November 8, 2017

G.R. No. 202613

SYMEX SECURITY SERVICES, INC. and RAFAEL Y. ARCEGA, Petitioners

vs.
MAGDALINO O. RIVERA, JR. and ROBERTO B. YAGO, Respondents

DECISION

CAGUIOA, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated January
12, 2012 and the Resolution3 dated June 27, 2012 of the Court of Appeals (CA) in
CA-G.R. SP No. 119039, which affirmed the Decision4 dated December 9, 2010 and
Resolution5 dated February 7, 2011 of the National Labor Relations Commission
(NLRC) in NLRC LAC No. 042778- 05 (RA-06-10) that, in turn, reversed the
Decision6 dated April 30, 2010 of the Labor Arbiter (LA) in NCR-02-02569-03 which
dismissed the complaint for illegal dismissal filed by respondents Magdalino O.
Rivera, Jr. and Roberto B. Yago (respondents) against petitioners Symex Security
Services, Inc. (petitioner Symex) and Rafael Y. Arcega (petitioner Arcega), and
ordered petitioners to pay respondents in the amount of ₱l,543.75 each or a total
of ₱3,087.50.

Facts

The instant case stemmed from a complaint7 for underpayment/nonpayment of

wages, overtime pay, holiday pay, premium for rest day, service incentive leave
pay, clothing allowance and 13th month pay as well as illegal deduction of cash
bond and firearm bond and repair filed by respondents before the LA.

Respondents alleged that they had been employed as security guards by

petitioner Symex sometime in May 1999. Petitioner Symex is engaged in the
business of investigation and security services. Its President and Chairman of the
Board is petitioner Arcega.8

Respondents were both assigned at the offices and premises of Guevent Industrial
Development Corporation (Guevent), a client of petitioner Symex. As security
guards, they were tasked to guard the entrance and the exit of the building, and
check the ingress and egress of the visitors' vehicles going through the building.
Their tour of duty was from Monday to Saturday, from 6:00 AM to 6:00 PM, a
twelve-hour duty, but they were not paid their overtime pay. Respondents were
likewise not given a rest day, and not paid their five-day service incentive leave
pay, and 13th month pay.9

At the time of their employment, respondents were receiving a salary of ₱198.00

a day from January 20 to March 2001. From April 2001 to March 2003, they were
receiving ₱250.00 a day. They were required to report for work during legal
holidays, but they were not paid holiday premium pay.10

On February 25, 2003, respondents filed a complaint for nonpayment of holiday

pay, premium for rest day, 13th month pay, illegal deductions and damages.11

On March 13, 2003, Capt. Arcega Cura (Capt. Cura), the Operations Manager of
petitioner Symex, summoned respondents to report to the head office the next
day.12

The following day or on March 14, 2003, respondents went to the head office
where Capt. Cura told them that they would be relieved from the post because
Guevent reduced the number of guards on duty. Capt. Cura told them to go back
on March 17, 2003 for their reassignment.13

On March 17, 2003, Capt. Cura told respondents that they would not be given a
duty assignment unless they withdrew the complaint they filed before the LA.
Respondents were made to choose between resignation or forcible leave. Capt.
Cura gave them a sample affidavit of desistance for them to use as a guide.
Respondents both refused to obey Capt. Cura, who then told them that they were
dismissed.14

The next day or on March 18, 2003, respondents amended their

complaint15 before the LA to include illegal dismissal.16

In their defense, petitioners Symex and Arcega maintained that they did not
illegally dismiss respondents. They claimed that respondents are still included in
petitioner Symex's roll of security guards. They shifted the blame to respondents,
arguing that respondents refused to accept available postings.17

The LA Ruling
In a Decision18 dated April 30, 2010, the LA dismissed respondents' amended
complaint for illegal dismissal but ordered petitioner Symex to pay respondents'
their proportionate 13th month pay, viz.:

