CASE 2016-0004: JOSE EMMANUEL P. GUILLERMO VS. CRISANTO P. USON (G.R. NO. 198967, 07 MARCH 2016, PERALTA, J.) (SUBJECT/S: PIERCING THE VEIL OF CORPORATE FICTION; OFFICERS AND COMPANIES NOT IMPLEADED IN LABOR CASE CAN BE HELD LIABLE TO WORKERS) (BRIEF TITLE: GUILLERMO VS. USON)
DISPOSITIVE:
“WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated June 8, 2011 and Resolution dated October 7, 2011 in CAG.R. SP No. 115485 are AFFIRMED.
SO ORDERED.”
SUBJECTS/DOCTRINES/DIGEST:
GUILLERMO ASSERTS THAT HE WAS IMPLEADED IN THE CASE ONLY MORE THAN A YEAR AFTER ITS DECISION HAD BECOME FINAL AND EXECUTORY. BUT IN THE EXECUTION STAGE HE WAS INCLUDED AS JUDGMENT OBLIGOR. IS THIS PROPER?
YES. LIABILITY ATTACHED, ESPECIALLY TO THE RESPONSIBLE OFFICERS, EVEN AFTER FINAL JUDGMENT AND DURING EXECUTION, WHEN THERE WAS A FAILURE TO COLLECT FROM THE EMPLOYER CORPORATION THE JUDGMENT DEBT AWARDED TO ITS WORKERS.
IN THIS CASE GUILLERMO IS THE PERSON RESPONSIBLE IN THE ACTUAL RUNNING OF THE COMPANY AND FOR THE MALICIOUS AND ILLEGAL DISMISSAL OF THE COMPLAINANT; HE, LIKEWISE, WAS SHOWN TO HAVE A ROLE IN DISSOLVING THE ORIGINAL OBLIGOR COMPANY IN AN OBVIOUS “SCHEME TO AVOID LIABILITY”
“In the earlier labor cases of Claparols v. Court of Industrial Relations43 and A.C. Ransom Labor Union-CCLU v. NLRC,44 persons who were not originally impleaded in the case were, even during execution, held to be solidarily liable with the employer corporation for the latter’s unpaid obligations to complainant-employees.”
CAN ANOTHER CORPORATION NOT IMPLEADED BE MADE A JUDGMENT OBLIGOR IN A LABOR CASE?
YES IF IT IS A MERE CONDUIT OR ALTER EGO OF THE ORIGINALLY IMPLEADED CORPORATION, AND/OR THE OFFICERS OR STOCKHOLDERS OF THE LATTER CORPORATION.
“The common thread running among the aforementioned cases, however, is that the veil of corporate fiction can be pierced, and responsible corporate directors and officers or even a separate but related corporation, may be impleaded and held answerable solidarily in a labor case, even after final judgment and on execution, so long as it is established that such persons have deliberately used the corporate vehicle to unjustly evade the judgment obligation, or have resorted to fraud, bad faith or malice in doing so. When the shield of a separate corporate identity is used to commit wrongdoing and opprobriously elude responsibility, the courts and the legal authorities in a labor case have not hesitated to step in and shatter the said shield and deny the usual protections to the offending party, even after final judgment. The key element is the presence of fraud, malice or bad faith. Bad faith, in this instance, does not connote bad judgment or negligence but impo1is a dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill will; it partakes of the nature of fraud.61”
WHEN DOES PERSONAL LIABILITY ATTACH?
PERSONAL LIABILITY ATTACHES ONLY WHEN, AS ENUMERATED BY THE SAID SECTION 31 OF THE CORPORATION CODE, THERE IS A WILFULL AND KNOWING ASSENT TO PATENTLY UNLAWFUL ACTS OF THE CORPORATION, THERE IS GROSS NEGLIGENCE OR BAD FAITH IN DIRECTING THE AFFAIRS OF THE CORPORATION, OR THERE IS A CONFLICT OF INTEREST RESULTING IN DAMAGES TO THE CORPORATION.
WHEN DOES THE DOCTRINE OF PIERCING THE CORPORATE VEIL IS HELD TO APPLY?
IN THREE (3) BASIC AREAS, NAMELY: ( 1) DEFEAT OF PUBLIC CONVENIENCE AS WHEN THE CORPORATE FICTION IS USED AS A VEHICLE FOR THE EVASION OF AN EXISTING OBLIGATION; (2) FRAUD CASES OR WHEN THE CORPORATE ENTITY IS USED TO JUSTIFY A WRONG, PROTECT FRAUD, OR DEFEND A CRIME; OR (3) 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 CORPORATION.
IN A CASE WHERE THE CORPORATE VEIL IS PIERCED, ARE ALL THE OFFICERS PERSONALLY LIABLE?
ONLY THE “RESPONSIBLE OFFICER,” I.E., THE PERSON DIRECTLY RESPONSIBLE FOR AND WHO “ACTED IN BAD FAITH” IN COMMITTING THE ILLEGAL DISMISSAL OR ANY ACT VIOLATIVE OF THE LABOR CODE
IN A CLOSE CORPORATION, WHO IS PERSONALLY LIABLE?
IT IS THE PERSON ACTIVELY ENGAGED IN THE MANAGEMENT OF THE CORPORATION.
WHEN WILL CORPORATE FICTION BE DISREGARDED?
THERE IS NO HARD AND FAST RULE ON WHEN CORPORATE FICTION MAY BE DISREGARDED; INSTEAD, EACH CASE MUST BE EVALUATED ACCORDING TO ITS PECULIAR CIRCUMSTANCES.
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