THIRD DIVISION
[G.R. No. 241025. November 26, 2018.]
MATTS CASPERS, petitioner, vs.ESMERALDA ALVARO LAMUG, MARYANN S. MORTIZ, 1 PHILIP S. MANILA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution dated November 26, 2018, which reads as follows:
"G.R. No. 241025 (Matts Caspers v. Esmeralda Alvaro Lamug, Maryann S. Mortiz, Philip S. Manila) — The Court:
(1) NOTES petitioner's Manifestation dated September 18, 2018 stating that the affidavit of service attached to said petition failed to indicate the details of the registry receipts and that the compact disc therein does not contain the scanned copy of said affidavit of service and verification due to inadvertence and submitting the attached copy of said affidavit with registry receipt details and compact disc containing the same; and
(2) EXCLUDES the National Labor Relations Commission (First Division) as respondent from the title of this case pursuant to Section 4 (a), Rule 45 of the 1997 Rules of Civil Procedure, as amended. (PeraltaandHernando, JJ., on official business and wellness leave, respectively.)
This is a Petition for Review on Certiorari 2 filed by Matts Caspers (petitioner) assailing the Court of Appeals (CA) Decision, 3 dated March 26, 2018, and Resolution, 4 dated July 25, 2018. The CA upheld the National Labor Relations Commission (NLRC) Decision, 5 dated July 4, 2016, declaring that respondent Esmeralda Alvaro Lamug (Lamug) was an employee of Neverland, Manila, Inc. (Neverland), and that she was illegally dismissed together with the other respondents, Maryann S. Mortiz (Mortiz) and Philip S. Manila (Manila). The CA likewise affirmed the monetary award of the NLRC to respondents.
Respondents were informed by petitioner on August 18, 2015, that Neverland had filed a petition for bankruptcy and had ceased operations effective August 17, 2015. They were asked to sign a document containing the effective date of their employment termination and, thereafter, ordered them to turn over all properties and to leave the company premises. They were not allowed to enter the premises since then. As a result, respondents filed a case for illegal dismissal alleging that the cessation of Neverland operations was not true since it held an event on October 17, 2015, two months after their termination.
The Labor Arbiter (LA) found that respondent Mortiz and Manila were illegally dismissed, while it held that it had no jurisdiction over respondent Lamug as she was a corporate officer of Neverland. The LA found no evidence to support the claim of Neverland that it had closed its business, much more its claim of business losses. Neverland also failed to give respondents their separation pay in view of its business closure. Thus, the LA awarded respondents back wages, separation pay, unpaid salary, service incentive leave pay (SILP), proportionate 13th month pay, moral and exemplary damages, and attorney's fees. CAIHTE
The NLRC affirmed the findings of the LA, except that of respondent Lamug. It ruled that Lamug was also an employee of Neverland, apart from her status as a corporate officer and stockholder. She was terminated as an employee of Neverland but not as a corporate officer; thus, there was no intracorporate dispute and the LA had jurisdiction over Lamug's complaint. The NLRC ordered the reinstatement of Lamug and also granted back wages, as well as moral and exemplary damages, and attorney's fees.
Petitioner questions two things: (1) that he was made personally liable with Neverland for the award of damages to respondent; and (2) that the NLRC declared that the LA had jurisdiction to hear respondent Lamug's complaint.
We deny the petition.
At the outset, "[a] corporation, as a juridical entity, may act only through its directors, officers, and employees. Obligations incurred as a result of the directors' and officers' acts as corporate agents, are not their personal liability but the direct responsibility of the corporation they represent. As a rule, they are only solidarily liable with the corporation for the illegal termination of services of employees if they acted with malice or bad faith." 6
The Court has held that "[t]o hold a director or officer personally liable for corporate obligations, two requisites must concur: (1) it must be alleged in the complaint that the director or officer assented to patently unlawful acts of the corporation or that the officer was guilty of gross negligence or bad faith; and (2) there must be proof that the officer acted in bad faith." 7
In this case, petitioner, as Director of Neverland, 8 was made solidarily liable with the corporation for having effected respondents' dismissal in bad faith. As found by the labor tribunals and affirmed by the CA, Neverland failed to prove that it was suffering from business losses that would warrant its closure. It also failed to show that it has complied with the requirements set forth by law in cases where employees were terminated due to business closure. Undeniably, these circumstances were clearly known to petitioner Caspers which evidently proves bad faith on his part. The CA ruled, thus:
It is clear that although retrenchment and cessation of operations are authorized causes for termination of employment, it is still necessary for the employer to serve notice of the intended retrenchment or closure, not only to the employees involved, but also to the Department of Labor and Employment (DOLE), one (1) month prior to the retrenchment/cessation of its operation. Also, the employer is still obliged to pay its retrenched/dismissed employees separation pay in the prescribed amount.
