PANUNCILLO vs. CAP PHILIPPINES Case DigestMILAGROS PANUNCILLO v. CAP PHILIPPINES, INC.

515 SCRA 323 (2007)

FACTS:

Milagros Panuncillo was hired as Office Senior Clerk by CAP Philippines Inc. In order to secure the education of her son, Panuncillo procured an
educational plan which she had fully paid but which she later sold to Josefina Pernes for P37,000. Before the actual transfer of the plan could be
effected, however, Panuncillo pledged it for P50,000 to John Chua who, however, sold it to Benito Bonghanoy. Bonghanoy in turn sold the plan to
Gaudioso R. Uy forP60,000. Having gotten wind of the transactions subsequent to her purchase of the plan, Josefina informed CAP Philippines Inc.
that Panuncillo had "swindled" her butthat she was willing to settle the case amicably as long as Panuncillo will pay the amount involved and the
interest. CAP Philippines Inc. terminated the services of Panuncillo. Panuncillo sought reconsideration of her dismissal. Acting on Panuncillo’s
motion for reconsideration, CAP Philippines Inc. denied the same. Panuncillo thus filed a complaint for illegal dismissal, 13th month pay, service
incentive leave pay, damages and attorney’s fees against CAP Philippines Inc. The Labor Arbiter, while finding that the dismissal was for a valid
cause, found the same too harsh. He thus ordered the reinstatement of Panuncillo to a position one rank lower than her previous position. On
appeal, the National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter. It held that Panuncillo’s dismissal was illegal
and accordingly ordered her reinstatement to her former position. CAP Philippines Inc. challenged the NLRC Decision before the appellate court via
Petition for Certiorari. The appellate court reversed the NLRC Decision and held that the dismissal was valid and that CAP Philippines Inc. complied
with the procedural requirements of due process. Hence, the present petition.

ISSUE:
Whether or not Milagros has been illegally dismissed

HELD:
Panuncillo’s repeated violation of Section 8.4 of CAP Philippines Inc’s Code of Discipline, she violated the trust and confidence of CAP Philippines
Inc. and its customers. To allow her to continue with her employment puts CAP Philippines Inc. under the risk of being embroiled in unnecessary
lawsuits from customers similarly situated as Josefina, et al. Clearly, CAP Philippines Inc. exercised its management prerogative when it dismissed
Panuncillo. Under the Labor Code, the employer may terminate an employment on the ground of serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or representative in connection with his work. Infractions of company rules and regulations have been
declared to belong to this category and thus are valid causes for termination of employment by the employer. The employer cannot be compelled to
continue the employment of a person who was found guilty of maliciously committing acts which are detrimental to his interests. It will be highly
prejudicial to the interests of the employer to impose on him the charges that warranted his dismissal from employment. Indeed, it will demoralize the
rank and file if the undeserving, if not undesirable, remain in the service. It may encourage him to do even worse and will render a mockery of the
rules of discipline that employees are required to observe. This Court was more emphatic in holding that in protecting the rights of the laborer; it
cannot authorize the oppression or self-destruction of the employer. There can thus be no doubt that Panuncillo was given ample opportunity to
explain her side. Parenthetically, when an employee admits the acts complained of, as in Panuncillo’s case, no formal hearing is even necessary.

M T . C A R M E L C O L L E G E V S . J O C E L Y N R E S U E N A , E D D I E VILLALON,SY
LVIA SEDAYON and ZONSAYDA EMNACE
FACTS:

P e t i t i o n e r M t . C a r m e l C o l l e g e i s a p r i v a t e e d u c a t i o n a l i n s t i t u t i o n a n d respondents were its emplo

