When corporate officers are not held solidarily liable with the corporation in illegal dismissal cases. -G.R. No. 185829

G.R. No. 185829

"x x x.

The officers of WWWEC cannot be held

jointly and severally liable with the company

The CA held the president of WWWEC, Jose B. Feliciano, San Mateo and Lariosa jointly and severally liable for the monetary awards of Aliling on the ground that the officers are considered “employers” acting in the interest of the corporation. The CA cited NYK International Knitwear Corporation Philippines (NYK) v. National Labor Relations Commission[50] in support of its argument. Notably, NYK in turn cited A.C. Ransom Labor Union-CCLU v. NLRC.[51]

Such ruling has been reversed by the Court in Alba v. Yupangco,[52] where the Court ruled:

By Order of September 5, 2007, the Labor Arbiter denied respondent’s motion to quash the 3rd alias writ. Brushing aside respondent’s contention that his liability is merely joint, the Labor Arbiter ruled:

Such issue regarding the personal liability of the officers of a corporation for the payment of wages and money claims to its employees, as in the instant case, has long been resolved by the Supreme Court in a long list of cases [A.C. Ransom Labor Union-CLU vs. NLRC (142 SCRA 269) and reiterated in the cases of Chua vs. NLRC(182 SCRA 353), Gudez vs. NLRC (183 SCRA 644)]. In the aforementioned cases, the Supreme Court has expressly held that the irresponsible officer of the corporation (e.g. President) is liable for the corporation’s obligations to its workers. Thus, respondent Yupangco, being the president of the respondent YL Land and Ultra Motors Corp., is properly jointly and severally liable with the defendant corporations for the labor claims of Complainants Alba and De Guzman. x x x

x x x x

As reflected above, the Labor Arbiter held that respondent’s liability is solidary.

There is solidary liability when the obligation expressly so states, when the law so provides, or when the nature of the obligation so requires. MAM Realty Development Corporation v. NLRC, on solidary liability of corporate officers in labor disputes, enlightens:

x x x A corporation being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, acting as such corporate agents are not theirs but the direct accountabilities of the corporation they represent. True solidary liabilities may at times be incurred but only when exceptional circumstances warrant such as, generally, in the following cases:

1. When directors and trustees or, in appropriate cases, the officers of a corporation:

(a) vote for or assent to patently unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate affairs;

x x x x

In labor cases, for instance, the Court has held corporate directors and officers solidarily liable with the corporation for the termination of employment of employees done with malice or in bad faith.

A review of the facts of the case does not reveal ample and satisfactory proof that respondent officers of WWEC acted in bad faith or with malice in effecting the termination of petitioner Aliling. Even assuming arguendo that the actions of WWWEC are ill-conceived and erroneous, respondent officers cannot be held jointly and solidarily with it.  Hence, the ruling on the joint and solidary liability of individual respondents must be recalled.        

x x x."