G.R. No. 116123 March 13, 1997
SERGIO F. NAGUIAT, doing business under the name and style SERGIO F. NAGUIAT ENT., INC., & CLARK FIELD TAXI, INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION), NATIONAL ORGANIZATION OF WORKINGMEN and its members, LEONARDO T. GALANG, et al., respondents.

FACTS

Petitioner Clark Field Taxi, Inc. (CFTI), with Sergio F. Naguiat as president, held a concession to operate taxi services within Clark Air Base. Individual respondents were its taxi drivers, paying a daily “boundary fee” and bearing vehicle maintenance costs. Their employment was terminated on November 26, 1991, due to the closure of Clark Air Base following the Mt. Pinatubo eruption and the expiration of the RP-US military bases agreement. CFTI and the drivers’ union negotiated a separation pay of P500 per year of service, which most drivers accepted. The individual respondents, however, refused, disaffiliated from the union, and filed a complaint through the National Organization of Workingmen for proper separation pay, also impleading Sergio F. Naguiat Enterprises, Inc. and its officers.
The Labor Arbiter found the drivers to be regular employees of CFTI. He rejected CFTI’s claim of closure due to serious business losses, noting the cessation was caused by the base closure, a force majeure event. He deemed strict application of the Labor Code on separation pay unfair to the employer but, for humanitarian consideration, awarded P1,200 per year of service. On appeal, the NLRC modified the award, granting separation pay at US$120 for every year of service (or its peso equivalent) and held Naguiat Enterprises and its officers jointly and severally liable with CFTI.

ISSUE

1. Are the employees entitled to separation pay due to the closure, and in what amount?
2. Are corporate officers ipso facto jointly and severally liable for the payment?

RULING

Yes, the employees are entitled to separation pay. The closure was not due to serious business losses as defined by law but was an involuntary cessation precipitated by governmental and natural events—the base treaty expiration and volcanic eruption. While these events may constitute force majeure relieving the employer from fault, Article 283 of the Labor Code mandates separation pay for closures not due to serious business losses. The legal obligation arises from the law itself, not from employer culpability. The NLRC correctly computed this at one-half month pay per year of service, based on the drivers’ average daily earnings of US$15 for 16 days a month, resulting in US$120 per year.
No, corporate officers are not automatically liable. The doctrine of separate corporate personality generally shields officers from personal liability for corporate debts. Personal liability attaches only when officers act with evident bad faith or malice, or when the corporation is used as a mere alter ego. The NLRC’s finding of joint and solidary liability was based on a perceived “labor-only contracting” arrangement between CFTI and Naguiat Enterprises. However, the Supreme Court found no substantial evidence to support this conclusion. The complaint originally alleged Naguiat Enterprises as the employer, but the Labor Arbiter definitively ruled CFTI as the direct employer. Without proof that the corporate veil was used to defeat labor obligations, the officers cannot be held personally liable. The liability for separation pay rests solely with the corporate employer, CFTI.