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RepublicofthePhilippines

SupremeCourt
Manila
SECONDDIVISION

JUDYO.DACUITAL,1[1]EUGENIOL.
MONDANO,JR.,JOSEPHGALER,2[2]
MARIANOMORALES,ROBERTO
RUANCE,JOSEPHPORCADILLA,
RAULITOPALAD,RICARDO
DIGAMON,NONITOPRISCO,
EULOGIOM.TUTOR,MELVIN
PEPITO,HELYTON.REYES,3[3]
RANDOLFC.BALUDO,ALBERTO
EPONDOL,RODELOA.SUSPER,4[4]
EVARISTOVIGORI,5[5]JONATHANP.
AYAAY,FELIPEERILLA,ARISA.
GARCIA,ROYA.GARCIA,and
RESTITUTOTAPANAN,

G.R. No.
176748

1*AdditionalmemberinlieuofAssociateJusticeDiosdadoM.PeraltaperSpecialOrderNo.882datedAugust31,
2010.[1]
AlsoreferredtointherecordsasJudyO.Daquital.

2[2]
3[3]
4[4]
5[5]

Also
Also
Also
Also

referred
referred
referred
referred

to
to
to
to

in
in
in
in

the
the
the
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records
records
records
records

as
as
as
as

Joseph Goles.
Helyton Reyes.
Ridolo A. Susper.
Evaristo Vigor.

Petitioners,

versus

Present:

L.M.CAMUSENGINEERING
CORPORATIONand/orLUISM.
CAMUS,

CARPIO,J.,
Chairperson,

Respondents.

NACHURA,

BERSAMIN,*
ABAD,and
MENDOZA,JJ.

Promulgated:

September1,2010

x------------------------------------------------------------------------------------x

DECISION

NACHURA,J.:

ThisisaPetitionforReviewon Certiorari underRule45oftheRulesof


Court,assailingtheCourtofAppeals(CA)Decision 6[6]datedSeptember25,2006
andResolution7[7]datedFebruary14,2007inCAG.R.SPNo.90377.

Thecasestemmedfromthefollowingfactualandproceduralantecedents:

RespondentL.M.CamusEngineeringCorporation(LMCEC)isadomestic
corporationdulyorganizedandexistingunderandbyvirtueofPhilippinelaws,
engaged in construction, engineering, and airconditioning business; while
respondentLuisM.Camus(Camus)isthecompanypresident.

6[6] Penned by Associate Justice Jose L. Sabio, Jr., with Associate Justices
Regalado E. Maambong and Ramon M. Bato, Jr., concurring; rollo, pp. 33-56.
7[7] Id. at 88-89.

PetitionersJudyO.Dacuital(Dacuital),EugenioL.Mondano,Jr.,Joseph
Galer (Galer), Mariano Morales, Roberto Ruance (Ruance), Joseph Porcadilla,
RaulitoPalad(Palad),RicardoDigamon(Digamon),NonitoPrisco,EulogioM.
Tutor, Melvin Pepito, Helyto N. Reyes (Reyes), Randolf C. Baludo (Baludo),
AlbertoEpondol,RodeloA.Susper,EvaristoVigori,JonathanP.Ayaay,Felipe
Erilla, Aris A. Garcia (Aris), Roy A. Garcia (Roy), and Restituto Tapanan
(Tapanan)werehiredbyLMCECaswelder,tinsmith,pipefitter,andmechanical
employees.8[8]

DuringthemonthsofJanuary,FebruaryandMarch2001,petitionerswere
requiredbyLMCECtosurrendertheiridentificationcardsandATMcardsand
wereorderedtoexecutecontractsofemployment.Mostofthepetitionersdidnot
complywiththedirectiveastheybelievedthatitwasonlyrespondentsstrategyto
get rid of petitioners regular status since they would become new employees
disregarding their length of service. Petitioners were later dismissed from
employment.9[9]

Hence, the complaint for illegal dismissal and nonpayment of monetary


benefits filed by petitioners and other LMCEC employees who were similarly
situated,namely:GuillermoS.Lucas(Lucas),AlvinBontugay,RectorPalajos,and
Hermes B.Pacatang (Pacatang),against respondents beforetheNationalLabor
RelationsCommission(NLRC).Theemployeesallegedthattheywereillegally
8[8] Id. at 35-36.
9[9] Id. at 94.

