Case Summary (G.R. No. 69494)

Background of the Case

• The Court of Industrial Relations (CIR) found A.C. Ransom Philippine Corporation guilty of unfair labor practices, including interference and discrimination against its employees.
• The CIR ordered the corporation to cease such practices, declared a strike by employees as legal, and mandated the immediate reinstatement of 22 employees with backwages from July 25, 1969.
• The total backwages were initially computed at P199,276.00, which was later reduced to P164,984.00 after considering the employees' earnings during their suspension.

Financial Difficulties and Corporate Actions

• RANSOM applied for clearance to cease operations due to financial difficulties, which was granted effective May 1, 1973, without prejudice to employees' rights to seek redress.
• The UNION alleged that RANSOM's officers formed a new corporation, Rosario Industrial Corporation (ROSARIO), using the same resources and personnel, despite claiming financial hardship.

Legal Proceedings and Execution Motions

• The UNION filed multiple motions for execution against RANSOM, asserting that the officers were hiding assets.
• RANSOM contended that the CIR decision could not be enforced after five years had lapsed.
• Labor Arbiter Tito F. Genilo issued an order holding RANSOM's officers liable for the backwages, despite some officers having passed away.

NLRC's Modification of Liability

• The National Labor Relations Commission (NLRC) modified the Labor Arbiter's order, relieving the officers of personal liability, citing the absence of evidence of exceeding authority.
• The UNION sought reconsideration, leading to a special civil action of certiorari before the Supreme Court.

Supreme Court's Decision

• The Supreme Court reinstated the Labor Arbiter's order, limiting personal liability for backwages to Ruben Hernandez, the President of RANSOM in 1974, and subsequent Presidents until the corporation's termination.
• The Court emphasized that the officers and agents of RANSOM should be held jointly and severally liable for the backwages due to the employees.

Piercing the Corporate Veil

• The Court recognized the need to pierce the corporate veil due to the close familial ties among the officers of RANSOM and ROSARIO, which were essentially operating as one entity to evade financial obligations.
• The ruling highlighted that the corporate structure should not be used to perpetrate injustice or evade responsibilities to employees.

Workers' Rights and Bankruptcy Considerations

• The Court reaffirmed that workers have a preferential claim to unpaid wages in cases of bankruptcy or liquidation, as stipulated in Article ...continue reading

Case Syllabus (G.R. No. 69494)

Case Overview

• The case revolves around a labor dispute involving A.C. Ransom Labor Union-CCLU as the petitioner against the National Labor Relations Commission and several private respondents, including A.C. Ransom (Phils.) Corporation and its officers.
• The case originated from a decision by the Court of Industrial Relations (CIR) on August 19, 1972, which found A.C. Ransom (Phils.) Corporation guilty of committing unfair labor practices.

Findings of the Court of Industrial Relations

• The CIR's decision mandated A.C. Ransom (Phils.) Corporation to cease and desist from its unfair labor practices, reinstating 22 employees with back wages from July 25, 1969, until actual reinstatement.
• The total back wages were initially computed at P199,276.00, later reduced to P164,984.00 after deductions were considered.

Corporate Actions and Financial Distress

• A.C. Ransom filed for clearance to cease operations effective May 1, 1973, citing financial difficulties stemming from obligations incurred prior to 1966.
• Despite declaring bankruptcy, A.C. Ransom's officers established a new corporation, Rosario Industrial Corporation, which operated in the same business sector and location as RANSOM.

Subsequent Legal Actions and Motions for Execution

• The UNION filed multiple motions for execution of the CIR's decision, which were met with resistance from RANSOM, citing its precarious financial position.
• RANSOM...continue reading