G.R. No. 159390; June 10, 2004
GALLERA DE GUISON HERMANOS, INC., CARLO REYES and PACITA REYES, petitioners, vs. CALLEJO, SR., and MA. ASUNCION C. CRUZ, respondent.

FACTS

Private respondent Ma. Asuncion C. Cruz was a cashier and stockholder of petitioner Gallera de Guison Hermanos, Inc. On February 15, 1998, she requested a transfer to the position of Liaison Officer, citing a desire for a more challenging role. The company’s counsel denied her request. Cruz then went on sick leave from February 24 to March 5, 1998. During her leave, petitioners appointed a relative, Antonio G. Reyes, as the new cashier. Upon her intended return, she was instructed to cease working as cashier and to report on a “no work, no pay” basis while her transfer was studied.
Subsequently, Cruz was designated as Liaison Officer, as reflected in payrolls from October to November 1999. On November 13, 1999, her salary was withheld and her designation was removed from the payroll. She thereafter stopped reporting for work. The company later sent letters asking her to explain her absences and to report back, but she had already filed a complaint for illegal dismissal on March 8, 2000. The Labor Arbiter ruled in her favor, awarding separation pay, backwages, and attorney’s fees. The NLRC dismissed the company’s appeal for being filed out of time, a dismissal affirmed by the Court of Appeals.

ISSUE

Whether the Court of Appeals erred in affirming the findings that Cruz was illegally dismissed and that the individual petitioners are solidarily liable for her monetary claims.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court upheld the uniform factual findings of the Labor Arbiter, NLRC, and Court of Appeals that Cruz was constructively dismissed. Her initial request for transfer did not constitute a resignation. The act of replacing her as cashier during her sick leave and subsequently demoting her to a “no work, no pay” liaison position, which involved a diminution in rank, salary, and benefits, amounted to illegal constructive dismissal. The Court found no merit in the petitioners’ claim of estoppel, as Cruz’s subsequent performance of the liaison duties under protest did not validate the unlawful demotion.
Regarding solidary liability, the Court sustained the finding that individual petitioners Carlo and Pacita Reyes, as corporate officers who assented to and implemented the illegal transfer, acted in bad faith. Their actions were not performed in good faith within the scope of their corporate duties, thus piercing the corporate veil and holding them personally and solidarily liable with the corporation for the monetary awards. The Court reiterated the doctrine that factual findings of lower tribunals, when supported by substantial evidence and in agreement with each other, are binding and conclusive.