15and
whoshallbejoinedeitherasplaintiffsordefendants.16Thejoinderofindispensablepartiesismandatory.17The
presence of indispensable parties is necessary to vest the court with jurisdiction, which is "the authority to hear
anddetermineacause,therighttoactinacase".18Thus,withoutthepresenceofindispensablepartiestoasuit
orproceeding,judgmentofacourtcannotattainrealfinality.19Theabsenceofanindispensablepartyrendersall
subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but
evenastothosepresent.20
Inthecaseatbar,7Jisanindispensableparty.Itisapartyininterestbecauseitwillbeaffectedbytheoutcome
of the case. The Labor Arbiter and the NLRC found 7J to be solely liable as the employer of respondents. The
Court of Appeals however rendered Lotte jointly and severally liable with 7J who was not impleaded by holding
thattheformeristherealemployerofrespondents.Plainly,itsdecisiondirectlyaffected7J.
InDomingov.Scheer,21weheldthatthenonjoinderofindispensablepartiesisnotagroundforthedismissalof
anaction22andtheremedyistoimpleadthenonpartyclaimedtobeindispensable.23Partiesmaybeaddedby
orderofthecourtonmotionofthepartyoronitsowninitiativeatanystageoftheactionand/orsuchtimesasare
just. If the petitioner refuses to implead an indispensable party despite the order of the court, the latter may
dismissthecomplaint/petitionforthepetitioner/plaintiffsfailuretocomplytherefor.24
Although7JwasacopartyinthecasebeforetheLaborArbiterandtheNLRC,respondentsfailedtoincludeitin
theirpetitionforcertiorariintheCourtofAppeals.Hence,theCourtofAppealsdidnotacquirejurisdictionover7J.
Nofinalrulingonthismattercanbehadwithoutimpleading7J,whoseinclusionisnecessaryfortheeffectiveand
completeresolutionofthecaseandinordertoaccordallpartieswithdueprocessandfairplay.
Inlightoftheforegoing,theCourtseesnoneedtodiscussthesecondissueraisedbypetitioner.
WHEREFORE,theJuly9,2004decisionoftheCourtofAppealsinCAG.R.SPNo.72732andtheNovember26,
2004resolution,areSETASIDE.LetthecasebeREMANDEDtotheCourtofAppealstoinclude7JMaintenance
andJanitorialServicesasanindispensablepartytothecaseforfurtherproceedings.
SOORDERED.
Davide,Jr.,C.J.,(Chairman),Quisumbing,Carpio,andAzcuna,JJ.,concur.

Footnotes
1Rollo,pp.924.
2Id.at2635pennedbyAssociateJusticeRubenT.Reyes,withAssociateJusticesPerlitaJ.TriaTirona

andJoseC.Reyes,Jr.,concurring.
3Id.at3738.
4Id.at2728.
5Id.at4054.
6Id.at51.
7Id.at53.
8ExceptJosephdelaCruz.