GR 97977; (January, 1994) (Digest)
G.R. No. 97977 January 18, 1994
LUCKY TEXTILE MILLS INCORPORATED, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION (Third Division), as Public Respondent and NESTOR J. NOLASCO, as private respondent, respondents.
FACTS
Nestor J. Nolasco was employed for seventeen years as property custodian of Eastern Textile Mills, Inc. (EASTEX). In mid-February 1983, he was ordered to stop working due to a “temporary shutdown.” EASTEX, facing financial difficulties, had its assets attached in October 1982. On September 26, 1983, EASTEX stockholders passed a resolution authorizing the formation of a new corporation as part of a rehabilitation plan. Lucky Textile Mills, Inc. (LUCKY) was incorporated on March 20, 1984. EASTEX completely ceased operations on June 30, 1984, and LUCKY began operating the former business using EASTEX’s foreclosed assets on July 1, 1984. Nolasco was not rehired by LUCKY. On November 16, 1984, Nolasco filed a complaint for illegal dismissal against both EASTEX and LUCKY. The Labor Arbiter ruled in favor of Nolasco, ordering the companies to jointly and severally pay separation pay. Both parties appealed to the NLRC. The NLRC modified the decision, finding constructive dismissal and ordering LUCKY to reinstate Nolasco with three years’ backwages or pay separation pay. LUCKY’s motion for reconsideration was denied. LUCKY filed this petition for certiorari, arguing the dispute was already settled by a prior NLRC case involving other employees (Mangaran case) which referenced a Memorandum of Understanding, and that the NLRC erred in disregarding this.
ISSUE
1. Whether the NLRC erred in disregarding the prior settlement in the Florencio Mangaran, et al. case.
2. Whether the NLRC erred in ruling that the Memorandum of Understanding was never raised in the arbitral proceedings.
RULING
The Supreme Court DISMISSED the petition and AFFIRMED the NLRC decision.
1. The Mangaran case cannot be invoked as it was never raised or presented during the arbitral proceedings or in LUCKY’s appeal. Its invocation at this stage is unavailing. Furthermore, the facts, circumstances, and issues in that case are not identical to the present case, and Nolasco was neither privy nor a signatory to the Memorandum of Understanding cited therein.
2. The Memorandum of Understanding dated July 18, 1984, existed when Nolasco filed his complaint, but LUCKY deliberately failed to present it. Under that memorandum, while LUCKY was not obliged to hire EASTEX’s rank-and-file employees, the latter were paid separation benefits as “financial assistance.” Nolasco’s prolonged “floating status” exceeding six months, without being recalled to work while LUCKY resumed operations and hired new employees, constituted illegal constructive dismissal. He was entitled to reinstatement with backwages or separation pay. The NLRC correctly pierced the corporate veil, finding LUCKY to be a mere continuation and successor of EASTEX, designed to evade obligations to employees.