In the instant case, however, petitioner failed to show that he served notices of closure to private respondents and to the DOLE a month prior to the cessation of Neverland's operation. Petitioner also failed to even mention payment of separation pay in favor of private respondents as a consequence of the business closure.
Meanwhile, contrary to petitioner's claim, private respondents alleged that Neverland's business never stopped; that, in fact, after private respondents' termination from employment, an event organized by petitioner still pushed through; and that no notice of closure was submitted to the government of Taguig City, where petitioner conducts business. There were also no notices of closure given to the Department of Labor and Employment, as well as to the Securities and Exchange Commission to inform them of the business closure.
The foregoing only shows that petitioner never ceased operating his business. He, therefore, has no valid reason to dismiss private respondents from employment. Indubitably, private respondents were all illegally dismissed. 9
Petitioner did not deny or even attempt to explain the above findings. We emphasize that factual findings of the labor tribunals, especially if affirmed by the CA, must be given great weight and merit the Court's respect. 10
As to the issue of jurisdiction over respondent Lamug, we agree with the appellate court that she was an employee of Neverland, apart from being a stockholder and corporate officer. Evidence shows that she was not removed as a corporate officer. In fact, the petition before us states:
54. In fact, this has been the continuing position of petitioner Caspers. There is a reason why NEVERLAND never appeared in the proceedings before the Labor Arbiter: its Corporate Secretary was private respondent Lamug and private respondent Lamug refused to participate in board actions. As early as in his Motion to Dismiss, petitioner Caspers has already stated that:
9. Undersigned counsel, furthermore, is in a quandary as to how to represent respondent Neverland Manila, Inc. without proper authorization granted to him by the Board of Directors where complainant Lamug is the only Corporate Secretary, as no assistant Corporate Secretary had been given such office by the Board of Directors of respondent Neverland Manila, Inc. 11 (Emphasis Supplied)
Evidently, respondent Lamug was only removed as a managing director, which is not a corporate officer position. Such inaction of the Board merely shows that her status as a corporate secretary stands to be valid. As a consequence, there is no intracorporate dispute that would warrant the jurisdiction of the regular courts. Therefore, the NLRC is correct in saying that the LA had jurisdiction over Lamug's complaint.
The CA, the NLRC, and the Labor Arbiter consistently found, based on material facts established by the record of this case, that respondents were illegally dismissed. We do not find a reason to rule otherwise. HEITAD
WHEREFORE, the petition is DENIED. (Peralta, J., on official business;Leonen, J., Acting Chairperson.)
SO ORDERED."
Very truly yours,
(SGD.) WILFREDO V. LAPITANDivision Clerk of Court
Footnotes
1.Rollo, p. 195; referred to as Mary Ann S. Mortiz in other parts of the rollo.
2.Id. at 10-28.
3.Id. at 33-43; penned by Associate Justice Stephen C. Cruz, with Associate Justices Romeo F. Barza and Carmelita Salandanan Manahan, concurring.
4.Id. at 45-47; id.
5.Id. at 75-87; penned by Commissioner Gina F. Cenit-Escoto with Presiding Commissioner Gerardo C. Nograles and Commissioner Romeo L. Go, concurring.
6.Peñaflor v. Outdoor Clothing Manufacturing Corporation, et al., 632 Phil. 219, 227 (2010).
7. See Francisco v. Mallen, Jr., 645 Phil. 369, 374-375 (2010).
8Rollo, p. 12.
9.Rollo, pp. 39-40.
10.The Coffee Bean and Tea Leaf Philippines, Inc., et al. v. Arenas, 755 Phil. 882, 891 (2015).
11.Rollo, pp. 22-23.