SECOND DIVISION
[G.R. No. 225311 November 29, 2021.]
GREGORIO B. DE LEON, petitioner,vs. GOOD YEAR STEEL PIPE CORPORATION, GOODWAY MARKETING CORPORATION, HELEN TIU, ET AL., respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 29 November 2021 which reads as follows:
"G.R. No. 225311 (Gregorio B. De Leon v. Good Year Steel Pipe Corporation, Goodway Marketing Corporation, Helen Tiu, et al.). — This resolves the Petition for Review on Certiorari1 under Rule 45 of the Rules of Court filed by petitioner Gregorio B. De Leon (De Leon), praying for the reversal of the January 15, 2016 Decision 2 and June 14, 2016 Resolution 3 of the Court of Appeals (CA) in CA-G.R. SP No. 137027. The CA affirmed the May 16, 2014 Decision 4 and July 10, 2014 Resolution 5 of the National Labor Relations Commission (NLRC), which dismissed De Leon's complaint for illegal dismissal and denied his monetary claims.
Antecedents
On September 29, 1979, respondent Good Year Steel Pipe (Good Year) hired De Leon as a welder. Later, in March 1981, co-respondent Goodway Marketing Corporation (Goodway) employed De Leon as a laborer. 6 De Leon received a daily wage of P718.50. 7
In the early part of 2013, Goodway suffered business reverses and decided to suspend its operations for a period of six (6) months effective August 1, 2013. In line with this, Goodway offered its employees a Special Voluntary Resignation Program. Thus, on July 26, 2013, Goodway's personnel department held a meeting. Nelson Ong (Ong) and Celia Miranda (Miranda), Goodway's supervisor and secretary, respectively, informed the employees that beginning August 1, 2013, they will be transferred to Good Year. Goodway offered to pay the employees separation pay, the monetary equivalent of their vacation leave and sick leave, and 13th month pay. Then, Goodway instructed the employees to secure their clearances and requirements for re-employment, and submit them by July 30, 2013. 8
De Leon signified his desire to avail of the Special Voluntary Resignation Program. In turn, Goodway explained to De Leon that he can only receive the benefits upon the issuance of his clearance by the accounting and/or management. 9
Meanwhile, on August 3, 2013, while De Leon's application was being processed, Good Year discovered that the former had been utilizing Goodway's steel rollers, wheels, and machine parts as personal body building devices. They obtained photographs of De Leon posing alongside the equipment. The machines had an estimated value of P95,000.00. 10 Thus, on August 5, 2013, Goodway sent De Leon a Notice to Explain. However, De Leon refused to receive the same. CAIHTE
On September 30, 2013, De Leon filed a complaint 11 for illegal dismissal, non-payment of wages, 13th month pay, separation pay, with claims for moral damages, exemplary damages, and attorney's fees against Good Year, Helen Tiu, and Alexander Tiu. He claimed that he was illegally dismissed and barred from entering the company premises.
On November 14, 2013, De Leon filed an Amended Complaint 12 impleading Goodway as an additional respondent.
Ruling of the Labor Arbiter (LA)
On February 13, 2014, the LA rendered a Decision 13 dismissing De Leon's complaint for illegal dismissal. The LA opined that De Leon's employment was terminated due to an authorized cause, noting that Goodway suffered severe business losses. As such, the LA awarded De Leon his separation pay equivalent to one-half month salary for every year of service, as well as his proportionate 13th month pay for 2013. However, the LA denied De Leon's claim for unpaid wages due to lack of evidence of non-payment. Similarly, the LA denied the award of moral damages and exemplary damages since De Leon's termination was not tainted with malice or bad faith. It also rejected De Leon's claims for attorney's fees, ratiocinating that the latter was represented by the Public Attorney's Office.
The dispositive portion of the LA ruling reads:
WHEREFORE, premises considered, the complaint for illegal dismissal is hereby DISMISSED but respondent Goodway Marketing Corporation is hereby ordered to pay complainant the amount of Php302,819.01 representing separation pay.
Further, respondent Goodway Marketing Corporation is also ordered to pay complainant the amount of Php10,897.25 representing proportionate 13th month pay for 2013.
Other claims are dismissed for lack of merit.
SO ORDERED. 14
Dissatisfied with the ruling, De Leon filed an appeal.
