NAGUIAT vs NLRC (Leonardo Galang, Et. Al., NOWM [Natl. Org.

of Working Men])

Facts:
- Petitioner CTFI operated Taxi Services within Clark Air base (Clark Field Taxi Inc; CTFI)
- Sergio Naguiat was the president and the respondents were employed as taxicab drivers
- Respondents services were terminated due to the phasing out of US military bases in the PH
- The Drivers’ Union and CTFI negotiated regarding the separation benefits;
> private respondents did not agree with the pay (P500 for every year of service)

- Respondents filed a complaint against Naguiat Enterprises (NE)

> that they were regular employees of Naguiat Enterprises
> that they have been assigned therein after employment was approved by CTFI
> that Sergio Naguiat (SN) managed their employment

- Petitioners submit that cessation of business was due to great financial losses due to phase out
- Labor Arbiter ruled:
> private respondents were regular workers of CTFI, not NE
> rejected allegation that CTFI closed due to great financial losses
> it was profitably earning at the time of cessation

- NLRC modified the ruling:

> NE and SN and Antolin Naguiat (AN, son of SN) be held jointly and severally liable

Issues:
- WON Naguiat Enterprises can be held jointly and severally liable for obligations of CTFI
- WON SN and AN could be held solidarily liable

Ruling:
- NE is not liable
> respondents are regular employees of CTFI, not NE
> there is no substantial basis that NE is an indirect employer
> SN only exercised his responsibilities as president of CTFI in supervising the
drivers and determining their employment terms
> respondents earned salary from CTFI and not NE

- SN as CTFI President is solidarily liable

> He falls within the definition of “employer” contemplated by the labor code
> the AC Ransom Case; the employer was a corporation; the officers thereof are
the persons acting in the interest of the employer; the corporation is the
employer

- With regards to Torts

> stockholders are personally liable for corporate torts
unless: corp. attained reasonable adequate liability insurance (absent
in the case)
> a tort is a BREACH OF LEGAL DUTY: in this case, payment of separation pay
> CTFI failed to do so; consequently, the stockholder who was actively engaged
in management of business be held personally liable
> SN is liable not because he acted in bad faith or with malice; but because he
actively engaged in the management of CTFI
> AN is not liable because he did not actively participate

- SC partially grants
> CTFI and SN, as president and co-owner, are ordered to pay jointly and
severally
> NE and AN are absolved from liability in payment of separation pay
Notes:
- In case of retrenchment; not due to serious business losses:
> 1 month pay/ ½ month for every year of service; whichever is higher
> Petitioners did not contest that respondents earned 240$ a month
> Respondents are entitled to 120$ for every year of service

- NOWM can represent respondents

> petitioners failed to contest their representation in the LA or NLRC
> they are bound by estoppel

- Employer; under labor code, includes:

> any person acting in the interest of an employer, directly or indirectly