G.R. No. L-69494. May 29, 1987.
A.C. RANSOM LABOR UNION-CCLU, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FIRST DIVISION, A.C. RANSOM (PHILS.) CORPORATION, RUBEN HERNANDEZ, MAXIMO C. HERNANDEZ, SR., PORFIRIO R. VALENCIA, LAURA H. CORNEJO, FRANCISCO HERNANDEZ, CELESTINO C. HERNANDEZ and MA. ROSARIO HERNANDEZ, respondents.

FACTS

In a 1972 Court of Industrial Relations (CIR) Decision, affirmed by the Supreme Court in 1973, A.C. Ransom Corporation was found guilty of unfair labor practice and ordered to reinstate 22 employees with backwages. Despite successive writs of execution, the award remained unsatisfied. Ransom claimed financial difficulties and was granted clearance to cease operations in 1973. The petitioner Union discovered that the officers and principal stockholders of Ransom, the Hernandez family, had organized Rosario Industrial Corporation (ROSARIO) in 1969. ROSARIO engaged in the same business, used the same assets, address, and personnel as Ransom, effectively continuing its operations.
In 1980, a Labor Arbiter issued an order holding Ransom’s corporate officers personally liable for the backwages, deeming them included as parties-respondents in their official capacity pursuant to the 1972 CIR decision which ordered “said corporation, its officers and agents” to cease and desist. The NLRC, on appeal, reversed this, holding that the officers could not be held personally liable in the absence of evidence that they exceeded their authority, and as they were not originally impleaded as individual parties.

ISSUE

Whether the corporate officers of A.C. Ransom can be held personally and jointly liable for the unpaid backwages awarded to the employees.

RULING

Yes. The Supreme Court granted the petition and reinstated the Labor Arbiter’s order with modifications. The Court applied the doctrine of piercing the corporate veil, finding that ROSARIO was a mere alter ego of Ransom, established to evade the latter’s legal obligations. The two corporations had identical business, assets, address, and ownership (the Hernandez family). This constituted a fraudulent scheme to escape liability for the backwages.
The Court ruled that the 1972 CIR decision, which ordered “the corporation, its officers and agents” to cease and desist from unfair labor practices, inherently included liability for the monetary award. Labor laws define “employer” to include persons acting in the interest of an employer. Consequently, corporate officers who are themselves the corporation, or who use the corporate fiction to defeat labor claims, can be held personally accountable. The officers were not new parties but were already deemed included as agents of the employer-corporation from the original judgment. Therefore, they could be held jointly and severally liable for the award. The Court further held ROSARIO solidarily liable with the surviving officers and ordered the reinstatement of the employees or, alternatively, the payment of separation pay.