Facts:
Commart (Phils.), Inc. and its corporate officer
Jesus T. Maglutac faced two consolidated petitions for certiorari arising from an illegal dismissal case decided by the
National Labor Relations Commission (NLRC) on April 30, 1987 (NLRC Case No. NCR-11-3887-84).
Jose M. Maglutac (the complainant in G.R. No. 78345) was employed by
Commart in February 1980 and rose to become Manager of its Energy Equipment Sales. On October 3, 1984, he received a notice of termination signed by
Joaquin S. Cenzon, Vice-President–General Manager and Corporate Secretary of
CMS International, a corporation controlled by
Commart; the notice stated that the Board of Directors, acting on a unanimous resolution, decided that his continued employment would not be in the best interest of the corporation, and it made his discharge effective immediately. The notice also stated that the termination was without prejudice to any future private or legal action for restitution, collection, or repayment of financial obligations. Thereafter,
Jose M. Maglutac filed a complaint for illegal dismissal against
Commart and
Jesus T. Maglutac, alleging that the dismissal was motivated by vendetta against his parents, who had exposed allegedly fraudulent diversion of company funds to the president’s private accounts, and he stressed that his performance had not been questioned.
Commart and
Jesus T. Maglutac defended the termination on the ground of lack of trust and confidence, claiming that the complainant’s family had established
MM International in direct competition with
Commart. The Labor Arbiter
Jose Collado, Jr., by decision dated January 11, 1986, found that the complainant was illegally dismissed and ordered
reinstatement, full backwages,
moral damages of P200,000.00,
exemplary damages of P20,000.00, and
attorney’s fees of ten percent (10%). On appeal treated as a reconsideration, the NLRC affirmed the finding of illegal dismissal but modified the Labor Arbiter’s ruling by deleting moral and exemplary damages and absolving
Jesus T. Maglutac from personal liability; it reasoned that the corporate officer was only a nominal party and that corporate acts are distinct from stockholders’ and officers’ personal responsibility. Both sides filed motions for reconsideration, which were denied in May and June 1987.
Complainant sought review contending that the NLRC gravely abused its discretion in deleting damages and denying solidary liability of
Jesus T. Maglutac, while
Commart and
Jesus T. Maglutac sought review arguing that reinstatement and backwages were improper due to the complainant’s inimical act and that the Labor Arbiter’s decision allegedly violated due process because it was rendered on the basis of the complainant’s reply-position paper without serving a copy. It was later manifested that
Commart had become insolvent and had suspended operations since January 1986.
Issues:
Whether the NLRC gravely abused its discretion in deleting the awards of
moral and exemplary damages and in absolving
Jesus T. Maglutac from
joint and several liability, and whether the illegal dismissal finding and the Labor Arbiter’s process violated
due process.
Ruling:
Ratio:
Doctrine: