AZCOR MANUFACTURING INC, FILIPINAS PASO, and/or

ARTURO ZULUAGA/Owner v. NATIONAL LABOR RELATIONS

COMISSION AND CANDIDO CAPULSO
February 11, 1999 | Padilla, J. | Termination of Employment
Digester: Bea, Alexis
SUMMARY: Candido filed with the LA a complaint for
constructive illegal dismissal. He alleged that he worked for Azcor
for more than 2 years. Then, due to asthma, he filed for a leave of
absence. Upon returning to work, he was not permitted to do so.
He later on amended his complaint and impleaded Filipinas Paso
as additional respondent. Azcor, meanwhile, contends that he
validly resigned from the company to seek employment from
Filipinas Paso where he also resigned. LA dismissed the case.
NLRC reversed. SC held that Candido was illegally dismissed and
that his letter of resignation was obviously spurious because it was
worded exactly and it was English despite of the fact that Candido
was uneducated and cannot speak English.

DOCTRINE: The doctrine that a corporation is a legal entity or a

person in law distinct from the persons composing it is merely a
legal fiction for purposes of convenience and to subserve the ends
of justice. Where, as in this case, the corporate fiction was used as
a means to perpetrate a social injustice or as a vehicle to evade
obligations or confuse legitimate issues, it would be discarded and
the 2 corporations would be merged as one.

FACTS:
Candido (Candie?) Capulso filed with the LA a complaint for
constructive illegal dismissal and illegal deduction of P50.00 a
day for the period of April to September 1989. Azcor and
Arturo (who were the respondents before the LA case and
Filipina was not a party in the case yet) moved to dismiss the
complaint on the ground that there was no ER-EE relationship
between petitioners and Capulso
o Candido became an employee of Filipinas from March 1,
1990 but voluntarily resigned a year after
LA Felipe Garduque II denied the motion to dismiss holding
that the allegation of lack of ER-EE relationship was not clearly
established
o Candidos evidence: showed that he worked for Azcor as
ceramics worker for more than 2 years starting from
April 1989 to June 1991 receiving a daily wage of

P118.00 plus other benefits such as vacation and sick

leaves. From april to September, the amount of P50.00
was deducted from his salary without informing him the
reason
Upon the recommendation of his doctors Candido verbally
requested to go on sick leave due to bronchial asthma.
o His illness was proven to be directly caused by his job
as a ceramics worker
o This was due to the lack of the prescribed occupational
safety gadgets; thus, he inhaled and absorbed harmful
ceramic dusts
His supervisor approved his request
Four months later, Candido went back to Azcor to resume his
work after recuperating.
He was not allowed to do so by his supervisors and informed
him that only the owner, Arturo, could allow him to continue
his job.
He returned five times to Azcor but when it became apparent
that he would not be reinstated, he immediately filed the
complaint for illegal dismissal
o Evidence in support of this claim:
Affidavit and testimony to prove that he was
terminated without due process and just cause
Identification card issued by Azcor which he
continued to use even after his supposed
employment by Filipinas
Certification of SSS premium payments
SSS Member Assistance Form wherein he stated
that he worked with Azcor from March 1989 to
1991
Certification of Employee Contribution with SSS
Payslips issued by Azcor
Petitioners allege that Candido was a former employee of Azcor
who resigned on February 28, 1990 as evidenced by a letter of
resignation and joined Filipinas on March 1990 as shown by a
contract of employment
Candido allegedly informed his supervisor that he intended to
go on terminal leave because he was not feeling well
On March 1, 1991, he submitted a letter of resignation
addressed to the President of Filipinas Paso, Manuel Montilla,
o In the early part of June 1991 Capulso tried to apply for
work again with Filipinas Paso but there was no vacancy
o Petitioners submitted the ff. evidence:

