G.R. No. 171118 ; September 10, 2012
PARK HOTEL, J’s PLAYHOUSE BURGOS CORP., INC., and/or GREGG HARBUTT, General Manager, ATTY. ROBERTO ENRIQUEZ, President, and BILL PERCY, Petitioners, vs. MANOLO SORIANO, LESTER GONZALES, and YOLANDA BADILLA, Respondents.

FACTS

Respondents Manolo Soriano, Lester Gonzales, and Yolanda Badilla were employees of petitioners’ interrelated companies, Park Hotel and J’s Playhouse Burgos Corp. In October 1997, they were dismissed for allegedly stealing company property. The respondents filed complaints for illegal dismissal and unfair labor practice, alleging the real reason for their termination was their involvement in organizing a union. Petitioners countered that the dismissals were for just cause, citing theft and various violations of company rules documented in memoranda. However, a criminal complaint for qualified theft filed against some respondents was dismissed for insufficiency of evidence. The Labor Arbiter found the dismissals illegal, a ruling affirmed by the NLRC.
The Labor Arbiter and NLRC found petitioners failed to prove the alleged violations and observed no due process. They ruled the memoranda were fabricated, noting respondents never received them and they were created as an afterthought following the illegal dismissal complaint. The Court of Appeals affirmed the illegal dismissal finding but reduced the damages awarded. Petitioners elevated the case to the Supreme Court, contesting the findings of fact and the imposition of joint and several liability on the corporate officers.

ISSUE

The core issues were: (1) whether the findings of illegal dismissal by the labor tribunals and the CA were correct; and (2) whether the corporate officers, Gregg Harbutt and Bill Percy, could be held jointly and severally liable with the corporation for the monetary awards.

RULING

The Supreme Court denied the petition and affirmed the CA decision. On the first issue, the Court upheld the factual findings of the labor tribunals, which are accorded respect and finality when supported by substantial evidence. The Court found the petitioners failed to discharge the twin burdens of proof in dismissal cases: proving the validity of the cause for termination and proving observance of procedural due process. The alleged memoranda were deemed unreliable and fabricated, as they were not shown to have been received by the employees. The dismissal was therefore illegal.
On the second issue, the Court affirmed the joint and several liability of the corporate officers, Harbutt and Percy. The Court ruled that corporate officers may be held personally liable for corporate debts arising from illegal acts done in bad faith. The labor tribunals found the dismissals were motivated by the employees’ union activities, constituting unfair labor practice. As the officers who actively participated in the illegal dismissal characterized by union-busting, their acts were done in bad faith and with malice, making them solidarily liable with the corporation under the principle that a corporation’s separate personality can be pierced to prevent injustice. The awards for reinstatement, backwages, and damages were thus properly imposed on them personally alongside the corporate entity.