GR 233781; (July, 2019) (Digest)
G.R. No. 233781 , July 8, 2019
Department of Labor and Employment (DOLE), Petitioner, vs. Kentex Manufacturing Corporation and Ong King Guan, Respondents.
FACTS
A fire at Kentex Manufacturing Corporation’s factory resulted in numerous fatalities and injuries. The DOLE-National Capital Region (DOLE-NCR) conducted an investigation and discovered that the workers were deployed by CJC Manpower Services, an unregistered entity. The DOLE-NCR and DOLE Regional Office III found CJC to be a labor-only contractor, making Kentex the principal employer liable for labor standard violations, including underpayment of wages. In its June 26, 2015 Order, the DOLE-NCR held Kentex and its corporate officers, including Chief Finance Officer Ong King Guan, solidarily liable for monetary awards to the workers. Ong filed a motion for reconsideration with the DOLE-NCR, which was denied as an improper remedy; the proper appeal to the DOLE Secretary was not filed, rendering the order final. Kentex and Ong subsequently filed a petition for review with the Court of Appeals under Rule 43.
ISSUE
Whether the Court of Appeals correctly discharged corporate officer Ong King Guan from personal and solidary liability for the monetary awards.
RULING
The Supreme Court reversed the Court of Appeals and reinstated Ong’s solidary liability. The Court clarified that the CA erred in taking cognizance of the Rule 43 petition. The DOLE-NCR’s June 26, 2015 Order was a final compliance order issued under the labor laws compliance system. The proper remedy from such an order was an appeal to the DOLE Secretary, not a petition to the CA. Ong’s failure to perfect this appeal rendered the DOLE-NCR Order final and executory, precluding any further challenge to its findings on liability. Consequently, the CA had no jurisdiction to absolve Ong.
On the substantive issue, the Court held that corporate officers can be held personally liable for corporate debts arising from labor violations. This liability attaches when the officer acts on behalf of the corporation in its dealings with employees. The DOLE-NCR Order explicitly named Ong as a party-respondent and found him solidarily liable based on his capacity as a corporate officer involved in the employment relationship. The finality of the DOLE Order conclusively established this finding. Therefore, Ong is not shielded by the corporate veil and must answer for the awards jointly with Kentex.