y e e s . R e s p o n d e n t s w e r e d i s m i s s e d f o r j o i n i n g t h e protest action against the school administration. The Labor Arbiter (LA) found
that they were not illegally dismissed but ordered that they be awarded 13th month pay, separation pay and attorney’s fees. The NLRC reversed the
findings of the LA finding
t h e t e r m i n a t i o n o f t h e r e s p o n d e n t s a s i l l e g a l a n d o r d e r i n g t h e p a y m e n t o f backwages of respondents.
Tt further directed the reinstatement of respondents by way of payment of separation pay, with backwages. This was affirmed by the Court of Appeals.
P e t i t i o n e r i s a p p e a l i n g n o t t h e j u d g m e n t o f t h e N L R C b u t t h e m a n n e r o f execution of the same. Petitioner argues that
the CA erred in upholding the LA and the NLRC that the award for bakwages goes beyond the period May 15, 1998 to May 25, 1999
on the supposition that reinstatement is self-executory and does not
n e e d a w r i t o f e x e c u t i o n f o r i t s e n f o r c e m e n t . P e t i t i o n e r a v e r s t h a t t h e L A w e n t beyond the terms of the NLRC
decision, as affirmed by the CA, and erroneously
u s e d a s b a s e s i n a p p l i c a b l e l a w a n d j u r i s p r u d e n c e i n t h e e x e c u t i o n o f t h e same.Petitioner contends
that the award of backwages subject to execution is limited to the period prior to the appeal and does not include the period during the
pendency of the appeal, on the contention that reinstatement during appeal is warranted only when the Labor Arbiter rules that the
dismissed employee should be reinstated.

ISSUES:
1. Whether reinstatement in the case is self-executory and does not need a writ of execution for its enforcement.
2. Whether the continuing award of backwages is proper.
RULING:
1. No (though the court sees no cogent reason as to the relevance of a discussion of this issue only that petitioner raised it as
an issue). The court states that the above findings will not affect the award of backwages for the period beyond May 25, 1999. Article
 224 applies in the given case since the order of reinstatement was first decided upon appeal to the NLRC and affirmed with finality by
the CA.
2. 2. Yes. The court found out that there is a conflict between the dispositive portion of the fallo and the body of the decision. The fallo stated
that respondents were illegally dismissed and must therefore be ordered reinstated with payment of backwages from the time were
illegally dismissed up to the time of their actual reinstatement. In view thereof, the court declared that the fallo controls. Applying Article
279 of the Labor Code, the court emphasized that backwages are to be computed from the time of illegal dismissal until
reinstatement or upon petitioner’s payment of separation pay to respondents if reinstatement is no longer feasible.

Garcia and Dumago v. Philippine Airlines (G.R. No. 164856)

Facts:
Petitioners-employees filed a complaint for illegal dismissal against respondent PAL who dismissed them after they were allegedly caught in the act
of sniffing shabu within its premises. The Labor Arbiter ruled for the petitioners and ordered immediately for their reinstatement. Prior to this decision,
SEC had placed PAL under an Interim Rehabilitation Receiver, and subsequently under a Permanent Rehabilitation Receiver. PAL appealed and the
Labor Tribunal ruled in their favor. Subsequently, the Labor Arbiter issued a writ of execution for the reinstatement and issued a notice of
garnishment. The Labor Tribunal affirmed the writ and notice but suspended and referred the action to the Rehabilitation Receiver of PAL. On
appeal, CA found for respondent PAL.

Issue:
Whether or not PAL being under corporate rehabilitation suspends any monetary claims to it.

Ruling:
YES.
It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before any court, tribunal or board against the
corporation shall ipso jure be suspended. As stated early on, during the pendency of petitioners’ complaint before the Labor Arbiter, the SEC placed
respondent under an Interim Rehabilitation Receiver. After the Labor Arbiter rendered his decision, the SEC replaced the Interim Rehabilitation
Receiver with a Permanent Rehabilitation Receiver. While reinstatement pending appeal aims to avert the continuing threat or danger to the survival
or even the life of the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is similarly in
a judicially monitored state of being resuscitated in order to survive.

