G.R. No. 83023 . March 23, 1990
ELADIO A. GUDEZ, ET AL., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, RETIRED ARMY PROTECTIVE AND SECURITY AGENCY (RAPSA) INC., AND MRS. HERMINIA A. CRISOLOGO, respondents.

FACTS

Petitioners were employees of respondent Retired Army Protective and Security Agency Inc. (RAPSA), a security service corporation with respondent Herminia A. Crisologo as its president and treasurer. Upon order of the Philippine Constabulary, RAPSA ceased operations on August 15, 1986, terminating petitioners’ employment. Petitioners filed complaints for separation pay and other monetary claims against RAPSA and Crisologo before the Labor Arbiter. On September 25, 1987, the Labor Arbiter rendered a decision holding both RAPSA and Crisologo jointly and severally liable for the awarded claims.
Respondent RAPSA, through its counsel Jose T. Collado, filed a memorandum of appeal with the National Labor Relations Commission (NLRC). The typewritten memorandum named only RAPSA as appellant, but Crisologo’s name was later inserted by hand. The NLRC, in its resolution dated March 10, 1988, modified the Labor Arbiter’s decision. It ruled that the handwritten intercalation was a mere oversight and, applying the doctrine of separate corporate personality, absolved Crisologo from personal liability, making RAPSA solely responsible.

ISSUE

The issues are: (1) whether an appeal was validly made by respondent Crisologo from the Labor Arbiter’s decision; and (2) whether respondent Crisologo may be held solidarity liable with RAPSA for the petitioners’ monetary claims.

RULING

The Supreme Court granted the petition, reversed the NLRC resolution, and reinstated the Labor Arbiter’s decision.
On the first issue, the Court held that no valid appeal was filed by Crisologo. While quasi-judicial bodies like the NLRC are not strictly bound by technical rules, the fundamental procedure for substitution of counsel must be observed. The record showed Crisologo was represented by a different lawyer before the Labor Arbiter. Counsel for RAPSA had no authority to represent Crisologo on appeal without complying with the required procedure for substitution, which includes a written application and the client’s written consent. The mere handwritten insertion of her name in the memorandum of appeal, without more, did not constitute a valid appeal on her behalf.
On the second issue, the Court ruled that Crisologo could be held solidarity liable. Under Article 212(c) of the Labor Code, an “employer” includes any person acting in the interest of an employer. As the president and treasurer of RAPSA, Crisologo was the person acting in the corporation’s interest. The corporate veil could be pierced to prevent injustice, especially where the corporation had ceased operations, filed for voluntary insolvency on the very day the Labor Arbiter decided, and was likely unable to satisfy the judgment. To allow the separate corporate personality to shield Crisologo would render the decision in favor of the employees nugatory. Therefore, Crisologo was correctly held jointly and severally liable with the corporation for the petitioners’ rightful claims.