Case Digest (G.R. No. 147590)
Facts:
Antonio C. Carag v. National Labor Relations Commission, Isabel G. Panganiban‑Ortiguerra, as Executive Labor Arbiter, NAFLU, and Mariveles Apparel Corporation Labor Union, G.R. No. 147590, April 02, 2007, Supreme Court En Banc, Carpio, J., writing for the Court.Complainants National Federation of Labor Unions (NAFLU) and Mariveles Apparel Corporation Labor Union (MACLU) filed on 12 August 1993 a complaint for illegal dismissal and illegal closure against Mariveles Apparel Corporation (MAC), alleging that MAC ceased operations on July 8, 1993 without the one‑month notice required by the Labor Code, leaving unpaid wages and benefits under an existing Collective Bargaining Agreement (CBA) and thereby prejudicing rank‑and‑file employees; they prayed for reinstatement or, if not feasible, separation pay and other reliefs.
In a position paper dated 3 January 1994, complainants moved to implead Antonio C. Carag (Chairman of the Board) and Armando David (President) as additional respondents to secure satisfaction of any money judgment, invoking Article 212(e) of the Labor Code and authorities such as A.C. Ransom Labor Union‑CCLU v. NLRC. MAC, through counsel Atty. Joshua Pastores, opposed the impleader, asserting that MAC was owned by a consortium of banks and that Carag and David held only qualifying shares as professional managers.
Labor Arbiter Isabel Panganiban‑Ortiguerra, after a conference in which respondents did not appear, declared the case submitted for resolution and, in a Decision dated 17 June 1994, granted the motion to implead and declared MAC, Carag and David jointly and severally liable for separation pay (computed at P49,101,621.00) and awarded attorney’s fees equal to 10% of the judgment; claims for moral and exemplary damages were dismissed for lack of evidence. The Arbiter’s record indicates Carag was not summoned, was not required to file a position paper at that time, and was not afforded a hearing on the issue of personal liability.
The NLRC Third Division, in a Resolution dated 5 January 1995, denied respondents’ motions to reduce bond and directed posting of cash or surety bond in the amount of P48,101,621.00 within 15 days. MAC obtained a temporary restraining order from this Court to enjoin enforcement of the Arbiter’s Decision; respondents separately filed petitions for certiorari under Rule 65 (later consolidated).
On 29 February 2000 the Court of Appeals (appellate court) affirmed the Labor Arbiter and the NLRC, holding that absence of a formal hearing did not amount to grave abuse of discretion, that Carag and David as the highest officers had a direct hand in the illegal dismissal and closure and showed malice and bad faith in failing to observe notice requirements, and that the bond should not be reduced; the appellate court lifted this Court’s TRO and imposed costs on petitioners.
Petitioner Carag sought relief at this Court. After procedural history including...(Pro-only)
Issues:
- Was petitioner Antonio C. Carag denied due process when the Labor Arbiter impleaded him and held him personally liable without issuing summons, without ordering a position paper or hearing, and without affording opportunity to present evidence in violation of Rule V of the NLRC Rules of Procedure?
- Assuming due process, is the holding that Carag is personally and solidarily liable with MAC for separation pay supported by evidence and consistent with the governing law on personal liability of corporate officers?
- Did the NLRC commit grave abuse of discretion in...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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