People's Security, Inc. and Nestor Racho vs. Flores and Tapiru Case Digest

People's Security, Inc. and Nestor Racho vs. Julius S. Flores and Esteban S. Tapiru

G.R. No. 211312. December 5, 2016

Facts

Julius S. Flores and Esteban S. Tapiru (respondents) were security guards previously employed by People's Security, Inc. (PSI). The respondents were assigned at the varfous facilities of Philippine Long Distance Telephone Company (PLDT) pursuant to a security services agreement between PSI and PLDT. On October 1, 2001, however, PSI's security services agreement with PLDT was terminated and, accordingly, PSI recalled its security guards assigned to PLDT including the respondents. On October 8, 2001, the respondents, together with several other security guards employed by PSI, filed a complaint for illegal dismissal with the National Labor Relations Commission (NLRC) against PLDT and PSI, claiming that they are PLDT employees.

Thereafter, PSI assigned the respondents to the facilities of its other clients such as the warehouse of a certain Marivic Yulo in Sta. Ana, Manila and Trinity College's Elementary Department in Quezon City.

Meanwhile, on January 13, 2003, the respondents were relieved from their respective assignments pursuant to Special Order No. 200310108 dated January 10, 2003 issued by Col. Leonardo L. Aquino, the Operations Manager of PSI.9 Accordingly, Flores and Tapiru, on September 6 and 27, 2005, respectively, filed with the Regional Arbitration Branch of the NLRC in Quezon City a complaint for illegal dismissal and non-payment of service incentive leave pay and cash bond, with prayer for separation pay, against PSI and its President Nestor Racho (Racho) (collectively, the petitioners).

In their position paper, the respondents claimed that, after they were relieved from their assignment in the warehouse in Sta. Ana, Manila on January 13, 2003, they repeatedly reported to PSI's office for possible assignment, but the latter refused to give them any assignment. On the other hand, the petitioners, in their position paper, claimed that the respondents were merely relieved from their assignment in the warehouse in Sta. Ana, Manila and that the same was on account of their performance evaluation, which indicated that they were ill-suited for the said assignment.

On January 30, 2009, the LA rendered a Decision finding that the respondents were illegally from their employment and, thus, directing the petitioners jointly and severally liable to pay the former separation pay and backwages.

On appeal, the NLRC, in its Decision dated April 14, 2010, reversed the LA Decision dated January 30, 2009. On April 25, 2013, the CA rendered the herein assailed Decision, reversing the NLRC's Decision dated April 14, 2010 and Resolution dated June 15, 2010. In finding that the respondents were illegally dismissed, the CA found that the petitioners failed to prove that the respondents had abandoned their work and that their defense of abandonment was negated by the filing of a case for illegal dismissal.

In this petition for review on certiorari, the petitioners claim that the CA committed reversible error in ruling that the respondents were illegally dismissed from their employment. They maintain that PSI never terminated the respondents' employment. On the contrary, they claim that the respondents freely and voluntarily resigned from their employment. They also claim that the CA erred when it ruled that they should be held jointly and solidarily liable to pay the respondents separation pay and backwages considering that there was absolutely no allegation or proof of participation, bad faith, or malice on the part of Racho in dealing with the respondents.

Issues:

1. Whether respondents were illegally dismissed.
2. Whether Racho is jointly and solidarily liable with PSI for the payment of the monetary awards to the respondents.

Rulings

1. Yes. a As rule, employment cannot be terminated by an employer without any just or authorized cause. No less than the 1987 Constitution in Section 3, Article 13 guarantees security of tenure for workers and because of this, an employee may only be terminated for just or authorized causes that must comply with the due process requirements mandated by law. Hence, employers are barred from arbitrarily removing their workers whenever and however they want.

