AC Ransom Labor Union v.

NLRC (1986)

Doctrines:

 Since a corporate employer is an artificial person, it must have an officer who can be presumed to be the
employer, being the “person acting in the interest of the employer.”

Facts:

On June 6, 1961, employees of AC Ransom, most being members of the AC Ransom Labor Union, went on
strike. The said strike was lifted on June 21 with most of the strikers being allowed to resume their work. However,
twenty two strikers were refused reinstatement.

During 1969, the Hernandez family (owners of AC RANSOM) organized another corporation under the name of
Rosario Industrial Corporation. The said company dealt in the same type of business as AC Ransom.

The issue of back wages was brought before the Court of Industrial Relations which rendered a decision on
December 19, 1972 ordering the twenty two strikers to be reinstated with back wages.

On April 2, 1973, RANSOM filed an application for clearance to close or cease operations. The same was
granted by the Ministry of Labor and Employment. Although it has stopped operations, RANSOM has continued its
personality as a corporation. For practical purposes, reinstatement of the 22 strikers has been precluded. As a matter of
fact, reinstatement is not an issue in this case.

A motion of execution was filed by the Union against AC Ransom but the former was unable to collect due to the
inability to find leviable assets of the company. The Union subsequently asked the officers of Ransom to be personally
liable for payment of the back wages. The motion was granted by the Labor Arbiter but was subsequently reversed by
the NLRC.

Issue:

1. W/N the officers of the corporation should be held personally liable to pay for the back wages.

Held:

1. YES. Under Article 212 (c) of the Labor Code, “Employee” includes any person acting in the interest of an
employer, directly or indirectly. Since Ransom is an artificial person, it must have an officer who can be presumed
to be the employer, being the “person acting in the interest of the employer (Ransom).”

In PD 525, where a corporation fails to pay the emergency allowance therein provided, the prescribed penalty
“shall be imposed upon the guilty officer or officers” of the corporation.

In the instant case, RANSOM, in foreseeing the possibility or probability of payment of back wages to the 22
strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers
win their case.

The record does not clearly identify “the officer or officers” of RANSOM directly responsible for failure to pay
the back wages of the 22 strikers. In the absence of definite proof in that regard, it should be presumed that the
responsible officer is the President of the corporation who can be deemed the chief operation officer thereof.