**Facts:**
1. **Contract with AAFES:**
– Petitioner Clark Field Taxi, Inc. (CFTI), operated a taxi service within Clark Air Base under a concessionaire’s contract with the Army Air Force Exchange Services (AAFES).
– Sergio F. Naguiat was CFTI’s president, and Antolin T. Naguiat the vice-president.
2. **Employment of Respondents:**
– Respondents were employed as taxicab drivers by CFTI, paying a daily boundary fee and handling all incidental expenses, including maintenance and gasoline.
3. **Closure of Clark Air Base:**
– Due to the phase-out of US military bases, including Clark Air Base, the individual respondents’ employment was terminated on November 26, 1991.
4. **Separation Pay Negotiations:**
– AAFES Taxi Drivers Association and CFTI agreed on a separation benefit of P500 for every year of service. Most drivers accepted this, but the respondents did not.
5. **Filing a Complaint:**
– Respondents, after disaffiliating from the union, joined the National Organization of Workingmen (NOWM) and filed a complaint for payment of separation pay based on their earnings of US$15 daily.
6. **Labor Arbiter’s Decision:**
– The labor arbiter ordered CFTI to pay P1,200 for every year of service. This decision was appealed.
7. **NLRC’s Resolution:**
– The NLRC modified the decision, awarding US$120 (one-half monthly earnings of $240) or its peso equivalent per year of service and holding Naguiat Enterprises and its officers jointly and severally liable.
– The motion for reconsideration by petitioners was denied.
8. **Supreme Court Petition:**
– Petitioners pursued the case to the Supreme Court via certiorari under Rule 65, assailing the NLRC resolutions.
**Issues:**
1. **Grave Abuse of Discretion by NLRC:**
– Whether the NLRC committed grave abuse of discretion in increasing the severance pay awarded by the labor arbiter.
2. **Representation Authority:**
– Whether NOWM could validly represent the respondents.
3. **Corporate and Personal Liability:**
– Whether Sergio F. Naguiat Enterprises, Inc., and Sergio and Antolin Naguiat could be held jointly and severally liable for CFTI’s obligations.
4. **Due Process:**
– Whether the individual Naguiats were denied due process since they were not impleaded as parties to the initial complaint.
**Court’s Decision:**
1. **Grave Abuse of Discretion:**
– **Amount of Separation Pay:** The Court found no grave abuse of discretion in the NLRC’s ruling. The NLRC correctly based the separation pay on the unrefuted claim of the drivers’ monthly earnings of $240.
– **Financial Losses:** Petitioners failed to provide substantial evidence of financial losses to justify not paying separation pay due to the phase-out of Clark Air Base.
2. **Representation Authority:**
– **Estoppel:** Petitioners were estopped from questioning NOWM’s representation authority as they had not raised this issue timely before labor proceedings.
3. **Corporate and Personal Liability:**
– **Naguiat Enterprises:** There was no substantial evidence proving Naguiat Enterprises as the indirect employer or a labor-only contractor. The labor agreements and employment documents showed CFTI as the employer.
– **Sergio F. Naguiat (Liability):** As president of CFTI and involved actively in management, he could be held personally liable based on **A.C. Ransom Labor Union-CCLU vs. NLRC** interpreting corporate officers’ liability for corporate torts.
– **Antolin T. Naguiat (Exemption):** Did not show participation in management sufficient to hold him personally liable.
4. **Due Process:**
– The Court found no denial of due process. The individual Naguiats submitted their position papers voluntarily, thus subjecting themselves to the jurisdiction of the labor arbiter.
**Doctrine:**
1. **Separation Pay Calculation:**
– The basis for separation pay includes the last monthly earnings multiplied by the years of service, as stipulated under Article 283 of the Labor Code.
2. **Solidary Liability of Corporate Officers:**
– Corporate officers can be held jointly and severally liable for corporate obligations if found to manage and control business operations directly, especially in closely-held family corporations, as outlined in **A.C. Ransom Labor Union-CCLU vs. NLRC** and Section 100 (5) of the Corporation Code.
**Class Notes:**
1. **Article 283 (Labor Code):** Provides for separation pay in cases of retrenchment, closures or cessation of operations not due to financial reverses.
2. **A.C. Ransom Principle:** Establishes corporate officers’ personal liability in labor claims when officers are found directly managing corporate operations.
3. **Estoppel in Labor Representation:** Fails to timely challenge representation authority precludes raising the argument later.
**Historical Background:**
– **Phase-out of US Military Bases:** The case arose amidst the geopolitical shift following the expiration of the US-Philippines military bases agreement, marking the closure of US military operations at Clark Air Base and consequent employment impacts on local Filipino workers.
**WHEREFORE, the Supreme Court MODIFIED the NLRC Resolution:**
1. **CFTI and Sergio F. Naguiat:** Jointly and severally liable for paying the respondents $120 or its peso equivalent per year of service.
2. **Naguiat Enterprises and Antolin T. Naguiat:** Absolved from liability.
**SO ORDERED.**
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