Sworn statement of Candidos supervisor and her

actual testimony to prove that respondent
actually resigned from Azcor to Filipinas Paso
(and thereafter from Filipinas Paso due to failing
health)
Contract of Employment between Filipinas Paso
and Candido
Letter of resignation of Candido (both to
Filipinas Paso and Azcor)
Individual income tax return of Candido
BIR Form which was an alphabetical list of
employees of Filipinas Paso for the year of 1990
LA dismissed the complaint for lack of merit but ordered Azcor
to refund to Candido the amount illegally deducted from his
salary
NLRC modified the decision by declaring the dismissal of
Candido as illegal for lack of just and valid cause and ordered
to reinstate Candido
The contract of employment with Candido and Filipinas Paso
stated that theperiod is for 6 months which establishes a
presumption that the said contract could pass either as to
cover the probationary period, or job contractingthe
completion of which automatically terminates the employment
o However, Candido continued working for Filipinas Paso
after the lapse of the contract until the alleged
termination of employment of the appellant
o The two resignation letters executed by the appellant
are EXACTLY WORDEDshows that the same were
prepared by one person plus, Candido denied having
executed the same
o These clearly show that there was no interruption in the
service of the complainant with Azcor from April 1989
to June 1991 when Candido was unceremoniously
dismissed
Azcor and Filipinas Paso orchestrated the events that
appeared, showing bad faith of the respondents in the
treatment of their employees
MR was granted by the NLRC. Meanwhile, during the
pendency of the case before the SC Candido succumbed to
asthma and heart disease
Azcor Manufacturing Inc, Filipinas Paso, and Arturo Zuluaga
instituted this petition for certiorari to assail the decision of the
NLRC which reversed the decision of the LA dismissing the
complaint of respondent Candido Capulso against petitioners

RULING: Petition DISMISSED. Since Candido died during the

pendency, backwages from the time of illegal dismissal to the time
of his death.
Whether or not Candido was illegally dismissedYES
Azcor and Filpinas Paso insist that Candido was not really
dismissed but he voluntarily resigned and there was nothing
illegal or unusual in the letters of resignation he executed
The court disagrees. To constitute a resignation, it must be
unconditional and with the intent to operate as such. There
must be an intention to relinquish a portion of the term of
office accompanied by an act of relinquishment
In the instant case, the fact that Candido indicated his intent to
return to his work when he went back to Azcor after
recuperating and actively pursued this case for illegal
dismissal when he was refused admission, negated any
intention on his part to relinquish his job at Azcor
A closer look at the subject resignation letters reveal that they
were indentically worded for both companies; both were pre
drafted with blank spaces filled up with the purported dates of
effectivity of his resignation; and it was written in English, a
language which Candido was not conversant with considering
his low level of education
This shows that the letters were prepared by the same person
or persons other than Candido
o He also categorically disowned the signatures therein
and denied having executed themindication that
resignation letters were drafted without his consent and
participation
For the sake of argument, even if the signatures were genuine,
the court cannot give credence to those letters in the absence
of any showing that Candido was aware that he was signing
then, were in fact resignation letters or that he fully
understood the contents thereof
o It was incumbent upon Azcor and Filipinas Paso to
prove clearly and convincingly their genuineness and
due execution, especially considering the serious doubts
on their authenticity. They failed miserably in this
respect.
Whether or not Candidos repudiation of the signatures was
weakened by the fact that he filed the case after four
months from the date of the dismissalNO

In an action for reinstatement by reason of illegal dismissal is

one based on an injury may be brought within 4 years from the
time of dismissal pursuant to Article 1146 of the NCC
o Candidos case which was filed after a measly delay of
four months should not be treated with skepticism or
cynicism.
o By law and settled jurisprudence, he has four years to
file his complaint for illegal dismissal
o A delay of four months is more than sufficient
compliance with the prescriptive period
It may betray an unlettered mans lack of awareness of his
rights as a lowly worker, but certainly he must not be penalized
for his tarrying

Whether or not petitioners (Azcor and Filipinas Paso) could

not be held jointly and severally liable to Candido for
backwages since they are separate and distinct corporations
with different corporate personalitiesNO
Court is not persuaded by that argument.
The doctrine that a corporation is a legal entity or a person in
law distinct from the persons composing it is a legal fiction for
purposes of convenience and to subserve the ends of justice

This fiction cannot be extended to a point beyond its

reason and policy
o Where, as in this case, corporate fiction was used as a
means to perpetrate a social injustice, it would be
discarded and the two corporations would be merged as
one, the first being merely considered as the
instrumentality, agency, or adjunct of the other
In the case at bar, there was much confusion as to the identity
of Candidos employer, but for sure it was Filipinas Paso and
Azcors own design. First, Candido had no knowledge that he
was already working under Filipinas Paso since he continued to
retain his Azcor ID. Second, his pay slips contained the name of
Azcor giving the impression that the latter was paying his
salary. Third, he was paid the same salary and performed the
same job, in the same work area, in the same location, using
the same tools, and under the same supervisor.
In fine, we see in the totality of the evidence show a veiled
attempt by petitioners to deprive Candido of what he had
earned through hard labor by taking advantage of his low level
education and confusing him as to who really was his employer
a callous and despicable treatment of a worker who had
rendered faithful service to their company
o