Ruling of the NLRC
On May 16, 2014, the NLRC rendered a Decision 15 modifying the LA's ruling. The NLRC disagreed with the LA's finding that Goodway terminated De Leon's employment for an authorized cause. Rather, it stressed that Goodway never actually suspended or ceased its operations. Hence, it found no basis to award separation pay. Moreover, the NLRC held that De Leon was not dismissed by Goodway. It noted that De Leon failed to present any evidence showing that he was in fact terminated from his employment. It explained that without a dismissal, there can be no question regarding the legality or illegality thereof. Accordingly, it denied De Leon's claim for backwages and separation pay. Likewise, it rejected De Leon's demand for moral damages, exemplary damages, and attorney's fees. However, it affirmed the LA's award of proportionate 13th month pay in favor of De Leon.
The dispositive portion of the NLRC ruling states:
WHEREFORE, premises considered, the instant Appeal filed by the complainant is hereby DENIED for lack of merit.
However, the Decision of Labor Arbiter Alberto S. Abalayan in NLRC NCR Case No. 09-13446-13 dated February 13, 2014 is MODIFIED in that the award of separation pay is hereby DELETED for lack of basis. Accordingly, respondent Goodway Marketing Corporation is hereby ordered to direct [De Leon] to go back to work but without backwages within ten (10) days from receipt hereof. Thereafter, [Goodway] should file a Compliance Report to this Commission within ten (10) days from the time [De Leon] reports to work.
The order for respondent Goodway Marketing Corporation to pay complainant the amount of Php10,897.25 representing his proportionate 13th month pay for 2013 is AFFIRMED.
SO ORDERED. 16
De Leon sought reconsideration, which the NLRC denied in its July 10, 2014 Resolution. 17
Aggrieved, De Leon filed with the CA a petition for certiorari under Rule 65 of the Rules of Court.
Ruling of the CA
In a Decision 18 dated January 15, 2016, the CA affirmed the NLRC ruling. The CA agreed with the NLRC that De Leon was not terminated from his employment. It opined that De Leon's claim of illegal dismissal is self-serving, conjectural, and of no probative value. Accordingly, the CA also denied De Leon's claims for backwages, separation pay, moral and exemplary damages, and attorney's fees. The CA likewise rejected De Leon's plea to hold Good Year and Goodway solidarily liable. It explained that the respondent corporations are separate and distinct entities with different sets of officers and shareholders. It found no substantial evidence proving that Good Year used its separate and distinct personality to perpetrate fraud or to evade its liability.
The decretal portion of the CA ruling states:
WHEREFORE, premises considered, the petition is DENIED. The Decision dated May 16, 2014 and Resolution dated July 10, 2014 of the NLRC are AFFIRMED.
SO ORDERED. 19
De Leon sought reconsideration of the CA ruling, which was denied in the CA's June 14, 2016 Resolution. 20
Undeterred, De Leon filed the instant petition for review on certiorari. 21
Issues
The main issues for resolution are (i) whether or not De Leon was illegally dismissed; and (ii) whether or not De Leon is entitled to his monetary claims.
De Leon bewails that the assailed CA Decision was based on a misapprehension of facts, and the findings were not supported by the evidence on record. 22 Likewise, he insists that he was illegally dismissed. He relates that he was rudely and dismissively ordered to wait for a call and was barred from entering the company premises. He claims that these events created a sufficient belief in his mind that Goodway reneged on its promise to employ him at Good Year and give him separation pay and other monetary benefits. 23 He further contends that Good Year and Goodway failed to comply with the procedural and substantive requirements prior to dismissing him. 24 DETACa
Moreover, De Leon clamors for the payment of his backwages and separation pay in lieu of reinstatement. He urges that reinstatement is no longer feasible in view of his strained relations with Good Year and Goodway. 25 He further seeks an award of moral damages, exemplary damages, and attorney's fees. Finally, he alleges that Good Year and Goodway must be held solidarily liable for all his monetary claims, as said companies are alter egos of each other. 26
On the other hand, respondents Good Year, Goodway, Helen Tiu, and Alexander Tiu argue that De Leon failed to prove the fact of his dismissal. They stress that there was no overt act on their part showing that they dismissed him. 27 Moreover, they retort that De Leon is not entitled to backwages and separation pay as he was never dismissed, legally or illegally. They retort that De Leon's claim of non-payment of 13th month pay is groundless and based on speculations. 28 Lastly, they riposte that De Leon's demands for moral damages, exemplary damages, and attorney's fees are baseless. 29
Ruling of the Court
The petition is denied for lack of merit.
