G.R. No. 157900 - Zuellig Freight and Cargo Systems vs. National Labor Relations Commission

Case Summary (G.R. No. 157900)

Petitioner and Respondent

• Petitioner contends that its predecessor (Zeta) validly ceased operations in early 1994, offered re-employment, and lawfully terminated San Miguel after he failed to accept timely.
• San Miguel asserts continuous employment since December 16, 1985, illegal separation without valid cause or due process, and lack of genuine cessation of business.

Key Dates

• December 16, 1985: San Miguel hired by Zeta as checker/customs representative
• January 21, 1994: Zeta files amended articles of incorporation to become Zuellig Freight and Cargo Systems
• February 28, 1994: Zeta notifies San Miguel of termination effective March 31, 1994
• April 1–15, 1994: San Miguel temporarily employed by petitioner
• November 15, 1999: Labor Arbiter decision
• April 4 & June 15, 2001: NLRC resolutions
• November 6, 2002: Court of Appeals decision
• July 22, 2013: Supreme Court decision

Antecedents

San Miguel filed before the Labor Arbiter claiming illegal dismissal, unfair labor practice, non-payment of salaries, and moral damages against Zeta (later Zuellig). He alleged Zeta’s purported cessation of operations was a mere façade; he accepted separation pay subject to re-employment by the renamed corporation but was summarily dismissed on April 15, 1994 without cause or due process. Zuellig maintained valid business closure, timely offer expiration, and valid hiring of other personnel.

Labor Arbiter’s Ruling

The Arbiter held that the amendment of Zeta’s articles did not dissolve the corporate entity but merely changed its name and functions. Genuine closure was not established; Zeta and Zuellig remained the same “legal person.” Consequently, San Miguel’s termination under the pretext of business cessation was illegal. Back wages (April 1, 1994–November 15, 1999) and attorney’s fees (10% of the award) were granted; other claims were dismissed.

NLRC’s Resolution

The NLRC affirmed the Arbiter’s findings and award, rejecting petitioner’s arguments on bona fide cessation, offer expiration, and managerial prerogative. A motion for reconsideration was likewise denied.

Court of Appeals’ Decision

The CA dismissed the certiorari petition, ruling that:

Registration of amended articles and by-laws did not satisfy Article 283’s bona fide closure requirement;
No valid cessation of operations was proven;
The employment relationship endured under the same corporate entity;
San Miguel was not estopped by receipt of separation benefits;
Attorney’s fees were proper under Civil Code Article 2208 and Labor Code Article 111, given petitioner’s bad faith and compulsion to litigate.

Issues on Review

Whether the NLRC gravely abused its discretion in finding no bona fide cessation of business and thus illegal dismissal.
Whether attorney’s fees were improperly awarded.

Supreme Court Ruling

The petition for certiorari was denied. The SC held that:

Grave abuse of discretion was not shown; NLRC, Labor Arbiter,