Case Summary (G.R. No. 69494)
Relevant Historical Background
On June 6, 1961, employees of RANSOM went on strike due to employment disputes, which were partly driven by the union's representation. The strike resulted in the reinstatement of most workers by June 21, 1961, although 22 strikers were denied return to their positions. The conflict subsequently led to decisions in Cases Nos. 2848-ULP and 2880-ULP by the Court of Industrial Relations, ordering the reinstatement of the strikers with back wages effective from July 25, 1969.
Developments Leading to Litigation
RANSOM submitted a clearance application to cease operations on April 2, 1973, which was granted without prejudice to the employees' rights to seek legal remedies. Though operations halted, RANSOM remained a corporation. The back wages of P164,984.00 owed to the 22 strikers were computed, but RANSOM's assets were insufficient to cover those claims, indicating potential maneuvering to evade liability.
Labor Arbiter’s Ruling and NLRC Decisions
The petitioner filed several motions for execution of the New RULP order, culminating in a significant motion on December 18, 1978, for the personal liability of RANSOM's officers for the back wages. Labor Arbiter Tito F. Genilo granted this motion, issuing an order for execution against both the corporation and several individual officers. RANSOM then appealed to the NLRC, which affirmed Genilo’s order with some modifications, leading to the critical examination of liability and enforcement issues.
Key Legal Issues Addressed
The NLRC faced two main issues during RANSOM's appeal: the enforceability of a decision after five years and the individual liability of corporate officers. On the first issue, the NLRC stated that the execution proceedings remained valid, as the statute of limitations should not apply in this case, especially considering the circumstances surrounding the struggle for back wages. Regarding individual liabilities, the ruling clarified that while corporate officers are generally not personally liable for corporate acts, there exists potential personal liability if they acted beyond their authority or if enforcement involved direct responsibility for the non-payment of wages.
Application of Labor Code Provisions
Article 265 of the Labor Code affirms that workers unlawfully terminated are entitled to reinstatement with back wages, which underscores the corporation's obligations toward employees. The discussion included the nuances of corporate identity, where Article 212 (c) extends the definition of “employer” to include individuals acting on behalf of
...continue readingCase Syllabus (G.R. No. 69494)
Case Background
- Respondent A.C. Ransom (Philippines) Corporation, established in 1933 by Maximo C. Hernandez, Sr., operates as a family corporation with stockholders being members of the Hernandez family.
- RANSOM is located in Las Pinas, Rizal, primarily manufacturing ink and related products.
Strike and Reinstatement Issues
- On June 6, 1961, employees, predominantly members of the petitioner Labor Union, initiated a strike, which was lifted on June 21, 1961, allowing most strikers to return to work.
- However, 22 strikers were denied reinstatement by RANSOM.
- A subsequent corporation, Rosario Industrial Corporation, was formed by the Hernandez family in 1969, also manufacturing ink within RANSOM’s compound.
Court Decisions and Labor Arbiter Orders
- The strike led to Cases Nos. 2848-ULP and 2880-ULP in the Court of Industrial Relations, culminating in a December 19, 1972 decision mandating RANSOM to reinstate the 22 strikers with back wages retroactive to July 25, 1969.
- RANSOM's application to cease operations was granted by the Ministry of Labor and Employment on June 7, 1973, although RANSOM retained its corporate identity.
Calculation and Motion for Execution
- The back wages for the 22 strikers were computed at P164,984.00 in early 1974.
- Between 1976 and 1978, the Labor Union filed approximately ten motions for execution against RANSOM, all unsucc