Rates: ₱198/day (1/20/01 – 3/31/01) Dismissed 3/14/03

₱250/day (4/1/01 - 3/31/03) =
A. MAGDALINO 0. RIVERA, JR.
PROP. 13th MO. PAY:
1/1/03-3/14/03
₱250 x 30 x 2.4 7/12 = ₱l,543.75
B. ROBERTO B. YAGO
PROP. 13th MO. PAY:
1/1/03-3/14/03
₱250 x 30 x 2.4 7/12 = ₱l,543.75
SUMMARY OF COMPUTATION:
A. MAGDALINO O. RIVERA, JR. ₱l,543.75
B. ROBERTOB. YAGO 1,543.75

TOTAL AWARD: ₱3,087.5019

The LA found that respondents were merely relieved from their post by Capt.
Cura. According to the LA, a relief order in itself does not sever the employment
relationship between a security guard and the agency. Further, the LA did not give
credence to the purported handwritten Affidavit of Desistance supposedly given
to respondents by Capt. Cura because such affidavit offered no assurance of its
authenticity as it was unsigned and at best, self-serving.20

The LA also ruled that the pay slips presented by respondents themselves showed
that they were not underpaid. Respondents have also failed to prove that they
rendered overtime work or that they worked on a holiday/rest day. Respondents
also failed to show proof that they were entitled to their claims for service
incentive leave pay and for illegal deductions. The LA also ruled that there were
no qualifying circumstances in the instant case to warrant the grant of damages.21
Aggrieved, respondents appealed to the NLRC.

The NLRC Ruling

In a Decision22 dated December 9, 2010, the NLRC reversed and set aside the LA
ruling, viz.:

WHEREFORE, the foregoing premises considered, the decision of the Labor

Arbiter is hereby REVERSED and SET ASIDE, a new one entered declaring
complainants illegally dismissed by Respondents who are hereby ORDERED to pay
complainants the following, as per attached computation:

Magdalino O. Rivera Roberto B. Yago

1. Separation pay -₱133,320.00 145,440.00
2. Full backwages -1,017,522.21 1,017,522.21
3. Underpaid wages -18,713.47 17,882.59
4. Underpaid service
incentive leave pay -209.91 248.37
5. Underpaid 13th month
pay -1,559.46 1,490.22
6. Moral damages -10,000.00 10,000.00
7. Exemplary damages -10,000.00 10,000.00
Sub-total -₱1,191,375.05 ₱1,202,583.39
8. 10% attorney's fees 119,137.50 120,258.34
TOTAL -₱1,310,512.55 ₱1,322,841.72

Other claims are however dismissed for lack of basis.

SO ORDERED.23

Contrary to the LA's findings, the NLRC found that respondents were illegally
dismissed by Capt. Cura, the Operations Manager of petitioner Symex, who told
them that unless they withdrew their complaint for money claims pending before
the LA, their services would be terminated. It held that the burden of proving that
the dismissal of an employee was for a valid or authorized cause lies on the
employer, and that failure to discharge this burden of proof makes the employer
liable for illegal dismissal. The NLRC found that petitioners failed to prove, with
substantial evidence, that respondents were furnished with a written order of
detail or re-assignment. It added that neither were respondents guilty of
abandonment of work as they immediately amended their complaint for money
claims to include a complaint for illegal dismissal. The NLRC relied on A'Prime
Security Services, Inc. v. NLRC24 which held that abandonment of work is
inconsistent with the filing of a complaint for illegal dismissal.25

Accordingly, the NLRC held that respondents are entitled to separation pay at one
month per year of service from the time of their employment up to the finality of
the decision with backwages and monetary claims, subject to the three-year
prescriptive period. It also awarded respondents ten thousand pesos (₱l0,000.00)
each as moral damages and exemplary damages in the same amount, plus ten
percent (10%) of the total monetary award as attorney's fees.26

Petitioners moved for reconsideration, but this was denied in a Resolution27 dated
February 7, 2011. Dissatisfied, they filed a petition for certiorari28 before the CA.

The CA Ruling

In a Decision29 dated January 12, 2012, the CA affirmed the questioned NLRC
Decision.