There is no merit to the petitioners' claim that the respondents were not dismissed, but merely relieved from their respective assignments. While it is true that Special Order No. 20031010, which the petitioners issued to the respondents on January 13, 2003, indicated that the latter were merely relieved from the warehouse in Sta. Ana, Manila, such fact alone would not negate the respondents' claim of illegal dismissal. Indeed, the respondents pointed out that after they were relieved from their previous assignment, the petitioners refused to provide them with new assignment.

Further, as aptly ruled by the CA, the petitioners miserably failed to prove that the respondents abandoned their work. Abandonment is a matter of intention and cannot lightly be inferred or legally presumed from certain equivocal acts. For abandonment to exist, two requisites must concur: first, the employee must have failed to report for work or must have been absent without valid or justifiable reason; and second, there must have been a clear intention on the part of the employee to sever the employer-employee relationship as manifested by some overt acts. The Court is not convinced that the respondents failed to report for work or have been absent without valid or justifiable cause. After the petitioners relieved them from their previous assignment in Sta. Ana, Manila, the respondents were no longer given any assignment.

What is more, PSI did not afford the respondents due process. The validity of the dismissal of an employee hinges not only on the fact that the dismissal was for a just or authorized cause, but also on the very manner of the dismissal itself. It is elementary that the termination of an employee must be effected in accordance with law. It is required that the employer furnish the employee with two written notices: (1) a written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; and (2) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

Beyond dispute is the fact that no written notice was sent by PSI informing the respondents that they had been terminated due to abandonment of work. This failure on the part of PSI to comply with the twin-notice requirement, indeed, placed the legality of the dismissal in question, at the very least, doubtful, rendering the dismissal illegal.

2. No. Anent, the propriety of holding Racho, PSI's President, jointly and solidarily liable with PSI for the payment of the money awards in favor of the respondents, the Court finds for the petitioners. The doctrine of piercing the corporate veil applies only when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or defend crime. In the absence of malice, bad faith, or a specific provision of law making a corporate officer liable, such corporate officer cannot be made personally liable for corporate liabilities. The respondents failed to adduce any evidence to prove that Racho, as President and General Manager of PSI, is hiding behind the veil of corporate fiction to defeat public convenience, justify wrong, protect fraud, or defend crime. Thus, it is only PSI who is responsible for the respondents' illegal dismissal.

WHEREFORE, in view of the foregoing disquisitions, the petition for review on certiorari is hereby DENIED. The Decision dated April 25, 2013 and Resolution dated February 7, 2014 of the Court of Appeals in CA-G.R. SP No. 115464 and the Decision dated January 30, 2009 of the Labor Arbiter are AFFIRMED with MODIFICATION in that petitioner Nestor Racho is held not solidarily liable with petitioner People's Security, Inc. for the payment of the monetary awards in favor of respondents Julius S. Flores and Esteban S. Tapiru.

Dimson vs. Chua Case Digest

Reyno C. Dimson vs. Gerry T. Chua

G.R. No. 192318. December 5, 2016

Facts

The instant case filed by the petitioner, representing the other 14 complainants, against the respondent, is an offshoot of the labor case entitled "Reyno Dimson, et al. v. SEASUMCO, MAC, United Coconut Planters Bank (UPCB), and Cotabato Sugar Central Co., Inc. (COSUCECO)." On September 22, 2003, the said labor case for illegal dismissal with monetary claims was decided in favor of the complainants. Hence, SEASUMCO and MAC, as well as the members of their board of directors, were ordered to pay jointly and severally the sum of Three Million Eight Hundred Twenty-Seven Thousand Four Hundred Seventy Pesos and Fifty-One Centavos (P3,827,470.51).

The LA's decision became final and executory but the judgment remained unsatisfied. Consequently, the petitioner filed an Ex-parte Motion for the issuance of an amended alias writ of execution asking for the inclusion of the board of directors arid corporate officers of SEASUMCO and MAC to hold them liable for satisfaction of the said decision.

