GR 80502; (May, 1990) (Digest)
G.R. No. 80502 May 7, 1990
ENRIQUE RAZON, JR. and METROPORT SERVICES, INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and NICOLAS S. GARZOTA, respondents.
FACTS
Private respondent Nicolas S. Garzota had been employed by petitioner company since 1966, serving as its chief accountant. On February 28, 1986, having reached the compulsory retirement age of 65 and citing failing health, he submitted a formal request for retirement. Petitioners withheld action on his request pending an audit of the company books. During this audit, petitioners discovered that several vital accounting books and records from 1981-1984 were missing. Attributing the loss to Garzota, petitioner Enrique Razon, Jr. issued a memorandum on March 19, 1986, terminating Garzota’s services on the ground of loss of trust and confidence. Garzota subsequently filed a complaint for illegal dismissal and unpaid retirement benefits.
ISSUE
The primary issues were: (1) whether petitioners validly denied Garzota’s claim for retirement benefits based on alleged loss of trust and confidence, and (2) whether petitioner Enrique Razon, Jr. could be held solidarily liable with the corporation for the payment of said benefits.
RULING
The Supreme Court affirmed the NLRC’s decision ordering payment. On the first issue, the Court ruled that management’s discretion under the retirement plan to approve compulsory retirement is not absolute and cannot be exercised arbitrarily. Retirement benefits form part of the compensation package, and an employee acquires a vested right to them upon fulfilling the plan’s conditions. Garzota, having rendered 20 years of service and reached age 65, had a vested right. His dismissal, based solely on the missing books without any investigation or chance to explain, was arbitrary and violated due process. The Court noted evidence that the records were likely lost due to a fire and a flood, events reported to authorities. This arbitrary dismissal could not serve as a valid ground to deny his accrued retirement benefits. His subsequent employment with another firm did not constitute a withdrawal of his retirement request or forfeit his right.
On the second issue, the Court held Enrique Razon, Jr. solidarily liable with the corporation. Under Section 31 of the Corporation Code, a director or officer can be held jointly and severally liable for corporate acts done with bad faith. Razon’s act of summarily dismissing a long-serving employee without investigation, disregarding his right to due process, and hastily attributing fault constituted bad faith. This personal culpability justified piercing the corporate veil to impose solidary liability upon him for the monetary awards due to Garzota.