G.R. No. 85416 - Del Rosario vs. National Labor Relations Commission

The case originated in POEA Case No. 85-06-0394 where the Philippine Overseas Employment Administration (POEA) issued a decision on February 4, 1986 dismissing the money claim complaint for lack of merit.
The complaint was later appealed to the National Labor Relations Commission (NLRC), which on April 30, 1987, reversed the POEA decision.
The NLRC ordered that both Philsa Construction and Trading Co., Inc. (the recruiter) and Arieb Enterprises (the foreign employer) be held jointly and severally liable to pay the private respondent salary differentials and vacation leave benefits totaling the peso equivalent of $16,039.00 and $2,420.03 respectively.

Philsa Construction & Trading Co., Inc., represented by Mr. Francisco V. del Rosario as President and General Manager, was formerly a registered construction contractor.
According to a certification by the POEA’s Licensing Division, Philsa’s authority was originally issued on July 21, 1978 but its license lapsed with expiration effective October 12, 1985 and it was subsequently delisted for inactivity on August 15, 1986.
A separate entity, Philsa International Placement & Services Corp., composed of substantially the same incorporators and also headed by Mr. del Rosario, was registered as a licensed private employment agency as early as November 5, 1981.
The setup of these two corporate entities was later scrutinized in relation to the alleged intent to evade payment of the worker’s claims.

The NLRC’s judgment was based, in part, on the POEA’s findings and on the precedent set by the Court in A.C. Ransom Labor Union-CCLU v. NLRC, with a conclusion that the corporate veil could be disregarded when used to defeat public convenience or to justify wrong.
Despite the judgment awarding money to the private respondent and subsequent issuance of a writ of execution by the POEA, the execution was unsatisfied due to the financial incapacity and cessation of operations of Philsa.
A motion for an alias writ was then made against the properties of Mr. del Rosario, which was upheld by the NLRC, leading to petitioner’s appeal alleging grave abuse of discretion by the NLRC.
The Supreme Court’s intervention came via a petition filed on October 28, 1988, and a temporary restraining order was issued on November 10, 1988, enjoining further enforcement of the NLRC’s decision and associated resolution.

The POEA certificates clarified the relative licensing status and history of Philsa Construction and Trading Co., Inc. and Philsa International Placement & Services Corp.
Though the NLRC relied on these findings to conclude that the expiration of the license and the subsequent delisting were tactics to avoid liability, the actual timeline of events showed that there was no judgment or adjudication against Philsa at the time of its license lapse and delisting.
The creation of the second corporation, although sharing common incorporators with Philsa, was shown to have been established well before the filing of the complaint, thereby negating any prima facie evidence of fraud or intent to evade.

Relying on the POEA’s findings regarding the expiration and delisting of Philsa to pierce the corporate veil.
Ordering the issuance of an alias writ of execution against Mr. Francisco V. del Rosario based on the argument that the corporate personality of Philsa should be disregarded.

Whether the establishment and operational differences between Philsa Construction & Trading Co., Inc. and Philsa International Placement & Services Corp. were sufficient to sustain the imputation of fraudulent intent or evasion of liability.

Whether the procedure followed in enforcing the money judgment, particularly the execution against individual properties and bonds, was in accordance with the POEA Rules and Regulations.