In an Order dated August 16, 2007, the LA granted the motion; hence, an amended alias writ of execution was issued which now included the respondent. Aggrieved, the respondent elevated the matter to the NLRC by filing a Memorandum of Appeal arguing that he was denied due process.

In a Resolution dated January 11, 2008, the NLRC dismissed the appeal for lack of merit and sustained the findings of the LA. The respondent filed a Motion for Reconsideration, but the NLRC Resolution dated July 31, 2008 denied his motion.

Hence, he filed a petition for certiorari with application for temporary restraining order (TRO)/preliminary injunction before the CA. He maintained that the labor tribunals violated his right to due process when the LA authorized the issuance of the amended alias writ of execution against him for the corporation's judgment debt, although he has never been a party to the underlying suit.

Issue

Whether the respondent can be held solidarily liable with the corporation, of which he was an officer and a stockholder, when he was not served with summons and was never impleaded as a party to the case.

Ruling

No. Following the explicit language of the NLRC Rules, notices or summons shall be served on the parties to the case personally. The same rule allows under special circumstances, that service of summons may be effected in accordance with the provisions of the Rules of Court. The service of summons in cases before the LAs shall be served on the parties personally or by registered mail, provided that in special circumstances, service of summons ,.nay be effected in accordance with the pertinent provisions of the Rules of Court.

It is basic that the LA cannot acquire jurisdiction over the person of the respondent without the latter being served with summons. However, if there is no valid service of summons, court can still acquire jurisdiction over the person of the defendant by virtue of the latter's voluntary appearance. In this case, since the respondent is one of the officers of SEASUMCO, service of summons must be made to him personally or by registered mail. However, as borne by the records, it is evident that no service of summons and notices were served on the respondent and he was not impleaded in NLRC RAB Case No. 12-01-00005-03. He was hauled to the case after he reacted to the improper execution of his properties and was actually dragged to court by mere motion of the petitioner with whom he has no privity of contract and after the decision in the main case had already become final and executory.

The Court scanned the records but found nothing to indicate that summons with respect to the said complaints were ever served upon the respondent. The petitioner in fact does not even dispute· the respondent's claim that no summons or notices were ever issued and served on him either personally or through registered mail. True to his claim, the respondent, indeed, was never summoned by the LA. Besides, even assuming that the respondent has knowledge of a labor case against SEASUMCO, this will not serve the same purpose as summons to him.

More so, the respondent did not voluntarily appear before the LA as to submit himself to its jurisdiction. Contrary to the petitioner's position, the validity of a judgment or order of a court or quasi-judicial tribunal which has become final and executory may be attacked when the records show that it lacked jurisdiction to render the judgment. For a judgment rendered against one in a case where jurisdiction over his person was not acquired is void, and a void judgment maybe assailed or impugned at any time either directly or collaterally by means of a petition filed in the same or separate case, or by resisting such judgment in any action or proceeding wherein it is invoked.

Guided by the foregoing norms, the CA properly concluded that the proceedings before the LA deprived the respondent of due process. Considering that the respondent was never impleaded as a party respondent and was never validly served with summons, the LA never acquired jurisdiction over his person. Perforce, the proceedings conducted and the decision rendered are nugatory and without effect. This utter lack of jurisdiction voids any liability of the respondent for any monetary award or judgment in favor of the petitioner.

WHEREFORE, the petition is DENIED. The Decision dated August 13, 2009 and Resolution dated April 14, 2010 of the Court of Appeals in CA-G.R. SP No. 02575-MIN are AFFIRMED.

Peninsula Employees Union (PEU) vs. Esquivel, et al. Case Digest

Peninsula Employees Union (PEU) vs. Michael B. Esquivel, et al.

