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SAN FELIPE NERI SCHOOL OF MANDALUYONG v. NLRC

FACTS:

The case involves a petition for certiorari seeking to review and set aside the resolutions of the NLRC affirming the decision of the Labor Arbiter. The case arose from the sale and transfer of the San Felipe Neri School of Mandaluyong, Inc. to the Roman Catholic Archbishop of Manila (RCAM). Private respondents, former teacher employees of the school, were not informed of this sale and were surprised to learn of the change in ownership and management when they reported for work. As a result of the sale, they were demoted to probationary status and their past services were not recognized by the new employer. Private respondents filed a complaint for separation pay and other claims against all the petitioners, including the RCAM. The Labor Arbiter ruled in favor of the private respondents, ordering the petitioners to pay separation pay. The petitioners appealed to the NLRC but their appeal was dismissed for lack of merit. The main issue in the case is whether the sale and transfer of the school terminated the employment of private respondents, entitling them to separation pay.

ISSUES:

  1. Whether the employment of the respondent teachers was terminated by the sale and transfer of the school.

  2. Whether petitioners can be held accountable for the separation pay of the respondent teachers.

RULING:

  1. The Supreme Court held that the employment of the respondent teachers was terminated by the sale and transfer of the school. The Court found that the new owner and administrator of the school required the respondent teachers to apply as new employees subject to probationary status, and their past services were not recognized. This clearly indicates that their employment was terminated.

  2. Petitioners can be held accountable for the separation pay of the respondent teachers. The Court affirmed the NLRC's ruling that there was a closure of the establishment when it was sold to the transferee. Under the law, in case of closure or cessation of operation of an establishment, the employees affected are entitled to separation pay. The Court held that the respondent teachers are entitled to separation pay from petitioners, who were the incorporators, stockholders, and/or trustees of the school.

PRINCIPLES:

  • In case of closure or cessation of operation of an establishment, employees affected are entitled to separation pay.

  • Incorporators, stockholders, and/or trustees of a corporation can be held accountable for the obligations of the corporation.