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SERGIO F. NAGUIAT v. NLRC

FACTS:

Petitioner Clark Field Taxi, Inc. (CFTI) had a concessionaire's contract for taxi services within Clark Air Base. The individual respondents were former taxicab drivers of CFTI, who were required to pay a daily "boundary fee" and other expenses. With the closure of Clark Air Base, the individual respondents' services were terminated. The AAFES Taxi Drivers Association and CFTI agreed on a separation pay of P500.00 for every year of service, but the individual respondents refused to accept this amount and filed a complaint against Naguiat Enterprises, AAFES, and CFTI. They claimed to be regular employees entitled to separation pay based on their daily earnings. The labor arbiter ruled in favor of the individual respondents and ordered CFTI to pay them P1,200.00 for every year of service. The basis for this decision was that individual respondents were regular workers of CFTI, and the closure of Clark Air Base was the cause of CFTI's cessation of business, not financial losses.

The petitioners in this case were Sergio F. Naguiat and Antolin Naguiat, who were officers and stockholders of CFTI. The private respondents were former taxi drivers of CFTI who filed a complaint seeking the payment of unpaid separation pay. The labor arbiter ruled in favor of the private respondents but did not grant the full amount of separation pay requested, considering it "unfair and unjust to say the least" due to force majeure. The private respondents appealed to the NLRC, which modified the decision and granted separation pay. The NLRC also held that Sergio F. Naguiat Enterprises should be joined as an indispensable party with joint and several liability. The petitioners raised issues of lack of due process and the separate liability of Sergio F. Naguiat Enterprises. The Solicitor General supported the private respondents' allegations and argued for the disregard of the separate personalities of the respondent corporations and their officers.

ISSUES:

  1. Are private respondent-employees of petitioner Clark Field Taxi, Inc., who were separated from service due to the closure of Clark Air Base, entitled to separation pay and, if so, in what amount?

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

  3. Did the NLRC commit grave abuse of discretion amounting to lack of jurisdiction in issuing the appealed resolution?

  4. Could Messrs. Teofilo Rafols and Romeo N. Lopez validly represent the private respondents?

  5. Is the resolution issued by the NLRC contrary to law?

  6. Were petitioners Sergio F. Naguiat and Antolin T. Naguiat denied due process?

  7. Were petitioners not furnished copies of private respondents' appeal to the NLRC?

RULING:

  1. Entitlement to Separation Pay: The petition is partially granted; private respondent-employees are entitled to separation pay computed at US$120.00 for every year of service or its peso equivalent. The Court found no grave abuse of discretion by the NLRC in determining the amount.

  2. Liability of Corporate Officers:

    • Sergio F. Naguiat: Held jointly and severally liable with Clark Field Taxi, Inc. as he actively managed the business and falls under the term "employer" under the Labor Code.

    • Antolin T. Naguiat: Absolved from liability as there was no evidence of his participation in management.

  3. Grave Abuse of Discretion by NLRC: The Court did not consider the NLRC's decision as having grave abuse of discretion since the factual findings were supported by evidence.

  4. Validity of Representation by Messrs. Teofilo Rafols and Romeo N. Lopez: Petitioners are estopped from questioning NOWM’s representation as they failed to raise it seasonably before the lower bodies.

  5. Resolution Contrary to Law: The Court found the NLRC’s resolution was partially correct but modified the ruling, affirming the liability of CFTI and some officers while absolving others.

  6. Due Process: There was no denial of due process for Sergio F. Naguiat as he voluntarily submitted himself to the jurisdiction of the labor arbiter.

  7. Copies of Appeal: The procedural lapse regarding the insufficient copies of the appeal should have been raised before the NLRC. It was deemed waived.

PRINCIPLES:

  1. Separation Pay: Employees separated due to business closure not caused by serious business losses are entitled to separation pay under Article 283 of the Labor Code.

  2. Grave Abuse of Discretion: The Supreme Court reviews factual findings of quasi-judicial bodies but generally upholds them unless there is clear evidence of arbitrariness.

  3. Estoppel: Parties must timely raise procedural and juridical issues; failure to do so results in waiver of such issues.

  4. Corporate Liability: Corporate officers may be held personally liable for corporate obligations if they actively manage or operate the business, particularly in close corporations.

  5. Due Process: Administrative and quasi-judicial bodies must provide procedural fairness, but parties can waive claims of procedural lapses through participation in the proceedings.

  6. Independent Contractors vs. Labor-Only Contractors: Determined based on control and substantial investment in the form of tools, equipment, and work premises.

  7. Corporate Tort: Defined as a breach of a legal duty, which can impose personal liability on corporate officers in certain circumstances, particularly for close corporations without appropriate liability insurance.