G.R. No. 172149 February 8, 2010

SESSION DELIGHTS ICE CREAM AND FAST FOODS vs. CA

FACTS:
Adonis Flora filed a complaint for illegal dismissal against Session Delights, which was ruled favorably by the Labor Arbiter. The decision ordered
Session Delights to pay Flora back wages, separation pay in lieu of reinstatement, indemnity and attorney’s fees. Upon appeal, NLRC also ruled in
favor of complainant. CA Decision affirmed but deleted the proportional 13th month pay and the award of indemnity (P5000) for failure to observe
due process. In the course of the execution of the judgement, the Finance Analyst submitted an updated computation of the award which included
the proportionate amount of 13th month pay. This was objected by Session, claiming that this was not consistent with the decision but the same was
denied by NLRC. The CA, however, partially granted the petition by deleting the awarded proportionate 13th month pay

ISSUE:
WON the updated computation was proper

Held:
Yes, the updated computation was proper.
The issue in the case at bar is not the correctness of the awards, the finality of the CA’s judgment, nor the petitioner’s failure to appeal.
Rather, it is the propriety of the computation of the awards made, whether this violated the principle of immutability of final judgments.
The question is whether a re-computation in the course of execution, of the labor arbiter’s original computation of the awards made pegged
as of the time the decision was rendered and confirmed with modification by a final CA decision, is legally proper.
The Court held that under the terms of the decision under execution, no essential change is made by a re-computation as this step is a
necessary consequence that flows from the nature of the illegality of dismissal declared in that decision. Are-computation (or an original computation,
if no previous computation has been made) is a part of the law – specifically, Article 279 of the Labor Code and the established jurisprudence on this
provision – that is read into the decision. By the nature of an illegal dismissal case, the reliefs continue to add on until full satisfaction, as expressed
under Article 279 of the Labor Code. The re-computation of the consequences of illegal dismissal upon execution of the decision does not constitute
an alteration or amendment of the final decision being implemented. The illegal dismissal ruling stands; only the computation of the monetary
consequences of this dismissal is affected and this is not a violation of the principle of immutability of final judgments.
Assailed decision is AFFIRMED. Labor Arbiter is asked to conduct another RE-COMPUTATION to determine actual award based on
Court’s directives.
TIMOTEO H. SARONA v.
NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 185280, January 18, 2012
Corporation Law Case Digest by John Paul C. Ladiao (15 March 2016)
(Topic: Doctrine of Piercing the Veil of Corporate Fiction)

FACTS:

On June 20, 2003, the petitioner, who was hired by Sceptre as a security guard sometime in April 1976, was asked by Karen Therese Tan (Karen),
Sceptre’s Operation Manager, to submit a resignation letter as the same was supposedly required for applying for a position at Royale. The
petitioner was also asked to fill up Royale’s employment application form, which was handed to him by Royale’s General Manager, respondent
Cesar Antonio Tan II (Cesar).

After several weeks of being in floating status, Royale’s Security Officer, Martin Gono (Martin), assigned the petitioner at Highlight Metal Craft, Inc.
(Highlight Metal) from July 29, 2003 to August 8, 2003. Thereafter, the petitioner was transferred and assigned to Wide Wide World Express, Inc.
(WWWE, Inc.).

On September 17, 2003, the petitioner was informed that his assignment at WWWE, Inc. had been withdrawn because Royale had allegedly been
replaced by another security agency. The petitioner, however, shortly discovered thereafter that Royale was never replaced as WWWE, Inc.’s
security agency. When he placed a call at WWWE, Inc., he learned that his fellow security guard was not relieved from his post.

On September 21, 2003, the petitioner was once again assigned at Highlight Metal, albeit for a short period from September 22, 2003 to September
30, 2003. Subsequently, when the petitioner reported at Royale’s office on October 1, 2003, Martin informed him that he would no longer be given
any assignment per the instructions of Aida Sabalones-Tan (Aida), general manager of Sceptre. This prompted him to file a complaint for illegal
dismissal on October 4, 2003.

ISSUE:

Whether or not Royale’s corporate fiction should be pierced for the purpose of compelling it to recognize the petitioner’s length of service with
Sceptre and for holding it liable for the benefits that have accrued to him arising from his employment with Sceptre?

RULING:

Yes.
The doctrine of piercing the corporate veil applies in alter ego cases, where a corporation is merely a farce since it is a mere alter ego or business
conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality,
agency, conduit or adjunct of another corporation.

The respondents’ scheme reeks of bad faith and fraud and compassionate justice dictates that Royale and Sceptre be merged as a single entity,
compelling Royale to credit and recognize the petitioner’s length of service with Sceptre. The respondents cannot use the legal fiction of a separate
corporate personality for ends subversive of the policy and purpose behind its creation53 or which could not have been intended by law to which it
owed its being.

