What is the statutory basis for an employers subsidiary liability?

The statutory basis for an employers subsidiary liability is found in Article 103 of the Revised Penal Code, which provides:
Art. 103. Subsidiary civil liability of other persons. — The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons, and corporations engaged in any kind of industry for felonies committed by the servants, pupils, workmen, apprentices, or employees in the discharge of their duties.

■ Under Article 103 of the Revised Penal Code, liability originates from a delict committed by the employee who is primarily liable therefor and upon whose primary liability his employer's subsidiary liability is to be based. Before the employer's subsidiary liability may be proceeded against, it is imperative that there should be a criminal action whereby the employee's criminal negligence or delict and corresponding liability therefor are proved. If no criminal action was instituted, the employer's liability would not be predicated under Article 103. 

In the case at bar, no criminal action was instituted because the person who should stand as the accused and the party supposed to be primarily liable for the damages suffered by private respondents as a consequence of the vehicular mishap died. Thus, petitioners' subsidiary liability has no leg to stand on considering that their liability is merely secondary to their employee's primary liability. Logically therefore, recourse under this remedy is not possible. (Sps. Franco vs. Intermediate Appellate Court, G.R. No. 71137, October 5, 1989) 


 ■ Respondent appellate court relies on the case of Arambulo, supra, where it was held that the defense of observance of due diligence of a good father of a family in the selection and supervision of employees is not applicable to the subsidiary liability provided in Article 20 of the Penal Code (now Article 103 of the Revised Penal Code). By such reliance, it would seem that respondent appellate court seeks to enforce the subsidiary civil liability of the employer without a criminal conviction of the party primarily liable therefor. This is not only erroneous and absurd but is also fraught with dangerous consequences. It is erroneous because the conviction of the employee primarily liable is a condition sine qua non for the employer's subsidiary liability and, at the same time, absurd because we will be faced with a situation where the employer is held subsidiarily liable even without a primary liability being previously established. It is likewise dangerous because, in effect, the employer's subsidiary liability would partake of a solidary obligation resulting in the law's amendment without legislative sanction. (Sps. Franco vs. Intermediate Appellate Court)


What are the requisites for the execution of the award of subsidiary liability against the employer?

The statutory basis for an employers subsidiary liability is found in Article 103 of the Revised Penal Code. This liability is enforceable in the same criminal proceeding where the award is made. However, before execution against an employer ensues, there must be a determination, in a hearing set for the purpose of:

1) the existence of an employer-employee relationship; 
2) that the employer is engaged in some kind of industry; 
3) that the employee is adjudged guilty of the wrongful act and found to have committed the offense in the discharge of his duties (not necessarily any offense he commits "while" in the discharge of such duties; and 


When the existence of the employer-employee relationship be determined?

There are two instances when the existence of an employer-employee relationship of an accused driver and the alleged vehicle owner may be determined. One during the criminal proceeding, and the other, during the proceeding for the execution of the judgment. In both instances, petitioner should be given the opportunity to be heard, which is the essence of due process. (Basilio vs. Court of Appeals)