Title
Bantogon vs. PVC Master Manufacturing Corporation
Case
G.R. No. 239433
Decision Date
Sep 16, 2020
Worker claimed illegal dismissal after employer changed name; courts ruled employer liable for constructive dismissal due to continuity of corporate identity and failure to prove just cause.
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Case Digest (G.R. No. 239433)

Facts:

Employment Background

  • Petitioner Rodel F. Bantogon was employed by Boatwin International Corporation as a helper on May 20, 2012. Within a year, he was promoted to machine operator.
  • In January 2014, Boatwin changed its trade name to PVC Master Mfg. Corp. (PVC).

Alleged Dismissal

  • In March 2014, petitioner was prevented from reporting for work allegedly due to his involvement in his brother’s illegal dismissal case against PVC.
  • Petitioner claimed that PVC refused to assign him further work, which he equated to constructive dismissal. He argued that PVC failed to observe due process in terminating his employment.

PVC’s Defense

  • PVC countered that it commenced operations on February 14, 2014, and was a separate and distinct entity from Boatwin. It denied that petitioner was ever its employee.
  • PVC submitted documents such as its Mayor’s Permit, SEC Registration, Articles of Incorporation, and By-Laws to prove its separate identity from Boatwin.

Labor Arbiter’s Ruling

  • The Labor Arbiter ruled in favor of petitioner, finding that PVC was merely a continuation of Boatwin and had absorbed its employees, including petitioner. The Arbiter held that petitioner was illegally dismissed and awarded backwages, separation pay, wage differentials, unpaid 13th month pay, and attorney’s fees.

NLRC’s Ruling

  • The NLRC affirmed the Labor Arbiter’s decision, stating that petitioner worked under the same conditions from Boatwin to PVC and was illegally dismissed without just or authorized cause.

Court of Appeals’ Ruling

  • The Court of Appeals reversed the NLRC’s decision, holding that petitioner failed to prove an employer-employee relationship with PVC. It ruled that PVC, as a buyer of Boatwin’s assets, was not obligated to absorb Boatwin’s employees.

Issue:

  1. Whether the Court of Appeals committed reversible error in ruling that petitioner was not an employee of PVC.
  2. Whether PVC is liable for the illegal dismissal of petitioner.

Ruling:

The Supreme Court granted the petition and reversed the Court of Appeals’ decision. It held that:

  • PVC was not a separate entity from Boatwin but merely a continuation of the latter under a new name.
  • There was no sufficient evidence to prove an assets sale between Boatwin and PVC.
  • Petitioner was constructively dismissed without just or authorized cause, and PVC failed to observe due process in terminating his employment.
  • PVC is liable for illegal dismissal and must reinstate petitioner with full backwages and other monetary awards.

Ratio:

  1. Continuity of Corporate Identity: A mere change in corporate name does not create a new entity. PVC, as the successor of Boatwin, remained liable for the latter’s obligations, including labor-related claims.
  2. Burden of Proof in Dismissal Cases: The employer bears the burden of proving that a dismissal was for a just or authorized cause and that due process was observed. PVC failed to meet this burden.
  3. Protection of Labor Rights: The State is constitutionally bound to protect labor rights. Courts must ensure that employers do not circumvent labor laws to the detriment of workers.
  4. Constructive Dismissal: Preventing an employee from reporting for work without just cause constitutes constructive dismissal, which is illegal.


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