It held that the NLRC did not gravely abuse its discretion as the undisputed facts
clearly established respondents to have been illegally dismissed and that
petitioners used their prerogative to reassign and post security guards, merely as
leverage to cause the withdrawal of the labor complaint filed against them by
respondents.30

The CA likewise found that the NLRC sufficiently ruled on respondents' money
claims. It ruled that once the employee has set out with particularity in his
complaint, position paper, affidavits and other documents the labor standard
benefits he is entitled to, and which the employer allegedly failed to pay him, it
becomes the employer's burden to prove that it has paid these money claims.
One who pleads payment has the burden of proving it; and even where the
employees must allege nonpayment, the general rule is that the burden rests on
the defendant to prove payment, rather than on the plaintiff to prove
nonpayment.31

The CA also affirmed the award for moral and exemplary damages as well as
attorney's fees.32

Petitioners filed a motion for reconsideration33 dated February 9, 2012, which

was, however, denied in a Resolution34 dated June 27, 2012.

The Issues Before the Court

The issues for the Court's resolution are whether or not: (a) the CA correctly ruled
that the NLRC did not gravely abuse its discretion, and consequently, held that
respondents were illegally dismissed; (b) petitioners are liable to respondents for
backwages, service incentive leave pay, 13th month pay, separation pay, moral
damages, exemplary damages and attorney's fees; and (c) petitioner Arcega
should be held solidarily liable with petitioner Symex for respondents' monetary
awards.

The Court's Ruling

The petition is without merit.

NLRC did not commit grave abuse of

discretion.

"To justify the grant of the extraordinary remedy of certiorari, the petitioner must
satisfactorily show that the court or quasi-judicial authority gravely abused the
discretion conferred upon it. Grave abuse of discretion connotes a capricious and
whimsical exercise of judgment, done in a despotic manner by reason of passion
or personal hostility, the character of which being so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law."35

"In labor disputes, grave abuse of discretion may be ascribed to the NLRC
when, inter alia, its findings and conclusions are not supported by substantial
evidence, or that amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion."36
Guided by the foregoing considerations, the Court finds that the CA correctly
found no grave abuse of discretion on the part of the NLRC in reversing the LA
ruling, as the LA's finding that respondents were not illegally dismissed from
employment is not supported by substantial evidence.

A judicious review of the records of the case reveals that respondents were
dismissed by Capt. Cura, the Operations Manager of petitioner Symex. Even as the
Court has acknowledged the management prerogative of security agencies to
transfer security guards when necessary in conducting its business, it likewise has
repeatedly held that this should be done in good faith.37

In the case of Exocet Security and Allied Services Corporation v. Serrano,38 the
Court ruled that the security agency was able to prove that it was in good faith
when it placed the security guard on floating status and was therefore not guilty
of illegal dismissal nor constructive dismissal. The evidence presented by the
security agency showed that the security guard's own refusal to accept a non-VIP
detail was the reason that he was not given an assignment within the six-month
period. The Court, in the subject case, ruled that it was manifestly unfair and
unacceptable to immediately declare the mere lapse of the six-month period of
floating status as a case of constructive dismissal, without looking into the
peculiar circumstances that resulted in the security guard's failure to assume
another post.39The Court emphasized that:

[T]he security guard's right to security of tenure does not give him a vested right
to the position as would deprive the company of its prerogative to change the
assignment of, or transfer the security guard to, a station where his services
would be most beneficial to the client. Indeed, an employer has the right to
transfer or assign its employees from one office or area of operation to another,
or in pursuit of its legitimate business interest, provided there is no demotion in
rank or diminution of salary, benefits, and other privileges, and the transfer is not
motivated by discrimination or bad faith, or effected as a form of punishment or
demotion without sufficient cause.40

In the controversy now before this Court, there is no question that respondents
were placed on floating status after their relief from their post in Guevent. The
crux of the controversy lies in whether or not this floating status was actually a
dismissal.
Respondents were illegally dismissed.