Also, Sceptre and Royale have the same principal place of business. As early as October 14, 1994, Aida and Wilfredo became the owners of the
property used by Sceptre as its principal place of business by virtue of a Deed of Absolute Sale they executed with Roso.57 Royale, shortly after its
incorporation, started to hold office in the same property. These, the respondents failed to dispute.

Royale also claimed a right to the cash bond which the petitioner posted when he was still with Sceptre. If Sceptre and Royale are indeed separate
entities, Sceptre should have released the petitioner’s cash bond when he resigned and Royale would have required the petitioner to post a new
cash bond in its favor.

However, the manner by which the petitioner was made to resign from Sceptre and how he became an employee of Royale suggest the perverted
use of the legal fiction of the separate corporate personality.

Royale is a continuation or successor of Sceptre.

BACKWAGES/SEPARATION PAY

Daniel P. Javellana, Jr. vs. Albino Belen / Albino Belen vs. Daniel P. Javellana, Jr. and Javellana farms
G.R. No. 181913, G.R. No. 182158, March 5, 2010

Facts:

Petitioner Albino Belen filed a complaint against respondents Javellana Farms, Inc. and Daniel Javellana, Jr. for illegal dismissal and underpayment
or non-payment of salaries, overtime pay, holiday pay, service incentive leave pay (SILP), 13th month pay, premium pay for holiday, and rest day as
well as for moral and exemplary damages and attorney's fees. Petitioner alleged that respondent Javellana hired him as company driver on January
31, 1994and assigned him the tasks of picking up and delivering live hogs, feeds, and lime stones used for cleaning the pigpens. On August 20,
1999, respondent Javellana suddenly fired petitioner, which prompted petitioner to file a complaint. Respondent Javellana on the other hand claimed
that he hired petitioner not as a company driver but as a family driver.

The Labor Arbiter found petitioner Belen to be a company driver as evidenced by the pay slips that the farm issued to him and awarded him
backwages, separation pay, 13th month pay, SILP, holiday pay, salary differential, and attorney's fees. On appeal, the National Labor Relations
Commission (NLRC) declared Belen as a family driver. The NLRC also found Belen to have been illegally dismissed. But since he was but a family
driver, the NLRC deleted the award of backwages and separation pay and instead ordered Javellana to pay him 15 days salary by way of indemnity
pursuant to Article 149 of the Labor Code. Aggrieved, petitioner elevated the matter to the CA, the CA held Belen as a company driver since, aside
from driving respondent Javellana and his family, he also did jobs that were needed in Javellana's business operations, such as hauling and
delivering live hogs, feeds, and lime stones for the pig pens.The CA also said that Javellana's abrupt dismissal of Belen for an isolated case of
neglect of duty was unjustified.

Issue:
Should the monetary award in his favor run until the finality of the decision in his case?

Ruling:
Yes. As provided in Art. 279 of the Labor Code, the law intends the award of backwages and similar benefits to accumulate past the date of the
Labor Arbiter's decision until the dismissed employee is actually reinstated. But if, as in this case, reinstatement is no longer possible, this Court has
consistently ruled that backwages shall be computed from the time of illegal dismissal until the date the decision becomes final.

The parties filed separate petitions before this Court. The petition in G.R. 181913, filed by respondent Javellana, questioned the CA's finding of
illegality of dismissal while the petition in G.R. 182158, filed by petitioner Belen, challenged the amounts of money claims awarded to him. The Court
denied the first with finality in its resolution of September 22, 2008; the second is the subject of the present case. Consequently, Belen should be
entitled to backwages from August 20, 1999, when he was dismissed, to September 22, 2008, when the judgment for unjust dismissal in G.R.
181913 became final.In his separation pay, technically the computation of separation pay would end on the day he was dismissed on August 20,
1999 when he supposedly ceased to render service and his wages ended. But, since Belen was entitled to collect backwages until the judgment for
illegal dismissal in his favor became final, here on September 22, 2008, the computation of his separation pay should also end on that date.

Further, since the monetary awards remained unpaid even after it became final on September 22, 2008, it is but fair that respondent Javellana be
required to pay 12% interest per annum on those awards from September 22, 2008 until they are paid.