dismissed from employment and that their employer failed to pay them their
holidaypay,premiumpayforholiday,restday,serviceincentiveleavepay,and
13thmonthpayduringtheexistenceanddurationoftheiremployment.Theyalso
averredthattheywerenotprovidedwithsickandvacationleaves.10[10]

Respondents denied that petitioners were illegally dismissed from


employment.Theyclaimedthatpetitionerswereprojectemployeesand,uponthe
completionofeachproject,theywereservednoticesofprojectcompletion. 11[11]
They clarified that the termination of petitioners employment was due to the
completionoftheprojectsforwhichtheywerehired.12[12]

Petitioners,however,counteredthattheywereregularemployeesasthey
hadbeenengagedtoperformactivitieswhichareusuallynecessaryordesirablein
theusual business or tradeof LMCEC. They deniedthattheywereproject or
contractual employees because their employment was continuous and
uninterruptedformorethanone(1)year.Finally,theymaintainedthattheywere
partofaworkpoolfromwhichLMCECdrewitsworkersforitsvariousprojects. 13
[13]

10[10] Id. at 93.


11[11] Id. at 94-95.
12[12] Id. at 97.
13[13] Id. at 95-96.

OnJuly24,2002,LaborArbiter(LA)LiliaS.Savarirenderedadecision, 14
[14]thedispositiveportionofwhichreads:

WHEREFORE, a Decision is hereby rendered declaring the dismissal of the


complainantsillegal.Corollarily,exceptforcomplainantHelytoN.Reyes,whohasvoluntarily
withdrawnhiscaseagainsttherespondents,alltheothercomplainantsareherebyorderedtoreport
torespondentsforreinstatementbutwithoutbackwages.

Allotherclaimsaredismissedforlackofmerit.

SOORDERED.15[15]

TheLAdidnotgivecredencetorespondentsclaimthatpetitionerswere
projectemployeesbecauseoftheformersfailuretopresentevidenceshowingthat
petitioners contracts of employment reflected the duration of each project for
whichtheywereemployedandthatrespondentsdulyreportedtotheDepartment
of Labor and Employment every termination of employment and project. As
petitioners dismissal was without just and valid cause, the LA ruled that their
termination from employment was illegal. However, the LA refused to award
backwagesandothermonetaryclaimsonthegroundthatpetitionersemployment
wasnotcontinuousastheybelongedtotheregularworkpoolofLMCEC.16[16]

TheemployeesjointlyfiledapartialappealtotheNLRC,exceptPacatang
andLucaswhofiledtheirseparateappeal.Ontheotherhand,theAdministrative
14[14] CA rollo, pp. 136-145.
15[15] Id. at 145.
16[16] Rollo, pp. 97-98.

OfficerofLMCECissuedindividualcommunicationstopetitionersdirectingtheir
reinstatementpursuanttotheLAdecision.17[17]

OnJune9,2004,theNLRCmodified18[18]theLAdecision,thedispositive
portionofwhichreads:

WHEREFORE, the employees enumerated above are hereby ordered reinstated with
limitedbackwages,withoutlossofseniorityrightsandotherprivileges.

ThecomputationdivisionoftheRABNCRisherebyorderedtocomputetheawardas
hereinestablished.

SOORDERED.19[19]

TheNLRCagreedwiththeLAthatpetitionerswereillegallydismissedfrom
employment. As a consequence of this pronouncement, the tribunal deemed it
propernotonlytoreinstatethemtotheiroriginalpositionbutalsotogivethem
theirbackwages.However,inviewofthedelayedresolutionofthecasethatcould
notbeattributedtorespondents,theNLRClimitedtheawardofbackwagesfrom
thedateofdismissaluptosix(6)monthsafterthecasewaselevatedonappealon

17[17] CA rollo, pp. 303-346.


18[18] Embodied in a decision rendered by the First Division. Penned by
Commissioner Ernesto S. Dinopol, with Presiding Commissioner Roy V. Seeres
and Commissioner Romeo L. Go, concurring; rollo, pp. 99-115.
19[19] Id. at 114.

September23,2002.20[20]TheappealfiledbyPacatangandLucaswasdismissed
forhavingbeenfiledoutoftime.

Respondents and complainants Pacatang and Lucas moved for the


reconsiderationoftheNLRCdecision.InaResolution 21[21]datedApril11,2005,
theNLRCdeniedthemotionforreconsiderationfiledbyrespondents,butgranted
thatofPacatangandLucas,therebyentitlingthelattertoreceivebackwages.

Petitionerssubsequentlymovedfor theexecutionof theNLRCdecision.


Respondents,however,filedaClarificatoryMotionandOppositiontotheMotion
forIssuanceofEntryofJudgmentandWritofExecutionandforRecomputationof
theMonetaryAward22[22]inviewofrespondentspetitionbeforetheCAandthe
reinstatementofsomeoftheemployees.

InanOrder23[23]datedAugust23,2005,theNLRCgrantedthemotion.The
NLRC took into consideration the fact that some of the employees who were
earlierdismissedfromemploymenthadactuallybeenreinstated.Hence,itlimited
the award of backwages from illegal dismissal up to the date of actual

20[20]
21[21]
22[22]
23[23]

Id. at 107-114.
CA rollo, pp. 274-278.
Id. at 434-437.
Id. at 438-440.

reinstatement.TheseemployeeswhowereactuallyreinstatedwereGaler,Ruance,
Palad,Digamon,Aris,Roy,andBaludo.24[24]

Inthemeantime,intheirpetitionbeforetheCA,respondentsobtaineda
favorabledecisionwhentheappellatecourtdeclaredpetitionersterminationfrom
employmentvalidandlegalandconsequentlysetasidetheawardofbackwages. 25
[25]Thepertinentportionofthedecisionreads:

INVIEWWHEREOF,thePetitionisGRANTED.TheassailedDecision(datedJune9,
2004)oftheNationalLaborRelationsCommissionisherebyMODIFIED.Theterminationfrom
employment of the public respondents herein are declared valid and legal. Their award of
backwagescomputedfromthedateoftheirterminationare(sic)SETASIDE.

SOORDERED.26[26]

ContrarytotheconclusionsoftheLAandtheNLRC,theCAheldthat
petitionerswereprojectemployeesastheiremploymentcontractsprovidedthat
their respective tenures of employment were dependent on the duration of the
construction projects. As such employees, their employment could lawfully be
terminated upon the completion of the project for which they were hired.
Consequently, there was no illegal dismissal.27[27] Petitioners motion for
reconsiderationwasdeniedonFebruary14,2007.28[28]

24[24]
25[25]
26[26]
27[27]
28[28]

Id. at 439.
Supra note 6.
Id. at 55.
Id. at 52-55.
Supra note 7.


Aggrieved,petitionerscometousseekingareviewoftheCADecision,
anchoredonthefollowingissues:

I.

II.

Whether or not the Findings of the Honorable Labor Arbiter as affirmed by the
HonorableNationalLaborRelationsCommissionshouldbeaccordedhighrespectand
finality.
WhetherornotPetitionerswereregularemployeesofrespondentCorporation.

III.

WhetherornotComplainantswereillegallydismissedfromtheiremployment.29[29]

PetitionersaverthattheCAerredincompletelydisregardingthefindingsof
theLA,asaffirmedbytheNLRC,inviewofthesettledrulethatfindingsoffact
andconclusionsof lawofquasijudicialagenciesliketheNLRCaregenerally
entitledtogreatrespectandevenfinality.Theyalsoinsistthattheywereregular
employees,consideringthattheservicestheyrenderedwerenotonlynecessarybut
alsoindispensabletoLMCECsbusiness.Theylikewiseclaimthattheyhadbeenin
theserviceforacontinuousperiodandaconsiderablelengthoftime,andarein
fact members of a work pool from which LMCEC draws its workers for its
projects. Hence, even if they were initially hired as project employees, they
eventuallyattainedthestatusofregularemployees.Petitionersalsoinsistthatthey
wereillegallydismissedastheiremploymentwasterminatedwithoutjustandvalid
cause,andwithoutaffordingthemdueprocessoflaw.Lastly,petitionersclaimthat
29[29] Rollo, p. 432.

theNLRChadpreviouslyrendereddecisionsinfavorofLMCECemployeeswho
weresimilarlysituated,hence,theircaseshouldalsobedecidedinfavoroflabor. 30
[30]

Thepetitionismeritorious.

