G.R. No. L-57767. January 31, 1984.
ALBERTO S. SUNIO and ILOCOS COMMERCIAL CORPORATION, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION, NEMESIO VALENTON, SANTOS DEL ROSARIO, VICENTE TAPUCOL, ANDRES SOLIS, CRESCENCIO SOLLER, CECILIO LABUNI, SOTERO L. TUMANG, in his capacity as Asst. Regional Director for Arbitration, Regional Office No. 1, Ministry of Labor & Employment, and AMBROSIO B. SISON, in his capacity as Acting Regional Sheriff, Regional Office No. 1, Ministry of Labor & Employment, respondents.

FACTS

The case originated from a series of sales and foreclosures of an ice plant. Private respondents were originally employees of EM Ramos & Company, Inc. (EMRACO) and Cabugao Ice Plant, Inc. (CIPI). In 1973, these companies sold the plant to Rizal Development and Finance Corporation (RDFC), terminating all employees, including private respondents, with separation pay. RDFC hired its own staff. Later in 1973, RDFC sold the plant to petitioner Ilocos Commercial Corporation (ICC), which also hired its own employees. Due to non-payment, EMRACO-CIPI foreclosed on the property in 1974, bought it at auction, and subsequently sold it to Nilo Villanueva, who then re-hired private respondents. In 1975, RDFC exercised its right of redemption, but Villanueva refused to vacate. After protracted litigation, petitioners (RDFC/ICC) finally obtained possession via a court-issued Writ of Preliminary Mandatory Injunction on February 1, 1978. Upon taking over, petitioners did not re-employ private respondents.
Private respondents filed a complaint for illegal dismissal. The Assistant Regional Director and, on appeal, the NLRC, ordered petitioners and CIPI to reinstate the workers and pay backwages from February 1, 1978. The NLRC ruled that the workers’ security of tenure, originating from their 1967 employment, remained vested and continued even after their re-hiring by Villanueva.

ISSUE

Did the NLRC act with grave abuse of discretion in ordering the reinstatement of private respondents and holding petitioners, including Alberto Sunio personally, liable for backwages?

RULING

Yes. The Supreme Court granted the petition and set aside the NLRC’s orders. The Court held there was no employer-employee relationship between petitioners and private respondents to support a claim for illegal dismissal. Private respondents were lawfully terminated by their original employer, EMRACO-CIPI, in 1973 with separation pay. Their subsequent employment was with Nilo Villanueva, a distinct entity. When petitioners recovered the plant through a judicial order directing Villanueva to vacate, they were merely enforcing a property right, not succeeding to Villanueva’s business as a going concern. The injunction order was against Villanueva and his agents, which included the workers. Thus, petitioners had no obligation to absorb Villanueva’s employees. The claim of continuous tenure from 1967 was erroneous, as the legal employer-employee relationship with the original company ended in 1973.
Furthermore, the Court held petitioner Alberto Sunio should not have been held personally and solidarily liable. He was sued in his capacity as General Manager of ICC. There was no evidence he acted maliciously or in bad faith; his actions were corporate acts. The separate juridical personality of the corporation shields its officers from personal liability for corporate obligations absent evidence of bad faith. The levied properties were ordered returned to petitioners.