Case Digest (G.R. No. 184517)
Facts:
SME Bank Inc. v. Peregrin T. De Guzman, G.R. Nos. 184517 and 186641, October 8, 2013, the Supreme Court En Banc, Sereno, C.J., writing for the Court.Petitioners were SME Bank, Inc., Abelardo P. Samson, Olga Samson and Aurelio Villaflor, Jr.; respondents included the former shareholder-directors Peregrin T. De Guzman and Eduardo M. Agustin, Jr., and bank employees Elicerio Gaspar, Ricardo Gaspar, Jr., Eufemia Rosete, Fidel Espiritu, Simeon Espiritu, Jr., and Liberato Mangoba.
In June 2001 SME Bank encountered financial difficulties and negotiations followed for the sale of a controlling block of shares to Abelardo Samson. Samson’s attorney-in-fact transmitted Letter Agreements to Agustin and De Guzman conditioning the sale on, among other things, the “termination/retire[ment]” of certain employees and a “peaceful transition of management,” while guaranteeing that rank-and-file retirement benefits would be honored. Agustin and De Guzman signed the conforme portion of the Letter Agreements and on 11 September 2001 sold 86.365% of SME Bank’s shares to spouses Samson; Aurelio Villaflor, Jr. was appointed bank president.
Prior to the share transfer, SME Bank’s then–general manager, Simeon Espiritu, induced several employees to tender resignation letters (dated 27 August 2001) or, in Eufemia Rosete’s case, a retirement letter, allegedly promising rehiring upon reapplication by the new management. The resignation/retirement letters and subsequent job applications were transmitted to the Samson representative; most of the employees were not rehired (Simeon, Jr. was rehired but resigned again a month later). The employees demanded separation pay and other benefits, which were denied.
The employees filed complaints before the Labor Arbiter for illegal dismissal, unfair labor practice and related claims against SME Bank, Agustin, De Guzman and the Samson Group. The Labor Arbiter (27 October 2004) found the employees involuntarily executed their resignation/retirement letters and ruled against Agustin and De Guzman, awarding separation pay, but dismissed claims against the Samson Group. On appeal the National Labor Relations Commission (NLRC) (8 May 2006) modified the Labor Arbiter’s decision, finding the employees illegally dismissed and holding Agustin, De Guzman and the Samson Group jointly and severally liable for separation pay, backwages, moral and exemplary damages, and attorney’s fees. Motions for reconsideration were denied.
Agustin and De Guzman filed Rule 65 petitions with the Court of Appeals (CA) (CA-G.R. SP No. 97510); the Samson Group f...(Subscriber-Only)
Issues:
- Were the respondent employees illegally dismissed in violation of their right to security of tenure?
- Which parties are liable for the employees’ claims—SME Bank, Agustin and De Guzman, the Samson Group (Abelardo and Olga Samson, Aurelio Villaflor, Jr.)—and on what basis?
- What remedies and damages are the employees entitled to, and is any prior doctrine on stock sales (Manl...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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