Wediscussfirsttheproceduralissues.

Respondents point out that the decision of the LA had attained finality,
except as to Palad, because of their failure to appeal. They explain that the
MemorandumonAppealfiledwiththeNLRCwasverifiedonlybyPaladwithout
statingthereinthathediditinrepresentationoftheotherpetitioners.Inviewofthe
finalityoftheNLRCdecision,theinstantpetitionshouldnotprosper.

Wedonotagree.

Our pronouncement in Pacquing v. CocaCola Philippines, Inc.31[31] is


instructive.
30[30] Id. at 432-443.
31[31] G.R. No. 157966, January 31, 2008, 543 SCRA 344.


AstothedefectiveverificationintheappealmemorandumbeforetheNLRC,thesame
liberalityapplies.Afterall,therequirementregardingverificationofapleadingisformal,not
jurisdictional.Suchrequirementissimplyaconditionaffectingtheformofpleading,thenon
complianceofwhichdoesnotnecessarilyrenderthepleadingfatallydefective.Verificationis
simplyintendedtosecureanassurancethattheallegationsinthepleadingaretrueandcorrectand
nottheproductoftheimaginationoramatterofspeculation,andthatthepleadingisfiledingood
faith.Thecourtortribunalmayorderthecorrectionofthepleadingifverificationislackingoract
onthe pleadingalthoughit isnot verified, iftheattendingcircumstancesaresuch that strict
compliancewiththerulesmaybedispensedwithinorderthattheendsofjusticemaytherebybe
served.

Moreover,nolessthantheLaborCodedirectslaborofficialstousereasonablemeansto
ascertainthefactsspeedilyandobjectively,withlittleregardtotechnicalitiesorformalities;while
Section10,RuleVIIoftheNewRulesofProcedureoftheNLRCprovidesthattechnicalrulesare
notbinding.Indeed,theapplicationoftechnicalrulesofproceduremayberelaxedinlaborcases
toservethedemandofsubstantialjustice.Thus,theexecutionoftheverificationintheappeal
memorandum by only two complainants in behalf of the other complainants also constitute
substantialcompliance.32[32]

Clearly,theNLRCproperlytookcognizanceoftheappealofallthenamed
complainantseventhoughitwassignedbyonlyoneofthem.Whiletherightto
appealisastatutoryandnotanaturalright,itisnonethelessanessentialpartofour
judicialsystem.Courtsare,therefore,advisedtoproceedwithcaution,soasnotto
deprive a party of the right to appeal. Litigants should have the amplest
opportunityfor theproper and just disposition of their cause free, as muchas
possible,fromtheconstraintsofproceduraltechnicalities.33[33]Thus,contraryto
respondentsclaim,thedecisionhadnotattainedfinalityevenastothosewhodid
notsigntheappealmemorandum.

32[32] Id. at 356-357. (Citations omitted.)


33[33] Kimberly Independent Labor Union for Solidarity, Activisim and
Nationalism (KILUSAN)-Organized Labor Associations in Line Industries and
Agriculture (OLALIA) v. Court of Appeals, G.R. Nos. 149158-59 and 156668,
July 24, 2007, 528 SCRA 45, 62.

Nowonthesubstantiveaspect.

Theissues boil downto whether the CA was correct in concludingthat


petitionerswereprojectemployeesandthattheirdismissalfromemploymentwas
legal.

Weanswerinthenegative.

