Title
Naguiat vs. National Labor Relations Commission
Case
G.R. No. 116123
Decision Date
Mar 13, 1997
Taxi drivers employed by CFTI sought higher separation pay after Clark Air Base closure. NLRC ruled US$120/year separation pay, holding CFTI and its president liable, absolving Naguiat Enterprises and vice president.

Case Summary (G.R. No. 116123)

Key Dates

  • Termination of services: November 26, 1991
  • Labor Arbiter decision: June 4, 1993
  • NLRC Resolutions: February 28 and May 31, 1994
  • Supreme Court decision: March 13, 1997

Applicable Law

  • 1987 Philippine Constitution
  • Labor Code of the Philippines (Art. 106, 107, 109, 283)
  • Corporation Code (Sec. 100, Title XII on Close Corporations)
  • Rules of Court, Rule 65 (Certiorari)

Factual Background

CFTI contracted with AAFES to operate taxis within Clark Air Base. Drivers paid daily “boundary fees” (US$26.50–27.00) and covered incidental vehicle expenses. They earned at least US$15 per day and deposited excess earnings bi-monthly. With the US military base phase-out, AAFES dissolved and driver services ended. A driver union agreement provided P500 per year of service, which most accepted. A group of drivers, disaffiliating from that union and joining NOWM, filed for separation pay based on alleged monthly earnings of US$240.

Proceedings Below

The Labor Arbiter found the drivers to be regular employees of CFTI, rejected CFTI’s force-majeure defense, and awarded P1,200 per year of service on humanitarian grounds. The NLRC modified the award to separation pay equal to half-month salary (US$120) per year or peso equivalent and held Sergio F. Naguiat Enterprises and its officers jointly and severally liable with CFTI. Petitioners filed a Rule 65 certiorari before the Supreme Court.

Issues Presented

  1. Whether the NLRC gravely abused discretion in increasing separation pay to US$120 per year of service.
  2. Whether NOWM validly represented the drivers.
  3. Whether Sergio F. Naguiat Enterprises, Inc., and its officers are jointly and severally liable for separation pay.
  4. Whether petitioners’ officers were denied due process by not being impleaded.

Ruling on Separation Pay

  • Findings of fact by quasi-judicial bodies are binding absent grave abuse of discretion.
  • Petitioners failed to contest the drivers’ earning allegations and are estopped from challenging them.
  • No satisfactory proof of serious business losses; closure resulted from Base phase-out.
  • Under Labor Code Art. 283, separation pay in closures not due to financial reverses is at least one-half month’s pay per year of service. Award of US$120 per year or peso equivalent is proper.

Authority of NOWM to Represent Drivers

  • Petitioners did not challenge NOWM’s standing before the Labor Arbiter or NLRC and are estopped from raising the issue on certiorari.
  • NOWM was already a party-litigant representing the drivers below.

Liability of Corporations and Officers

  • Sergio F. Naguiat Enterprises was not an indirect employer or labor-only contractor; CFTI was the direct and sole employer of the drivers.
  • Article 212(c) of the Labor Code and Sec. 100(5) of the Corporation Code impose personal liability on officers of close corporations actively managing the business.
  • By A.C. Ransom precedent, the president of a corporation may be held jointly liable for labor obligations.
  • Sergio F. Naguiat, as actively managing president of CFTI, is jointly and severally liable for separation pay.
  • Antolin T. Naguia

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