G.R. No. 218454. December 1, 2016

Facts:

On December 13, 2007, Peninsula Employees Union' (PEU) Board of Directors passed Local Board Resolution No. 12, series of 20078 authorizing, among others, the affiliation of PEU with NUWHRAIN, and the direct membership of its individual members thereto. On the same day, the said act was submitted to the general membership, and was duly ratified by 223 PEU members. Beginning January 1, 2009, PEU-NUWHRAIN sought to increase the union dues/agency fees from one percent (1% ) to two percent (2%) of the rank and file employees' monthly salaries, brought about by PEU's affiliation with NUWHRAIN, which supposedly requires its affiliates to remit to it two percent (2%) of their monthly salaries.

The non-PEU members objected to the assessment of increased agency fees arguing that: (a) the new CBA is unenforceable since no written CBA has been formally signed and executed by PEU-NUWHRAIN and the Hotel; (b) the 2% agency fee is exorbitant and unreasonable; and (c) PEU-NUWHRAIN failed to comply with the mandatory requirements for such increase.

Issues:

1. Whether PEU-NUWHRAIN has right to collect the increased agency fees.
2. Whether PEU-NUWHRAIN failed to comply with the mandatory requirements for such increase.
3. Whether the agency is exorbitant and unreasonable.

Rulings

1. Yes. The recognized collective bargaining union which successfully negotiated the CBA with the employer is given the right to collect a reasonable fee called "agency fee" from non-union members who are employees of the appropriate bargaining unit, in an amount equivalent to the dues and other fees paid by union members, in case they accept the benefits under the CBA. While the collection of agency fees is recognized by Article 259 (formerly Article 248) of the Labor Code, as amended, the legal basis of the union's right to agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the established principle that non-union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by the bargaining union. In the present case, PEU-NUWHRAIN's right to collect agency fees is not disputed.

2. Yes. Case law interpreting Article 250 (n) and ( o ) of the Labor Code mandates the submission of three (3) documentary requisites in order to justify a valid levy of increased union dues. These are: (a) an authorization by a written resolution of the majority of all the members at the general membership meeting duly called for the purpose; (b) the secretary's record of the minutes of the meeting, which shall include the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees; and (c) individual written authorizations for check-off duly signed by the employees concerned. In the present case, however, PEU-NUWHRAIN failed to show compliance with the foregoing requirements. It attempted to remedy the "inadvertent omission" of the matter of the approval of the deduction of two percent (2%) union dues from the monthly basic salary of each union member.

While the matter of implementing the two percent (2%) union dues was taken up during the PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008, there was no sufficient showing that the same had been duly deliberated and approved. The minutes of the Assembly itself belie PEU-NUWHRAIN's claim that the increase in union dues and the corresponding check-off were duly approved since it merely stated that "the [two percent (2%)] Union dues will have to be implemented," meaning, it would still require the submission of such matter to the Assembly for deliberation and approval.

3. Yes. Having failed to establish due deliberation and approval of the increase in union dues from one percent ( 1 % ) to two percent (2% ), as well as the deduction of the two percent (2%) union dues during PEU-NUWHRAIN's 8th General Membership Meeting on October 28, 2008, there was nothing to confirm, affirm, or ratify through the July 1, 2010 GMR. Contrary to the ruling of the OSEC in its March 6, 2012 Order, the July 1 2010 GMR, by itself, cannot justify the collection of two percent (2%) agency fees from the non-PEU members beginning July 2010. The Assembly was not called for the purpose of approving the proposed increase in union dues and the corresponding check-off, but merely to "confirm and affirm" a purported prior action which PEU-NUWHRAIN, however, failed to establish.

Corollarily, no individual check-off authorizations can proceed therefrom, and the submission of the November 2008 check-off authorizations becomes inconsequential. Jurisprudence states that the express consent of the employee to any deduction in his compensation is required to be obtained in accordance with the steps outlined by the law, which must be followed to the letter; however, PEU-NUWHRAIN failed to comply. Thus, the CA correctly ruled that there is no legal basis to impose union dues and agency fees more than that allowed in the expired CBA, i.e., at one percent (1 %) of the employee's monthly basic salary.