GR 81450; (February, 1990) (Digest)
G.R. No. 81450 February 15, 1990
JOHNSON G. CHUA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION (Third Division) and JESUS G. CHUA, respondents.
FACTS
City Air International Brokerage Corporation is a family corporation. Private respondent Jesus Chua served as its president from October 1984 until his resignation in March 1985. Petitioner Johnson Chua, his brother, was the corporation’s vice-president. On May 13, 1985, Jesus filed a complaint with the NLRC for illegal dismissal and recovery of unpaid wages from November 15, 1984, to March 31, 1985, amounting to P29,250.00. The Labor Arbiter ruled in favor of Jesus, ordering “City Air International Corporation and/or Mr. Johnson Chua” to pay the unpaid wages. The NLRC affirmed this decision, prompting Johnson to elevate the case to the Supreme Court.
Johnson argued that he could not be held personally liable for the corporate obligation of unpaid wages, invoking the doctrine of separate corporate personality. He contended that only the corporation itself should be liable. The records, however, established that Jesus was entitled to his salary, as confirmed by the corporation’s accountant and an independent audit. The dispute centered on whether a corporate officer, specifically the vice-president, could be held jointly and severally liable.
ISSUE
Can a corporate vice-president be held jointly and severally liable with the corporation for the unpaid wages of a former president-employee?
RULING
Yes. The Supreme Court dismissed the petition and affirmed the NLRC decision, holding petitioner Johnson Chua personally liable. The Court applied the precedent set in A.C. Ransom Labor Union-CCLU v. NLRC, which held that a responsible corporate officer can be deemed the “employer” under the Labor Code and held personally liable for corporate obligations to workers. The general rule of separate corporate personality yields when a corporate officer acts in the interest of the employer.
The Court found Johnson to be the responsible officer. After Jesus’s resignation, Johnson was the highest-ranking official. He personally caused the preparation and verification of the corporation’s position papers, appeal memoranda, and motions for reconsideration in the labor case, demonstrating direct personal interest and involvement. Notably, a new corporate president had been elected but did not handle the case; Johnson took active control. This, coupled with evidence of personal animosity between the brothers, led the Court to conclude Johnson had a hand in the dismissal and failure to pay wages. As the officer directly responsible, he was liable under Article 289 of the Labor Code, which imposes penalties on guilty officers when an offense is committed by an entity. The NLRC’s findings, being supported by substantial evidence, were upheld.