Naguiat v.

NLRC
GR No. 116123
March 13, 1997

PANGANIBAN, J.:

FACTS:
Clark Field Taxi, Inc. (CFTI) held a concessionaire’s contract with Army Air Force Exchange
Services (AAFES). Sergio Naguiat (Sergio) was its President, and Antolin Naguiat (Antolin) was its Vice.
The individual respondents were the employees of CFTI working as taxi drivers na boundary basis.
The RP-US base agreement was ending hence, AAFES was dissolved as well along with Clark Base.
This prompted the termination of the respondents which led the AFFES Taxi drivers association (Drivers
Assoc.) to negotiate with CFTI for separation benefits. It was agreed upon that the drivers will receive
P500 for each year of service.
The respondents were not satisfied, they disaffiliated themselves with Drivers Assoc., and them
joined National Organization of Workingmen (NOWM) and then filed a complaint against Sergio as
Naguiat Enterprises’ owner. The respondents averred that they became the employees of Naguiat
Enterprises after having been assigned by CFTI and demand a better separation pay.
The NLRC increased the separation pay form P500 to P1200 based on humanitarian reasons and
the amount of 500 was not in accordance with the labor code. Sergio and Antolin submitted their petition
with regard to issues to be then resolved by the Supreme Court, and in the meanwhile posted a bond in
for a temporary restraining order to enjoin the execution by the assailed resolutions of the NLRC.

ISSUE:
1) Whether the NLRC committed grave abuse of discretion in increasing the separation pay
2) Whether NOWM’s representation of the respondents were valid
3) Whether Sergio and Antolin are jointly and severally liable along with the CFTI for the payment of
the separation pay
4) Whether there were tortious acts committed by CFTI by improperly paying the respondents in
accordance with the labor code

RULING:
1) No, Petitioners failed to prove that the court that there was grave abuse of discretion by being
arbitrary or in disregard on the evidence on record. The NLRC based their decision upon the
findings of the arbitration board in Pampanga which was based on evidence provided by the
respondents, which were not refuted by the petitioners. Furthermore, there were no severe
business losses, not financial losses that would warrant the retrenchment of personnel or the
closure of the business and thus warrant an exception from the payment of separation pay. It was
not due to the eruption of Mt. Mayon, but the closing of the military base in Clark.

2) Yes, NOWM was already a party-litigant as the organization representing the taxi drivers
complaints before the labor arbiter. Petitioners also failed to question the validity of such
representation before the judicial bodies hence they are once again estopped.

3) Only Sergio Naguiat is liable as CTFI president. This is based on Art. 212(c) of the labor code which
states that an employer include any person acting in the interest of an employer directly or
indirectly. This term shall not include any labor organization or any of its officers or agents except
when acting as employer. Usually, it should be the officers that should be liable, however the SC
 has interpreted it to be the President of the Corporation who can be deemed the chief operation
officer thereof. Thus, in RA 602, criminal responsibility s with the manage or in his default the
person acting as such (RANSON Case) If the policy was otherwise, then the corporation employer
can have devious ways of evading payment of backwages.

4) Yes, tort consists in the violation of a right given o=or the omission of a duty imposed by law.
Simply stated, tort is a breach of legal duty, in which the petitioners have committed. Art 283 of
the Labor Code, mandates the employer to grant separation pay to employees in case of closure
or cessation of operations of establishment or undertaking not due to serious business losses or
financial reversals, which is the condition obtaining at bar. CFTI failed to comply with this law-
imposed duty/obligation. Consequently, the stockholder who has actively engaged in the
management or operation of business should be held personally liable.

Furthermore it has been held in MAM realty Development v. NLRC that the director or
officers MAY still be held solitarily liable with a corporation by specific provision of law.

A corporation, being a juridical entity, may act only through its directors, officers and
employees. Obligations incurred by them, acting as such corporate agents, are not theirs but the
direct accountabilities of the corporation they represent. True, solidary liabilities may at times be
incurred but only when exceptional circumstances warrant such as, generally, in the following
cases:

4. When a director, trustee or officer is made, by specific provision of law, personally liable
for his corporate action." (footnotes omitted)

As pointed out earlier, the fifth paragraph of Section 100 of the Corporation Code
specifically imposes personal liability upon the stockholder actively managing or operating the
business and affairs of the close corporation. In fact, in posting the surety bond required by this
Court for the issuance of a temporary restraining order enjoining the execution of the assailed
NLRC Resolutions, only Sergio F. Naguiat, in his individual and personal capacity, principally bound
himself to comply with the obligation thereunder, i.e., "to guarantee the payment to private
respondents of any damages which they may incur by reason of the issuance of a temporary
restraining order sought, if it should be finally adjudged that said principals were not entitled
thereto."

WHEREFORE, the foregoing premises considered, the petition is PARTLY GRANTED. The assailed February
28, 1994 Resolution of the NLRC is hereby MODIFIED as follows:

(1) Petitioner Clark Field Taxi, Incorporated, and Sergio F. Naguiat, president and co-owner thereof, are
ORDERED to pay, jointly and severally, the individual respondents their separation pay computed at
US$120.00 for every year of service, or its peso equivalent at the time of payment or satisfaction of the
judgment;

(2) Petitioner Sergio F. Naguiat Enterprises, Incorporated, and Antolin T. Naguiat are ABSOLVED from
liability in the payment of separation pay to individual respondents.

SO ORDERED.