G.R. No. L-74489 August 3, 1988
SHIN I INDUSTRIAL (PHIL.), petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION AND DANILO MARTINEZ, BIENVENIDO GAN, EDEN MARTINEZ, RUBY MANALIGOD AND JOEY LICUDINE, respondents.

FACTS

Private respondents were employees of Kwong Wah Metal (Philippines), Inc. They did not participate in a strike that paralyzed the company’s operations in May 1984. In August 1984, Kwong Wah entered into a lease-purchase agreement with petitioner Shin I Industrial (Phil.), which took over the factory operations starting September 1984. As part of a compromise in a related labor case, and because they were non-strikers, private respondents applied and were accepted for work by Shin I, beginning employment on September 29, 1984.
After receiving their first month’s salaries, private respondents inquired about a wage increase. Petitioner rejected their demand and subsequently dismissed them verbally without prior notice. Private respondents then filed a complaint for illegal dismissal against both Shin I and Kwong Wah. The Labor Arbiter ruled in favor of the employees, awarding backwages and damages. The NLRC affirmed the finding of illegal dismissal but deleted the awards for moral and exemplary damages. Shin I filed this petition, arguing it should not be held liable as a separate corporate entity from Kwong Wah.

ISSUE

Whether petitioner Shin I Industrial (Phil.) can be held liable for the illegal dismissal of private respondents.

RULING

Yes, the petitioner is liable. The Supreme Court affirmed the NLRC decision with modification. The Court upheld the NLRC’s factual finding, supported by substantial evidence, that Shin I illegally dismissed the employees by verbally terminating them without prior notice after they inquired about wages. The legal logic centers on two key points. First, the issue of whether Shin I and Kwong Wah shared common ownership is immaterial to petitioner’s direct liability. Since Shin I, as the new operator, expressly re-employed the private respondents and was the entity that subsequently dismissed them, it incurred direct responsibility for the legality of that dismissal. Petitioner’s separate corporate personality does not shield it from the consequences of its own unlawful act.
Second, the Court rejected petitioner’s claim that the employees abandoned their work. Abandonment requires a clear intention to sever the employment relationship, coupled by overt acts. The circumstances negate this: private respondents were non-strikers who sought re-employment, worked for the petitioner, and promptly filed an illegal dismissal case after their termination. Their actions demonstrate a desire to work, not to abandon their posts. Therefore, the finding of illegal dismissal stands. The Court modified the NLRC award only by deleting the grant of actual damages for lack of basis, but otherwise affirmed the award for backwages and allowances.