Evenifthequestionsthatneedtobesettledarefactualinnature,thisCourt
neverthelessfeelsobligedtoresolvethemduetotheincongruentfindingsofthe
NLRCandtheLAandthoseoftheCA.34[34]

Article 280 of the Labor Code distinguishes a project employee from a


regularemployeeinthiswise:

Article280.Regularandcasualemployment.Theprovisionsofwrittenagreementtothe
contrarynotwithstandingandregardlessoftheoralagreementoftheparties,anemploymentshall
bedeemedtoberegularwheretheemployeehasbeenengagedtoperformactivitieswhichare
usuallynecessaryordesirableintheusualbusinessortradeoftheemployer, exceptwherethe

34[34] Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez, G.R. No.
170181, June 26, 2008, 555 SCRA 537, 549.

employmenthasbeenfixedforaspecificprojectorundertakingthecompletionorterminationof
whichhasbeendeterminedatthetimeoftheengagementoftheemployeeorwheretheworkor
servicestobeperformedisseasonal innatureandtheemploymentisforthedurationofthe
season.

An employment shall be deemed to be casual if it is not covered by the preceding


paragraph:Provided,That,anyemployeewhohasrenderedatleastoneyearofservice,whether
suchserviceiscontinuousorbroken,shallbeconsideredaregularemployeewithrespecttothe
activityinwhichheisemployedandhisemploymentshallcontinuewhilesuchactivityexists. 35

[35]

A project employee is assigned to a project which begins and ends at


determined or determinable times.36[36] Employees who work under different
project employment contracts for several years do not automatically become
regularemployees;theycanremainasprojectemployeesregardlessofthenumber
ofyearstheywork.Lengthofserviceisnotacontrollingfactorindeterminingthe
natureofonesemployment.37[37]Theirrehiringisonlyanaturalconsequenceof
the fact that experienced construction workers are preferred. 38[38] In fact,
employeeswhoaremembersofaworkpoolfromwhichacompanydrawsworkers
fordeploymenttoitsdifferentprojectsdonotbecomeregularemployeesbyreason
ofthatfactalone.TheCourthasconsistentlyheldthatmembersofaworkpoolcan
eitherbeprojectemployeesorregularemployees.39[39]

35[35] Emphasis supplied.


36[36]Gomav.PamplonaPlantation,Incorporated,G.R.No.160905,July4,2008,557SCRA124,134.

37[37] Abesco Construction and Development Corporation v. Ramirez, G.R.


No. 141168, April 10, 2006, 487 SCRA 9, 14.
38[38] Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez, supra note
34, at 550.
39[39] Abesco Construction and Development Corporation v. Ramirez, supra
note 37, at 14.

The principal test used to determine whether employees are project


employeesiswhetherornottheemployeeswereassignedtocarryoutaspecific
projectorundertaking,thedurationorscopeofwhichwasspecifiedatthetimethe
employeeswereengagedforthatproject.40[40]

Admittedly, respondents did not present the employment contracts of


petitionersexceptthatofDacuital.Theyexplainedthatitwasnolongernecessary
to present the other contracts since petitioners were similarly situated. Having
presented one contract, respondents believed that they sufficiently established
petitionersstatusasprojectemployees.

Eventhoughtheabsenceofawrittencontractdoesnotbyitselfgrantregular
statustopetitioners,suchacontractisevidencethatpetitionerswereinformedof
thedurationandscopeoftheirworkandtheirstatusasprojectemployees. 41[41]In
thiscase,wherenootherevidencewasoffered,theabsenceoftheemployment
contracts raises a serious question of whether the employees were properly
informedattheonsetoftheiremploymentoftheirstatusasprojectemployees. 42
[42]

40[40] Goma v. Pamplona Plantation, Incorporated, supra note 36, at 135;


Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez, supra note 34, at
550.
41[41] Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez, supra note
34, at 553.
42[42] Id.

While it is true that respondents presented the employment contract of


Dacuital,thecontractdoesnotshowthathewasinformedofthenature,aswellas
thedurationofhisemployment.Infact,thedurationoftheprojectforwhichhe
was allegedly hired was not specified in the contract. The pertinent provision
thereofisquotedhereunderforeasyreference:

3.InaccordancewithPolicyNo.20oftheLaborCodeofthePhilippines,partiesagree
that the effective date of this employment is 4500 up to the duration of the
DUCTWORK/ELECTRICAL/MECHANICALphaseoftheprojectestimatedtobefinishedinthe
monthof_______,19______orearlier.43[43]