Petitioner Symex insists that Capt. Cura did not constructively dismiss
respondents, explaining that they refused to accept their new assignments on the
ground that their new postings would be inconvenient to them.41 Respondents,
on the other hand, maintain that they did not refuse reassignment nor did they
abandon their work.42 The narration of respondents is enlightening:

Noon February 26, 2003 nagkaisa kami na iparating na sa Labor para makuha
naming [ ang aming] mga benepisyo na dapat mapasamin. At noong March 13,
2003 tumawag si Captain Cura (Operation Ma[n]ager ng SYMEX SCTY. SVCS.) na
magreport daw kaming dalawa sa SYMEX OFFICE, kinabukasan March 14, 2003,
mga 9:00 A.M. dumating kami sa SYMEX OFFICE, binigyan kami ng order na inaalis
daw kami sa kliyente dahil nagbawas [daw ng] gwardiya doon at nagtaka kami
dahil marami nam[a]ng baguhan pa doon pero kami talaga ang tinanggal na
matagal na at sinabi sa amin na magreport kami sa lunes March 17, 2003 para sa
panibagong duty daw sa ibang kliyente.

Noong March 17, 2003 dumating kami sa SYMEX OFFICE band[a]ng 9:00 A.M. at
ito ang sinabi sa amin na hindi daw kami pwedeng bigyan ng duty dahil idinamay
daw [ namin] ang agency at hindi daw kami pwedeng magtrabaho sa agency
habang hindi pa naaayos ang kaso. At sa panahon pala na iyon natanggap na nila
ang demanda [namin] [galing] sa Labor at doon kami inutusan ni Capt. Cura na
kumuha daw kami ng Affidavit of Desistance at saka ibabalik daw kami sa duty at
sa katunayan binigyan pa kami ng sample kung paano kumuha ng affidavit of
desistance, at kung hindi daw kami kumuha ng nasabing affidavit magleave na
lang daw kami o m[a]gresign at bago kami umalis sa opisina ng SYMEX humingi
kami ng pabor na mag log man lang kami para sa aming attendance sa araw na
iyon. Pero tumanggi si Kapitan Cura na magsulat kami sa Log book nya. Tapos
kinausap din [ namin] ang kasama nya sa opisina na si Y olly Ansus na mag-log
kami para sa aming attendance, siya ay tumanggi at sabi niya ay baka daw magalit
si Capt. Cura. At kinabukasan March 18, 2003 pumunta kami sa NLRC para
amendahan [ang aming] demanda laban sa SYMEX at idinagdag [namin] ang
Illegal Dismisal (actual) at noong April 3, 2003 sa araw ng Hearing [ namin],
natanggap ni Capt. Cura ang amended complaint [namin].43

In cases of illegal dismissal, the employees must first establish by substantial

evidence that they were dismissed. If there is no dismissal, then there can be no
question as to the legality or illegality thereof.44 In Machica v. Roosevelt Sendces
Center, lnc.,45 the Court enunciated:

The rule is that one who alleges a fact has the burden of proving it; thus,
petitioners were burdened to prove their allegation that respondents dismissed
them from their employment. It must be stressed that the evidence to prove this
fact must be clear, positive and convincing. The rule that the employer bears the
burden of proof in illegal dismissal cases finds no application here because the
respondents deny having dismissed the petitioners.46

To the mind of the Court, the NLRC did not err in finding that respondents had
substantially discharged this burden. Apart from their sworn declarations,
respondents offered the sample affidavit of desistance given them by Capt. Cura
to support their narration that Capt. Cura threatened to terminate them unless
they executed such affidavit of desistance. The NLRC found the narration of
respondents convincing:

On complainants' claim that they were illegally dismissed, suffice it to state that
complainants' following narration is convincing: that they were relieved from
their post upon request of respondent's client to reduce the assigned security
guards in their place to reduce their expenses; that Complainants were thus
relieved and when they reported to respondent's office, they were told to go back
for re-assignment; that meantime, complainants already filed a complaint for
money claims against respondents; that when complainants returned to
respondent's office, they were told by no less than the General Manager that
their services were terminated due to the complaint they filed and as a condition
for their reposting or re-assignment, they were ordered first to withdraw their
complaint but they refused; that Complainants then amended their earlier
complaint to illegal dismissal.

From the foregoing narration, it can be easily inferred that complainants were
dismissed categorically. There can be no abandonment on their part as they even
immediately amended their complaint to include illegal dismissal when they were
given a condition to withdraw their complaint first before they could be given
assignment. Such condition is illegal and unwarranted. x x x47 (Emphasis supplied)
The CA also found that petitioner Symex used its prerogative to reassign its
security guards as leverage in the withdrawal of the labor complaint filed against
petitioners by respondents, viz.:

We find nothing reversible in the ruling of the NLRC in finding illegal the dismissal
of the private respondents.