De Leon was not dismissed from his
In resolving cases involving an employee's illegal dismissal, the employer bears the burden of proving that the dismissal was effected for a just or authorized cause. However, before delving into the legality of the dismissal, the employee must first establish the fact of termination through substantial evidence. 30 The employee must show an overt or positive act proving that he/she had in fact been dismissed by his/her employer. 31 The evidence presented must be clear, positive, and convincing. 32 Mere allegations will not suffice. 33 Without proof of the dismissal, there can be no question regarding its legality or illegality. 34
In this case, De Leon staunchly maintains that he was illegally dismissed from his employment. He relates that after he submitted his requirements for his application with Good Year, Ong rudely and dismissively told him (De Leon) that he will just call when he wants. 35 De Leon urges that Ong's utterance was enough to cause a sufficient belief in his mind that Goodway reneged on its promise to make him an employee at Good Year and to give him his separation pay and other monetary benefits. 36 He further states that his apprehension worsened when he was barred from entering the company premises. 37
De Leon's claim has no leg to stand on. There is nothing on record that proves that he was dismissed by Goodway. He failed to present any document, notice of termination, or even any letter or correspondence regarding his purported dismissal. Similarly, his testimony regarding his alleged conversation with Ong is one-sided and unproven. Bare and unsubstantiated allegations do not constitute substantial evidence and have no probative value. 38
Besides, his allegation that he was dismissed is merely speculative and conjectural. In his Petition, he admitted that Ong's utterance created a "sufficient belief" in his mind that he will no longer be employed at Good Year and that he will not receive his monetary benefits. 39 Evidently, he merely assumed that he was terminated, based on a single statement that does not even mention a dismissal, or even hint at it. There is nothing that may be deduced from Ong's statement which confines De Leon's termination. In fact, the purported statement pertained to his application at Good Year. Moreover, De Leon was not prevented from returning to work. Based on his own statement, he went to the office on August 5, 2013 to follow up on his employment status with Good Year, not to report for work. 40
Verily, absent any showing of an overt or positive act proving that Goodway dismissed De Leon, the latter's claim of illegal dismissal cannot be sustained, as it is self-serving, conjectural, and of no probative value.
Neither do the facts support De Leon's claim of constructive dismissal. For an act to constitute constructive dismissal, it must involve a display of utter discrimination or insensibility on the part of the employer so intense that it becomes unbearable for the employee to continue with his/her employment. 41 All the circumstances relayed by De Leon do not show any clear-cut indications of bad faith or some malicious design on Goodway's part to make his working environment insufferable. Surely, discrimination, insensibility, or disdain cannot be presumed from merely being told to await the management's call.
Even more telling, in the course of an investigation on August 3, 2013, De Leon was caught using materials and machine parts of Goodway in his working area. Thus, on August 5, 2013, Goodway sent him a Notice to Explain, which he refused to receive. 42 Then, he jumped the gun and filed a complaint for illegal dismissal. At that point, the status quo ante was for him to respond to the Notice to Explain. Unfortunately, instead of complying, he filed a complaint for illegal dismissal. Certainly, his act was premature, if not pre-emptive, which the Court shall not tolerate or accommodate. aDSIHc
It is also worth mentioning that Goodway's decision to suspend its operations for not more than six months in order to stave off further financial loss is a valid management prerogative. Article 301 of the Labor Code allows an employer to suspend the operation of its business for a period not exceeding six months:
Art. 301. [286]. When employment not deemed terminated. — The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty.
De Leon is not entitled to backwages,
It is settled that in cases where the employee was neither found to have been dismissed nor to have abandoned his/her work, the general course of action is for the Court to dismiss the complaint, direct the employee to return to work, and order the employer to accept the employee. 43
In this case, De Leon prays for the payment of separation pay in lieu of reinstatement, anchoring his claim on the alleged strained relations between him and Goodway. 44
De Leon's claim is denied.
As exhaustively discussed in Rodriguez v. Sintron Systems, Inc., 45 an order of "reinstatement" in cases where there was no dismissal by the employer or abandonment by the employees simply means that the employee may return to work. Consequently, the employee may not demand the payment of separation pay in lieu of reinstatement:
Indeed, in cases where the parties failed to prove the presence of either dismissal of the employee or abandonment of his work, the remedy is to reinstate such employee without payment of backwages. There is, however, a need to clarify the import of the term "reinstate" or "reinstatement" in the context of cases where neither dismissal nor abandonment exists. The Court has clarified that "reinstatement," as used in such cases, is merely an affirmation that the employee may return to work as he was not dismissed in the first place. It should not be confused with reinstatement as a relief proceeding from illegal dismissal as provided under Article 279 of the Labor Code, to wit:
Art. 294 [279]. Security of tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
Reinstatement under the aforequoted provision restores the employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal. In the present case, considering that there has been no dismissal at all, there can be no reinstatement as one cannot be reinstated to a position he is still holding. Instead, the Court merely declares that the employee may go back to his work and the employer must then accept him because the employment relationship between them was never actually severed.