Evenifweassumethatundertheaboveprovisionofthecontract,Dacuital
wasinformedofthenatureofhisemploymentandthedurationoftheproject,that
samecontractisnotsufficientevidencetoshowthattheotheremployeeswereso
informed.Itisundisputedthatpetitionershadindividualemploymentcontracts,yet
respondentsoptednottopresentthemonthelameexcusethattheyweresimilarly
situated as Dacuital. The nonpresentation of these contracts gives rise to the
presumptionthattheemployeeswerenotinformedofthenatureanddurationof
theiremployment.Itisdoctrinallyentrenchedthatinillegaldismissalcases,the
employer has the burden of proving with clear, accurate, consistent, and
convincingevidencethatthedismissalwasvalid.Absentanyotherproofthatthe

43[43] CA rollo, p. 387.

projectemployeeswereinformedoftheirstatusassuch,itwillbepresumedthat
theyareregularemployees.44[44]

Moreover,DepartmentOrderNo.19(aswellastheoldPolicyInstructions
No.20)requiresemployerstosubmitareportofanemployeesterminationtothe
nearestpublicemploymentofficeeverytimetheemploymentisterminateddueto
thecompletionofaproject.45[45]Inthiscase,therewasnoevidencethattherewas
indeedsuchareport.LMCECsfailuretofileterminationreportsuponthecessation
ofpetitionersemploymentwasanindicationthatpetitionerswerenotprojectbut
regularemployees.

Wellestablishedistherulethatregularemployeesenjoysecurityoftenure
andtheycanonlybedismissedforjustorvalidcauseanduponcompliancewith
due process, i.e., after notice and hearing. In cases involving an employees
dismissal,theburdenisontheemployertoprovethatthedismissalwaslegal.46[46]
ThisburdenwasnotamplydischargedbyLMCECinthiscase.Beingregular
employees,petitionerswereentitledtosecurityoftenure,andtheirservicesmay
notbeterminatedexceptforcausesprovidedbylaw.47[47]

44[44] Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez, supra note
34, at 553.
45[45] Goma v. Pamplona Plantation, Incorporated, supra note 36, at 135.
46[46] Id. at 136.
47[47] Cocomangas Hotel Beach Resort v. Visca, G.R. No. 167045, August 29,
2008, 563 SCRA 705, 721.

Finally,recordsfailedtoshowthatLMCECaffordedpetitioners,asregular
employees,dueprocesspriortotheirdismissal,throughthetwinrequirementsof
notice and hearing. Petitioners were not served notices informing them of the
particularactsforwhichtheirdismissalwassought.Norweretheyrequiredtogive
theirsideregardingthechargesmadeagainstthem,ifany.Certainly,petitioners
dismissalwasnotcarriedoutinaccordancewithlawandwas,therefore,illegal. 48
[48]

Article 279 of the Labor Code, as amended, provides that an illegally


dismissedemployeeshallbeentitledtoreinstatement,fullbackwages,inclusiveof
allowances,andtohisotherbenefitsortheirmonetaryequivalentfromthetimehis
compensationwaswithheldfromhimuptothetimeofhisactualreinstatement. 49
[49]

ContrarytotheconclusionoftheNLRC,thebackwagesduepetitionersmust
becomputedfromthetimetheywereunjustlydismisseduntilactualreinstatement
totheirformerpositions.Thus,untilLMCECimplementsthereinstatementaspect,
itsobligationtopetitioners,insofarasaccruedbackwagesandotherbenefitsare
concerned,continuestoaccumulate.50[50]

48[48] Hanjin Heavy Industries and Construction Co., Ltd. v. Ibaez, supra note
34, at 559.
49[49] Cocomangas Hotel Beach Resort v. Visca, supra note 47, at 721.
50[50] Id.

ThefactthatpetitionersdidnotappealtheNLRCdecisiononthismatter
doesnotbarthisCourtfromorderingitsmodification. Asheldin Cocomangas
HotelBeachResortv.Visca51[51]

Whileasageneralrule,apartywhohasnotappealedisnotentitledtoaffirmativereliefotherthan
theonesgrantedinthedecisionofthecourtbelow,thisCourtisimbuedwithsufficientauthority
anddiscretiontoreviewmatters,nototherwiseassignedaserrorsonappeal,ifitfindsthattheir
considerationisnecessaryinarrivingatacompleteandjustresolutionofthecaseortoservethe
interestsofjusticeortoavoiddispensingpiecemealjustice.