The assertion of Symex that the private respondents committed abandonment is

contrary to the circumstances herein presented. While it is a recognized
prerogative for the employer in the security services to reassign and post its
security guards from time to time for the exigency of service, We however hold
that in this case, the petitioner used such prerogative as a leverage in the
withdrawal of the labor complaint filed against them by the private respondents.

It is well to remember that the private respondents in this case initially filed a
labor complaint for monetary claims prior to their recall to the head office for
possible reassignment and new postings. To believe that the private respondents
refused to the new postings assigned to them because it will inconvenience them
is unlikely and contrary to human experience.48 (Emphasis supplied)

Petitioners, on the other hand, failed to discharge their burden of proving that the
termination of respondents was for a valid or authorized cause. In fact, they
simply maintained that respondents were not illegally dismissed because they
refused their new assignments. Yet, petitioners offered no evidence at all to prove
respondents' alleged new assignments or respondents' refusal to accept the
same. All that petitioners offer as proof that respondents were not dismissed is
the argument that respondents remained in the roll of the security guards of
petitioner Symex. And yet, petitioners failed to even present said roll of security
guards to prove this assertion.

Respondents are not guilty of

abandonment.

The Court further agrees with the findings of the CA that respondents were not
guilty of abandonment. Tan Brothers Corporation of Basilan City v.
Escudero49 extensively discussed abandonment in labor cases:

As defined under established jurisprudence, abandonment is the deliberate and

unjustified refusal of an employee to resume his employment. It constitutes
neglect of duty and is a just cause for termination of employment under
paragraph (b) of Article 282 [now Article 297] of the Labor Code. To constitute
abandonment, however, there must be a clear and deliberate intent to
discontinue one's employment without any intention of returning. In this regard,
two elements must concur: (1) failure to report for work or absence without valid
or justifiable reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor and being
manifested by some overt acts. Otherwise stated, absence must be accompanied
by overt acts unerringly pointing to the fact that the employee simply does not
want to work anymore. It has been ruled that the employer has the burden of
proof to show a deliberate and unjustified refusal of the employee to resume his
employment without any intention of returning.50 (Emphasis supplied)

In this case, the respondents' act of filing a complaint for illegal dismissal with
prayer for reinstatement belies any intention to abandon employment.51 To be
sure, the immediate filing of a complaint for illegal dismissal, more so when it
includes a prayer for reinstatement, has been held to be totally inconsistent with
a charge of abandonment.52To reiterate, abandonment is a matter of intention
and cannot be lightly inferred, much less legally presumed, from certain equivocal
acts.53

The rule is that factual findings of quasi-judicial agencies such as the NLRC are
generally accorded not only respect, but at times, even finality because of the
special knowledge and expertise gained by these agencies from handling matters
falling under their specialized jurisdiction.54 It is also settled that this Court is not a
trier of facts and does not normally embark in the evaluation of evidence adduced
during trial.55

The Court has consistently ruled in the recent decisions of Perea v. Elburg
Shipmanagement Philippines, Inc.56 and Madridejos v. NYK-Fil Ship Management,
Inc.,57 that the factual findings of the NLRC, when confirmed by the CA, are usually
conclusive on this Court:

[T]his Court limits itself to questions of law in a Rule 45 petition:

As a rule, we only examine questions of law in a Rule 45 petition. Thus, "we do

not re-examine conflicting evidence, re-evaluate the credibility of witnesses, or
substitute the findings of fact of the [National Labor Relations Commission], an
administrative body that has expertise in its specialized field." Similarly, we do not
replace our "own judgment for that of the tribunal in determining where the
weight of evidence lies or what evidence is credible." The factual findings of the
National Labor Relations Commission, when confirmed by the Court of Appeals,
are usually "conclusive on this Court."58

Award of separation pay is proper.