Moreover, as there can be no reinstatement in the technical sense of Article 279, the doctrine of strained relations likewise has no application. This doctrine only arises when there is an order for reinstatement that is no longer feasible. It cannot be invoked by the employer to prevent the employee's return to work nor by the employee to justify payment of separation pay. As discussed, there having been no abandonment nor dismissal, the employee-employer relationship between the parties subsists. Hence, there is no need for reinstatement.
Hence, too, there can be no payment of separation pay. Separation pay is generally not awarded to an employee whose employment was not terminated. 46 (Emphasis supplied)
In any event, the doctrine of strained relations cannot be applied indiscriminately or used recklessly, since every labor dispute almost invariably results in strained relations. Rather, strained relations must be demonstrated as a fact. 47 Here, De Leon failed to prove that his relationship with Goodway had become so unbearable as to render reinstatement impracticable.
Furthermore, considering that De Leon was not illegally dismissed, he is not entitled to backwages. Notably, the payment of full backwages can only be granted to an unjustly dismissed employee, allowing him/her to recover from the employer what he/she had lost by way of wages as a result of his/her dismissal. 48 For the same reason, De Leon's prayer for moral damages, exemplary damages and attorney's fees is denied. ETHIDa
However, De Leon is entitled to his proportionate 13th month pay for the year 2013 in the amount of P10,897.25, as awarded by the NLRC and affirmed by the CA. Essentially, in a claim for the payment of 13th month pay, the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. This stems from the fact that all pertinent personnel files, records, payrolls, remittances, and other like documents, which will show that the employee's claim has been paid, are in the employer's custody and control. 49
In the present case, Goodway failed to show proof that it paid De Leon his proportionate 13th month pay, save for its general assertion that it had provided an honest account of the latter's salary. 50 Absent any documents or other convincing evidence proving payment, the Court shall not blindly accept Goodway's bare contention.
Goodway and Good Year are
A corporation is invested by law with a personality separate and distinct from those of the persons composing it as well as from that of any other legal entity to which it may be related. 51 However, in certain cases, the corporation's mask may be removed or its veil pierced when it serves as an alter ego of another entity and becomes a shield for fraud, illegality or inequity committed against third persons. 52
Particularly, the doctrine of piercing the corporate veil applies in the following instances:
(i) defeat of public convenience as when the corporate fiction is used as a vehicle for the evasion of an existing obligation; (ii) fraud cases or when the corporate entity is used to justify a wrong, protect fraud, or defend a crime; or (iii) alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporations. 53
Piercing the veil of corporate fiction is frowned upon and must be done with caution. 54 The corporation's wrongdoing must be proven clearly and convincingly. 55
In this case, De Leon adamantly insists that Good Year and Goodway are alter egos of each other. To support his argument, he alleges that both companies share the same address, have the same stockholders, and that he shuttled back and forth from one company to another.
To pierce the corporate veil based on the alter ego theory requires the concurrence of three elements, namely: (i) control of the corporation by the stockholder or parent corporation; (ii) fraud or fundamental unfairness imposed on the plaintiff; and (iii) harm or damage caused to the plaintiff by the fraudulent or unfair act of the corporation. The absence of any of these elements prevents piercing the corporate veil. 56 De Leon failed to establish all the elements mentioned.
As correctly ruled by the NLRC and the CA, Good Year and Goodway are two separate and distinct entities. Goodway is not controlled in any way by Good Year and vice versa. Likewise, both companies are engaged in different businesses. Good Year operates in the manufacture and wholesale of steel pipes, while Goodway is engaged in importing, exporting, buying, selling, trading, and dealing in merchandise. 57 Even though both corporations may be managed by the same persons, each entity entirely accounts independently for its own operations and responsibilities. Besides, it is settled that the "existence of interlocking directors, corporate officers and shareholders is not enough justification to pierce the veil of corporate fiction in the absence of fraud or other public policy considerations." 58
Additionally, De Leon did not suffer any fraud or fundamental unfairness, harm, or damage from the act of Good Year or Goodway. There is no showing that Good Year or Goodway used their separate and distinct personalities to perpetuate fraud or evade liabilities. De Leon's allegation that he shuttled back and forth from one company to the other is unsubstantiated. What appears from the records is simply that he was originally hired by Good Year as a welder in 1979, and was later employed with Goodway as a laborer in 1981. He continued working in the latter company until he filed his complaint for illegal dismissal. Thus, Good Year cannot be held solidarily liable with Goodway.