Besides,substantiverightsliketheawardofbackwagesresultingfromillegaldismissal
mustnotbeprejudicedbyarigidandtechnicalapplicationoftherules.Thecomputationofthe
award for backwages from the time compensation was withheld up to the time of actual
reinstatement is a mere legal consequence of the finding that respondents [petitioners] were
illegallydismissedbypetitioners[respondents]. 52[52]

AstorespondentCamusliabilityasLMCECpresident,itissettledthatin
theabsenceofmalice,badfaith,orspecificprovisionoflaw,adirectororofficer
ofacorporationcannotbemadepersonallyliableforcorporateliabilities.53[53]

AsheldinLowe,Inc.v.CourtofAppeals,54[54]citingMcLeodv.NLRC:55
[55]

Personalliabilityofcorporatedirectors,trusteesorofficersattachesonlywhen(1)they
assenttoapatentlyunlawfulactofthecorporation,orwhentheyareguiltyofbadfaithorgross

51[51] Id.
52[52] Id. at 722.
53[53] Lowe, Inc v. Court of Appeals, G.R. Nos. 164813 and 174590, April 14,
2009, 596 SCRA 140.
54[54] Id.
55[55] G.R. No. 146667, January 23, 2007, 512 SCRA 222.

negligenceindirectingitsaffairs,orwhenthereisaconflictofinterestresultingindamagestothe
corporation,itsstockholdersorotherpersons;(2)theyconsenttotheissuanceofwatereddown
stocksor when,having knowledgeof suchissuance, donot forthwithfile withthe corporate
secretarytheirwrittenobjection;(3)theyagreetoholdthemselvespersonallyandsolidarilyliable
withthecorporation;or(4)theyaremadebyspecificprovisionoflawpersonallyanswerablefor
theircorporateaction.56[56]

Tobesure,Camushasapersonalitywhichisdistinctandseparatefromthat
of LMCEC. There was no proof that Camus acted in bad faith in dismissing
petitioners from employment. The mere fact that he is the president of the
companydoesnotmakehimpersonallyliableforthepaymentofbackwages.

Finally,theCourtnotesthatalthoughTapananwasnamedaspetitioner,he
wasneverincludedasacomplainantbeforetheNLRC.Assuch,heisnotaparty
tothiscase.Moreover,asclearlystatedintheLAdecision,Reyeshasvoluntarily
withdrawnhiscaseagainstrespondents.Thus,althoughheisoneofthepetitioners
here,heisnotcoveredbythisDecision.Lastly,someofthepetitionershadalready
beenactuallyreinstatedbyLMCEC.Weemphasizethatthecomputationoftheir
backwagesshouldbeuptothedateofactualreinstatement.

WHEREFORE, premises considered, the petition is GRANTED. The


Court of Appeals Decision dated September 25, 2006 and Resolution dated
56[56]Lowe,Inc.v.CourtofAppeals,supranote53,at155.

February14,2007inCAG.R.SPNo.90377areREVERSEDandSETASIDE.
Petitionersdismissalfromemploymentisdeclaredillegaland,exceptHelytoN.
ReyesandRestitutoTapanan,theyareentitledtofullbackwagesfromthetimeof
illegaldismissaluntilactualreinstatement.

SOORDERED.

ANTONIO EDUARDO B. NACHURA


Associate Justice

WECONCUR:

ANTONIOT.CARPIO
AssociateJustice
Chairperson

LUCASP.BERSAMIN

ROBERTOA.ABAD

AssociateJustice

AssociateJustice

JOSECATRALMENDOZA
AssociateJustice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultationbeforethecasewasassignedtothewriteroftheopinionoftheCourts
Division.

ANTONIOT.CARPIO
AssociateJustice
Chairperson,SecondDivision


CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivision
ChairpersonsAttestation,IcertifythattheconclusionsintheaboveDecisionhad
beenreachedinconsultationbeforethecasewasassignedtothewriterofthe
opinionoftheCourtsDivision.

RENATOC.CORONA
ChiefJustice