Separation pay is warranted when the cause for termination is not attributable to
the employee's fault, such as those provided in Articles 29859 to 29960 of the Labor
Code, as well as in cases of illegal dismissal where reinstatement is no longer
feasible.61

The payment of separation pay and reinstatement are exclusive

remedies.62 In Dee Jay's Inn and Cafe v. Raneses,63 the Court ruled that "[i]n a case
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."64 The circumstances in this case, however, warrant the
application of the doctrine of strained relations.

Under the doctrine of strained relations, the payment of separation pay is

considered an acceptable alternative to reinstatement when the latter option is
no longer desirable or viable. On one hand, such payment liberates the employee
from what could be a highly oppressive work environment. On the other hand, it
releases the employer from the grossly unpalatable obligation of maintaining in
its employ a worker it could no longer trust.65

Strained relations must be demonstrated as a fact.66 The doctrine of strained

relations should not be used recklessly or applied loosely nor be based on
impression alone.67

On this score, the NLRC has made a factual finding, sustained by the CA, that the
length of time this case has dragged has invariably resulted in a strain in the
relations between respondents and petitioners, so that reinstatement is now
impossible. Once more, this factual finding is binding on this Court. Accordingly,
the award for separation pay is proper.
Award of other money claims, moral
and exemplary damages are
warranted.

With respect to the award of money claims, as well as moral and exemplary
damages, the sole office of the writ of certiorari, as aptly pointed out by the CA, is
the correction of errors of jurisdiction including the commission of grave abuse of
discretion amounting to lack or excess of jurisdiction.68 It does not include
correction of the NLRC's evaluation of the evidence or of its factual
findings.69 Such findings are generally accorded not only respect but also finality.70

In this case, it is noteworthy to stress that respondents have presented their pay
slips to prove their monetary claims. It is settled that once the employee has set
out with particularity in his complaint, position paper, affidavits and other
documents the labor standard benefits he is entitled to, and which the employer
failed to pay him, it becomes the employer's burden to prove that it has paid
these money claims. Once more, he who pleads payment has the burden of
proving it; and even where the employees must allege nonpayment, the general
rule is that the burden rests on the defendant to prove payment, rather than on
the plaintiff to prove nonpayment.71 Petitioners could have easily presented
pertinent company records to disprove respondents' claims. Yet, the records of
the case are bereft of such company records thus giving merit to respondents'
allegations. It is a rule that failure of employers to submit the necessary
documents that are in their possession as employers gives rise to the
presumption that the presentation thereof is prejudicial to their cause.72

Moral damages are recoverable when the dismissal of an employee is attended by

bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner
contrary to good morals, good customs or public policy. Exemplary damages, on
the other hand, are recoverable when the dismissal was done in a wanton,
oppressive, or malevolent manner.73

The Court also affirms the award of moral and exemplary damages to
respondents. As aptly pointed out by both the NLRC and the CA, the acts
constitutive of respondents' dismissal are clearly tainted with bad faith as they
were done to punish them for filing a complaint against petitioner Symex before
the LA and for their refusal to withdraw the same.
Petitioner Arcega is not liable for
obligations of petitioner Symex absent
showing of gross negligence or bad
faith on his part.

Finally, as to petitioner Arcega's liability for the obligations of Symex to

respondents, the Court notes that there was no showing that Arcega, as President
of Symex, willingly and knowingly voted or assented to the unlawful acts of the
company.

In Guillermo v. Uson,74 the Court resolved the twin doctrines of piercing the veil of
corporate fiction and personal liability of company officers in labor cases.
According to the Court:

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
imparts 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.

As the foregoing implies, 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. For the case at bar, applying the above criteria, a finding
of personal and solidary liability against a corporate officer like Guillermo must be
rooted on a satisfactory showing of fraud, bad faith or malice, or the presence of
any of the justifications for disregarding the corporate fiction.75 (Emphasis
supplied)
A corporation is a juridical entity with a legal personality separate and distinct
from those acting for and in its behalf and, in general, from the people comprising
it.76 Thus, as a general rule, an officer may not be held liable for the corporation's
labor obligations unless he acted with evident malice and/or bad faith in
dismissing an employee.77Section 3178 of the Corporation Code is the governing
law on personal liability of officers for the debts of the corporation. To 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.79

Based on the records, respondents failed to specifically allege either in their

complaint or position paper that Arcega, as an officer of Symex, willfully and
knowingly assented to the acts of Capt. Cura, or that Arcega had been guilty of
gross negligence or bad faith in directing the affairs of the corporation. In fact,
there was no evidence at all to show Arcega's participation in the illegal dismissal
of respondents. Clearly, the twin requisites of allegation and proof of bad faith,
necessary to hold Arcega personally liable for the monetary awards to the
respondents, are lacking.

