SERGIO F. NAGUIAT vs. NATIONAL LABOR RELATIONS COMMISSION

SERGIO F. NAGUIAT vs. NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), NATIONAL ORGANIZATION OF WORKINGMEN and its members, LEONARDO T. GALANG et. Al.

G.R. No. 116123. March 13, 1997

Facts:

1.      Petitioner CFTI (Clark Field Taxi, Inc.) held a concessionaire's contract with the Army Air Force Exchange Services for the operation of taxi services within Clark Air Base.

2.      Sergio F. Naguiat was CFTI's president, while Antolin T. Naguiat was its vice-president. Like Sergio F. Naguiat Enterprises, Incorporated, a trading firm, it was a family-owned corporation.

3.      Due to the phase-out of the US military bases in the Philippines, from which Clark Air Base was not spared, the AAFES was dissolved, and the services of individual respondents were terminated.

4.      The AAFES Taxi Drivers Association, through its local president, Eduardo Castillo, and CFTI held negotiations as regards separation benefits that should be awarded in favor of the drivers.

5.      They arrived at an agreement that the separated drivers will be given P500.00 for every year of service as severance pay - individual respondents refused to accept theirs.

6.      Instead, after disaffiliating themselves from the drivers' union, individual respondents, through the National Organization of Workingmen, a labor organization which they subsequently joined, filed a complaint.

7.      In their complaint, private respondents alleged that they were regular employees of Naguiat Enterprises, although their individual applications for employment were approved by CFTI.

8.      They claimed to have been assigned to Naguiat Enterprises after having been hired by CFTI, and that the former then managed, controlled and supervised their employment.

Issue:

Are officers of corporations ipso facto liable jointly and severally with the companies they represent for the payment of separation pay?

Ruling:

·         Naguiat Enterprises Not Liable.

- No substantial basis to hold that Naguiat Enterprises is an indirect employer of individual respondents much less a labor only contractor.

            in the contract between CFTI and AAFES, the former, as concessionaire, agreed to purchase from AAFES for a certain amount within a specified period a fleet of vehicles, pursuant to their concessionaire's contract. This indicates that CFTI became the owner of the taxicabs which became the principal investment and asset of the company.

            Private respondents failed to substantiate their claim that Naguiat Enterprises managed, supervised and controlled their employment. It appears that they were confused on the personalities of Sergio F. Naguiat as an individual who was the president of CFTI, and Sergio F. Naguiat Enterprises, Inc., as a separate corporate entity with a separate business. They presumed that Sergio F. Naguiat, who was at the same time a stockholder and director of Sergio F. Naguiat Enterprises, Inc., was managing and controlling the taxi business on behalf of the latter. A closer scrutiny and analysis of the records, however, evince the truth of the matter: that Sergio F. Naguiat, in supervising the-taxi drivers and determining their employment terms, was rather carrying out his responsibilities as president of CFTI. Hence, Naguiat Enterprises as a separate corporation does not appear to be involved at all in the taxi business.

            Respondents could not deny that he received his salary from the office of CFTI inside the base.

Naguiat Enterprises was in the trading business while CFTI was in taxi services.

In addition, the Constitution of CFTI-AAFES Taxi Drivers Association which, admittedly, was the union of individual respondents while still working at Clark Air Base, states that members thereof are the employees of CFTI and "for collective bargaining purposes, the definite employer is the Clark Field Taxi Inc."

·         CFTI president solidarily liable.

A.C. Ransom Labor Union-CCLU vs. NLRC is the case in point. A.C. Ransom Corporation was a family corporation, the stockholders of which were members of the Hernandez family. It held that 'Employer' includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.' In the absence of definite proof in that regard, we believe it should be presumed that the responsible officer is the President of the corporation who can be deemed the chief operation officer thereof. Thus, in RA 602, criminal responsibility is with the 'Manager or in his default, the person acting as such.' In RANSOM, the President appears to be the Manager."

Sergio F. Naguiat, admittedly, was the president of CFTI who actively managed the business. Thus, applying the ruling in A. C. Ransom, he falls within the meaning of an "employer" as contemplated by the Labor Code, who may be held jointly and severally liable for the obligations of the corporation to its dismissed employees.

Moreover, petitioners also conceded that both CFTI and Naguiat Enterprises were "close family corporations" owned by the Naguiat family.

Essentially, "tort" consists in the violation of a right given or the omission of a duty imposed by law. Simply stated, tort is a breach of a legal duty.[ Article 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 reverses, which is the condition obtaining at bar. CFTI failed to comply with this law-imposed duty or obligation. Consequently, its stockholder who was actively engaged in the management or operation of the business should be held personally liable.

The Court here finds no application to the rule that a corporate officer cannot be held solidarily liable with a corporation in the absence of evidence that he had acted in bad faith or with malice. In the present case, Sergio Naguiat is held solidarily liable for corporate tort because he had actively engaged in the management and operation of CFTI, a close corporation.

·         AntolinNaguiat not personally liable

Antolin T. Naguiat was the vice president of the CFTI. Although he carried the title of "general manager" as well, it had not been shown that he had acted in such capacity. Furthermore, no evidence on the extent of his participation in the management or operation of the business was proffered. In this light, he cannot be held solidarily liable for the obligations of CFTI and Sergio Naguiat to the private respondents.