All told, a complaint for illegal dismissal presupposes a crucial fact — an actual dismissal. Absent an overt act proving that the employee was terminated, the complaint falters. As in the case, De Leon's failure to prove that he was dismissed by Goodway is fatal to his complaint. Since De Leon's employment was never terminated, he is ordered to return to work. In turn, Goodway is ordered to accept De Leon, without prejudice to the pending investigation against him.
WHEREFORE, the petition is DENIED. The January 15, 2016 Decision and June 14, 2016 Resolution of the Court of Appeals in CA-G.R. SP No. 137027 are AFFIRMED with modification. Petitioner Gregorio B. De Leon is hereby ordered to RETURN TO WORK within fifteen days (15) from his receipt of this Resolution. Respondent Goodway Marketing Corporation is ORDERED to ACCEPT him.
Respondent Goodway Marketing Corporation is further ORDERED to PAY De Leon his proportionate 13th month pay of P10,897.25, subject to a legal interest of six percent (6%) per annum, reckoned from the finality of this Court's Resolution until full satisfaction. cSEDTC
SO ORDERED." (Hernando, J.,on official leave.)
By authority of the Court:
(SGD.) TERESITA AQUINO TUAZONDivision Clerk of Court
Footnotes
1.Rollo, pp. 12-41.
2.Id. at 49-56; penned by Associate Justice Manuel M. Barrios, with Associate Justices Ramon M. Bato and Maria Elisa Sempio Diy, concurring.
3.Id. at 59-61.
4.Id. at 239-255; penned by Commissioner Erlinda T. Aguas, with Commissioners Raul T. Aquino and Teresita D. Castillon-Lora, concurring.
5.Id. at 291-293.
6.Id. at 140.
7.Id.
8.Id. at 98; 140.
9.Id. at 140.
10.Id. at 141.
11.Id. at 95.
12.Id. at 94.
13.Id. at 163-170; rendered by Labor Arbiter Alberto S. Abalayan.
14.Id. at 170.
15.Id. at 239-255; penned by Commissioner Erlinda T. Aguas, with Commissioners Raul T. Aquino and Teresita D. Castillon-Lora, concurring.
16.Id. at 254-255.
17.Id. at 141.
18.Id. at 49-56.
19.Id. at 55.
20.Id. at 59-61.
21.Id. at 12-41.
22.Id. at 19-20.
23.Id. at 21.
24.Id. at 23.
25.Id. at 37.
26.Id. at 32.
27.Id. at 340.
28.Id. at 343.
29.Id.
30. See Tri-C General Services v. Matuto, 770 Phil. 251, 262 (2015).
31.Id.
32.Id.
33.Id.
34. See Doctor and Lao, Jr. v. NII Enterprises and/or Ignacio, 821 Phil. 251, 265 (2017).
35.Rollo, p. 14.
36.Id. at 21.
37.Id.
38.Celia Atienza v. Noel Sacramento Saluta, G.R. No. 233413, June 17, 2019.
39.Id. at 21.
40.Id. at 252.
41.Italkarat 18, Inc. v. Juraldine Gerasmio, G.R. No. 221411, September 28, 2020.
42.Rollo, p. 251.
43. See G.R. No. 240254, July 24, 2019.
44.Rollo, p. 86.
45.Supra note 43.
46.Id.
47.Id., citing Claudia's Kitchen, Inc. v. Tanguin, 811 Phil. 784, 799 (2017).
48.Id., citing Verdadero v. Barney Autolines Group of Companies, 693 Phil. 646, 659 (2012).
49. See Minsola v. New City Builders, Inc., 824 Phil. 864, 879-880 (2018).
50.Rollo, pp. 145-146.
51.Maricalum Mining Corporation v. Florentino, 836 Phil. 655, 684 (2018), citing Ever Electrical Manufacturing, Inc. v. Samahang Manggagawa ng Ever Electrical, 687 Phil. 529, 538 (2012).
52.Zambrano v. Philippine Carpet Manufacturing Corporation, 811 Phil. 569 (2017), citing Philippine National Bank v. Andrada Electric Engineering Company, 430 Phil. 882, 894 (2002).
53.Maricalum Mining Corporation v. Florentino, supra note 51, at 672, citing General Credit Corporation v. Alsons Development and Investment Corporation, 542 Phil. 219, 232 (2007).
54.Id., citing Reynoso, IV v. Court of Appeals, 399 Phil. 38, 50 (2000).
55.Zambrano v. Philippine Carpet Manufacturing Corporation, supra note 52, at 584.
56.Id., citing Philippine National Bank v. Hydro Resources Contractors Corp., 706 Phil. 297, 311-312 (2013).
57.Rollo, p. 54.
58.Zambrano v. Philippine Carpet Manufacturing Corporation, supra note 52, at 587.