Arcega is merely one of the officers of Symex and to single him out and require
him to personally answer for the liabilities of Symex are without basis.

The Court has repeatedly emphasized that the piercing of the veil of corporate
fiction is frowned upon and can only be done if it has been clearly established that
the separate and distinct personality of the corporation is used to justify a wrong,
protect fraud, or perpetrate a deception.80 To disregard the separate juridical
personality of a corporation, the wrongdoing must be established clearly and
convincingly. It cannot be presumed.

WHEREFORE, the petition is DENIED. The Decision dated January 12, 2012 and
the Resolution dated June 27, 2012 of the Court of Appeals in CA-G.R. SP No.
119039 are hereby AFFIRMED with MODIFICATION in that petitioner Rafael Y.
Arcega is absolved from solidary liability.

SO ORDERED.
ALFREDO BENJAMIN S. CAGUIOA
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

(On official leave)

DIOSDADO M. PERALTA
ESTELA M. PERLAS-BERNABE*
Associate Justice
Associate Justice

ANDRES B. REYES, JR.

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decisionhad been reached in

consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to the Section 13, Article VIII of the Constitution and the Division
Chairperson’s Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.

MARIA LOURDES P.A. SERENO

Chief Justice
Footnotes
*
On official leave.
1
Rollo, pp. 10-35.
2
Id. at 36-48. Penned by Associate Justice Romeo F. Barza, with Associate
Justices Noel G. Tijam (now a Member of this Court) and Edwin D. Sorongon
concurring.
3
Id. at 49-50.
4
Id. at 116-129. Penned by Commissioner Teresita D. Castillon-Lora, with
Presiding Commissioner Raul T. Aquino concurring while Commissioner
Napoleon M. Menese took no part.
5
Id. at 143-144.
6
Id. at 91-98. Penned by Labor Arbiter Enrique L. Flores, Jr.
7
Id. at 51-54.
8
Id. at 37.
9
Id.
10
Id. at 37-38.
11
Id. at 38.
12
Id.
13
Id.
14
Id. at 38-39.
15
Id. at 53-54.
16
Id. at 39.
17
See id. at 39-40.
18
Id. at 91-98.
19
Id. at 98.
20
Id. at 96-97.
21
Id. at 97.
22
Id. at 116-129.
23
Id. at 128-129.
24
292-A Phil. 239, 244 (1993).
25
Rollo, pp. 126-127.
26
Id. at 128.
27
Id. at 143-144.
28
Id. at 145-170.
29
Id. at 36-48.
30
Id. at 43.
31
Id. at 45-46, citing Grandreq Industrial Steel Products, Inc. v.
Margallo, 611 Phil. 612, 629 (2009).
32
Id. at 46.
33
CA rollo, pp. 192-195.
34
Rollo, pp. 49-50.
35
Sta. Isabel v. Perla Compañia De Seguros, Inc., G.R. No. 219430,
November 7, 2016, p. 6, citing Cebu People's Multi-Purpose Cooperative v.
Carbonilla, Jr., 779 Phil. 563, 579 (2016).
36
Id.
37
Exocet Security and Allied Services Corporation v. Serrano, 744 Phil. 403,
418 (2014).
38
Id.
39
Id. at 420.
40
Id., citing Salvaloza v. National Labor Relations Commission, 650 Phil. 543,
557 (2010).
41
Rollo, p. 24.
42
Id. at 201-202.
43
Records, pp. 9-10.
44
Exodus International Construction Corporation v. Biscocho, 659 Phil. 142,
154 (2011).
45
523 Phil. 199 (2006).
46
Id. at 209-210.
47
Rollo, pp. 126-127.
48
Id. at 43.
49
713 Phil. 392 (2013).
50
Id. at 400-401.
51
See Pentagon Steel Corporation v. Court of Appeals, 608 Phil. 682, 696-
697 (2009).
52
Chavez v. NLRC, 489 Phil. 444, 460 (2005).
53
Mallo v. Southeast Asian College, Inc., 771Phil.410, 421 (2015).
54
General Milling Corporation v. Viajar, 702 Phil. 532, 540 (2013),
citing Eureka Personnel & Management Services, Inc. v. Valencia, 610 Phil.
444, 453 (2009).
55
Id., citing Eureka Personnel & Management Services, Inc. v. Valencia, id.
at 452-453 and Bernarte v. Philippine Basketball Association, 673 Phil. 384
(2011).
56
G.R. No. 206178, August 9, 2017.
57
G.R. No. 204262, June 7, 2017.
58
Perea v. El burg Shipmanagement Philippines, Inc., supra note 4 7, at 10,
citing Madridejos v. NYK-Fil Ship Management, Inc., id. at 13-14.
59
As renumbered pursuant to Department Advisory No. 01, Series of 2015.

