G.R. No. 124950 May 19, 1998
ASIONICS PHILIPPINES, INC. and/or FRANK YIH, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, YOLANDA BOAQUINA, and JUANA GAYOLA, respondents.

FACTS

Petitioner Asionics Philippines, Inc. (API) is a domestic corporation engaged in assembling semi-conductor chips and electronic products for export. Private respondents Yolanda Boaquina and Juana Gayola were employees of API, starting in 1979 and 1988, respectively. During CBA negotiations in 1992, a deadlock prompted a notice of strike, causing two major clients to withhold materials. API suspended operations due to the work shortage. After the CBA was signed in October 1992, Boaquina was recalled, but Gayola was not because her assigned client had not renewed orders. Due to continued critical business conditions, API implemented a retrenchment program affecting 105 employees. Boaquina was notified of her retrenchment effective January 31, 1993. Gayola, though not initially part of the retrenchment due to high performance, was considered terminated from September 4, 1992, when she was placed on indefinite leave and never recalled. Both employees later joined the Lakas ng Manggagawa sa Pilipinas Labor Union (Lakas Union), which staged a strike on January 10, 1993, alleging unfair labor practice and illegal dismissal. API filed a case to declare the strike illegal, which was granted by Labor Arbiter Villarente, Jr., who ruled the strikers lost their employment status. Separately, Boaquina and Gayola filed an illegal dismissal case. Labor Arbiter Canizares, Jr., found illegal dismissal, ordering separation pay for Boaquina and reinstatement with backwages for Gayola. On appeal, the NLRC modified the decision, ruling the dismissals were valid due to retrenchment but awarded separation pay and an additional month’s salary to Gayola as indemnity for lack of proper notice. The NLRC also held petitioner Frank Yih, API’s President and majority stockholder, solidarily liable. Petitioners sought certiorari, contesting the award of separation pay despite the illegal strike declaration and the personal liability of Frank Yih.

ISSUE

1. Whether private respondents, as union officers who participated in a strike declared illegal, are still entitled to separation pay and indemnity.
2. Whether a stockholder/director/officer of a corporation can be held solidarily liable for the corporation’s obligations absent proof of bad faith.

RULING

1. Yes, private respondents are entitled to separation pay and indemnity. The Supreme Court affirmed the NLRC’s finding that the termination of Boaquina and Gayola was due to API’s retrenchment program, not their union activities. The retrenchment preceded the declaration of the strike’s illegality. API’s own admissions in its pleadings confirmed that the dismissals were due to business losses and work shortage, not the strike. Therefore, their entitlement to separation pay, computed at one-half month’s pay per year of service, and the indemnity to Gayola for lack of proper notice, stands.
2. No, petitioner Frank Yih cannot be held solidarily liable. The Court modified the NLRC decision on this point. The separate corporate personality of API must be respected. Mere ownership of a majority of the corporate stock is insufficient to pierce the corporate veil. There was no evidence on record that Frank Yih acted with malice or in bad faith in carrying out the retrenchment program. His liability was merely derivative of his corporate position. Following the doctrine in “Sunio v. National Labor Relations Commission,” a corporate officer should not be held personally liable for corporate acts performed in good faith and within the scope of authority. The portion of the NLRC decision holding Frank Yih solidarily liable with API was set aside.