Case Summary (G.R. No. 239433)
Key Dates and Procedural History
- May 20, 2012 – Petitioner hired by Boatwin as helper; later promoted to machine operator.
- January 2014 – Boatwin changes trade name to PVC.
- March 2014 – Petitioner prevented from reporting for work by PVC.
- August 29, 2014 – Labor Arbiter issues decision finding illegal dismissal.
- November 28, 2014 – NLRC affirms Labor Arbiter.
- November 24, 2017 – Court of Appeals reverses NLRC.
- May 8, 2018 – Court of Appeals denies petitioner’s motion for reconsideration.
- September 16, 2020 – Supreme Court resolves petition for review on certiorari.
Applicable Law
- 1987 Philippine Constitution, Article XIII, Section 3 on Security of Tenure.
- Labor Code provisions on illegal dismissal and due process in employment termination.
- Rule 45, Rules of Court (petition for review on certiorari).
Antecedents
Petitioner alleged continuous employment from Boatwin to PVC without interruption or separation pay, and that PVC effectively absorbed Boatwin’s business and workforce. PVC denied any employer–employee relationship with petitioner, contending it was a newly constituted and separate entity following an assets sale of Boatwin’s business.
Labor Arbiter’s Findings
- Recognized unbroken continuity of petitioner’s service despite the corporate name change.
- Held PVC guilty of constructive and illegal dismissal for barring petitioner’s return to work without just cause or due process.
- Awarded backwages, separation pay, wage differentials, unpaid 13th-month pay, and attorney’s fees.
NLRC Ruling
Affirmed the Labor Arbiter, finding substantial evidence that PVC succeeded to Boatwin’s business and obligations, and that petitioner was illegally dismissed without notice or hearing.
Court of Appeals Ruling
Reversed NLRC on the ground that PVC proved its status as a good-faith buyer in an assets sale and that no employer–employee relationship was established. Held that a buyer in an assets sale was not obliged to absorb seller’s workforce or assume related liabilities.
Issue on Review
Whether petitioner was an employee of PVC Master Manufacturing Corporation and thus entitled to protection against illegal dismissal under the Constitution and labor laws.
Supreme Court Ruling
- Assets Sale Defense Unsubstantiated
– No deed of sale, no notice to employees, no separation pay by Boatwin, and no proof of distinct corporate existence or plantilla for PVC. - Name Change Doctrine
– Citing Zuellig Freight v. NLRC, P.C. Javier & Sons v. CA, and Phil. First Ins. v. Hartigan, the Court reaffirmed that a mere corporate name change does not create a new entity or extinguish liabilities. - Constitutional and Statutory Protections
– Emphasized the 1987 Constitution’s mandate
Case Syllabus (G.R. No. 239433)
Facts of the Case
- On May 20, 2012, Rodel F. Bantogon was hired by Boatwin International Corporation as a helper and was later promoted to machine operator within a year.
- In January 2014, Boatwin International Corporation changed its trade name to PVC Master Manufacturing Corporation (PVC).
- In March 2014, Bantogon was prevented from reporting for work after PVC discovered his participation in his brother’s pending illegal dismissal case against the same company.
- Bantogon alleged that PVC’s refusal to assign him work constituted constructive termination and that the company violated due process in effecting his dismissal.
PVC’s Defense
- PVC Master Mfg. Corp. asserted it commenced operations only on February 14, 2014, as a wholly distinct corporate entity separate from Boatwin.
- The company denied employing Bantogon and contended that its incorporation documents, permits, and SEC registrations were res ipsa loquitur evidence negating any employer-employee relationship.
- PVC maintained that, as a buyer in good faith in an alleged assets sale, it was not obliged to absorb Boatwin’s employees or assume its liabilities.
Labor Arbiter’s Ruling
- Decision dated August 29, 2014, found PVC guilty of illegal dismissal.
- Held that PVC merely succeeded to Boatwin’s business and continued Bantogon’s employment under identical conditions, without a valid interruption or payment of separation pay by Boatwin.
- Ordered PVC to pay Bantogon backwages (up to the date of finality), separation