ART. 298 [Formerly Article 283]. Closure of Establishment and Reduction of

Personnel. - The employer may also terminate the employment of any
employee due to the installation of laborsaving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of
the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the
workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the
installation of labor-saving devices or redundancy, the worker affected
thereby shall be entitled to a separation pay equivalent to at least his one
(1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases
of closures or cessation of operations of establishment or undertaking not
due to serious business losses or financial reverses, the separation pay shall
be equivalent to one (1) month pay or at least one-half (l/2) month pay for
every year of service, whichever is higher. A fraction of at least six (6)
months shall be considered one (1) whole year.
60
ART. 299 [Formerly Article 284]. Disease as Ground for Termination. - An
employer may terminate the services of an employee who has been found
to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his
co-employees: Provided, That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2) month salary for every year
of service, whichever is greater, a fraction of at least six (6) months being
considered as one (1) whole year.
61
Reno Foods, Inc. and/or Khu v. Nagkakaisang Lakas ng Manggagawa
(NLM)-Katipunan, 629 Phil. 247, 257 (2010).
62
Bani Rural Bank, Inc. v. De Guzman, 721 Phil. 84, 100 (2013).
63
G.R. No. 191823, October 5, 2016, 805 SCRA 143.
64
Id. at 167.
65
Bank of Lubao, Inc. v. Manabat, 680 Phil. 792, 801 (2012).
66
Paguio Transport Corporation v. NLRC, 356 Phil. 158, 171 (1998).
67
Tenazas v. R. Villegas Taxi Transport, 731Phil.217, 232 (2014).
68
Rollo, p. 46.
69
Id.
70
Id. at 46-47.
71
Grandteq Industrial Steel Products, Inc. v. Margallo, supra note 31, at 629.
72
See National Semiconductor (HK) Distribution, Ltd. v. NLRC, 353 Phil. 551,
558 (1998).
73
Kay Products Inc. v. Court of Appeals, 502 Phil. 783, 798 (2005); Norkis
Trading Co., Inc. v. NLRC, 504 Phil. 709, 719-720 (2005).
74
G.R. No. 198967, March 7, 2016, 785 SCRA 543.
75
Id. at 556-557.
76
The Coffee Bean and Tea Leaf Philippines, Inc. v. Arenas, 755 Phil. 882,
891 (2015).
77
Id. at 891-892.
78
SEC. 31. Liability of directors, trustees or officers. - Directors or trustees
who willfully and knowingly vote for or assent to patently unlawful acts of
the corporation or who are guilty of gross negligence or bad faith in
directing the affairs of the corporation or acquire any personal or pecuniary
interest in conflict with their duty as such directors or trustees shall be
liable jointly and severally for all damages resulting therefrom suffered by
the corporation, its stockholders or members and other persons.
79
Heirs of Fe Tan Uy v. International Exchange Bank, 703 Phil. 477, 486
(2013).
80
Id. at 487.