GR 163782; (March, 2006) (Digest)
G.R. No. 163782 & G.R. No. 163881; March 24, 2006
Light Rail Transit Authority and Metro Transit Organization, Inc., Petitioners, vs. Perfecto H. Venus, Jr., et al., Respondents.
FACTS
Petitioner Light Rail Transit Authority (LRTA), a government-owned corporation, entered into a ten-year management agreement with petitioner Metro Transit Organization, Inc. (METRO) for the operation of the light rail system. METRO hired its own employees, including the respondents, and entered into a collective bargaining agreement with their union. When the union declared a strike on July 25, 2000, the Secretary of Labor issued an assumption of jurisdiction order, directing an immediate return to work. The order was served, posted, and published, but the respondent workers failed to comply. Consequently, METRO dismissed them effective July 27, 2000. Subsequently, LRTA terminated its management agreement with METRO and took over direct operations, refusing to reinstate the dismissed workers.
ISSUE
The primary issue is whether the dismissal of the respondent workers by METRO was legal, and whether LRTA should be held jointly and severally liable for their dismissal.
RULING
The Supreme Court ruled that METRO illegally dismissed the respondents. The legal logic is anchored on the failure of the workers to obey a return-to-work order issued under the Secretary of Labor’s assumption of jurisdiction powers, which constitutes an illegal strike but does not automatically justify dismissal. The Court emphasized that dismissal is too severe a penalty. The workers’ failure to return was not a valid ground for termination as the law requires a hearing to determine the presence of a lawful cause. METRO’s immediate dismissal without such a proceeding was unlawful. Regarding LRTA’s liability, the Court applied the doctrine of separate juridical personality. The management agreement explicitly stated that METRO’s employees were not LRTA’s employees. LRTA and METRO maintained distinct corporate identities despite LRTA owning METRO’s shares. The termination of the management contract was a separate business decision that did not make LRTA the employer of METRO’s dismissed workers. Thus, only METRO, as the direct employer, was held liable for reinstatement, full back wages, benefits, moral damages, and attorney’s fees. The complaint against LRTA was dismissed for lack of employer-employee relationship.