DR. DENNIS MAYER A. TAN, PETITIONER, VS. DR. BERNABE NOEL F. SAUZ AND NATIONAL LABOR RELATIONS COMMISSION, RESPONDENTS.
SORONGON, J.:
The antecedent facts:
Private respondent became an Obstetrics-Gynecology (Ob-Gyne) consultant of the Casaul General Hospital (CGH for brevity) in 1991 following his arrival from the United States. After some time, he was promoted in 1997 as Chief of Clinics of the said hospital. On November 12, 2009, petitioner, as Medical Director of CGH, terminated him as Chief of Clinics and revoked his consulting services as Ob-Gyne.
Felt aggrieved, private respondent filed a Complaint[3] for illegal dismissal and non-payment of 13th month pay with prayer for moral, exemplary and nominal damages and attorney’s fees before the NLRC, Quezon City against petitioner, CGH and the members of its Ethics Committee, namely: Eva Icalia, Colyn Almeda, Dr. Cecilia Perez and Dalisay Bayobay.
On October 29, 2010 Labor Arbiter Virginia T. Luyas-Azarraga rendered a decision[4] declaring all the respondents in the complaint guilty of illegal dismissal and ordering them to pay herein private respondent his backwages and separation pay. The Labor Arbiter disregarded petitioner’s claim that private respondent was merely a consultant of CGH and instead found him to be its regular employee and can only therefore be dismissed based on lawful cause and after observance of due process. It was also held that private respondent’s involvement in an intra-corporate controversy involving Dr. Carlos S. Lanting College, Inc. (DCLC), a sister company of CGH, in his capacity as school physician of the former, is not one of the just causes enumerated in Art. 282 of the Labor Code to justify his termination from employment. Thus:
“WHEREFORE, premises considered, judgment is rendered declaring the dismissal of complainant from the service illegal. Thus, respondents in solidum, are directed to pay complainant the total sum of P324,908.00 representing his separation pay and backwages.
SO ORDERED.”
On appeal, the NLRC affirmed in toto the judgment of the Labor Arbiter. A reconsideration was sought by the respondents therein but it was similarly denied by the NLRC.
Only petitioner interposed the present recourse based on the following issues: 1) Whether or not private respondent as Chief of clinics of CGH is a regular employee entitled to security of tenure; (2) Whether or not petitioner is jointly and solidarily liable with CGH for private respondent’s backwages and separation pay; and (3) Whether the NLRC has jurisdiction over the case.
Is petitioner a regular employee?
In Goma vs. Pamplona Plantation Incorporated,[5] the Supreme Court explicitly discussed the two kinds of regular employee based on Article 280 of the Labor Code[6], to wit:
As can be gleaned from this provision, there are two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. Simply stated, regular employees are classified into: regular employees by nature of work; and regular employees by years of service. The former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability, of that activity to the business.
As Chief of Clinics, private respondent’s employment with the hospital was indispensable and necessary to the operation of CGH. His duties as such involved supervision of operation of hospital clinics. Thus, it can be said that his employment was vital to CGH’s operation.[7] Private respondent had been continuously performing his job as Chief of Clinics since July 18, 1997 until his termination in November 2009. In fine, private respondent is a salaried employee of CGH whose stint thereat had made the hospital paid for his SSS, Pag-Ibig and Phil Health[8] contributions as shown by the deductions in his payslips.
By virtue of private respondent’s regular employment, he is entitled to security of tenure as provided under Section 2, Rule I, Book VI of the Implementing Rules of the Labor Code which provides:
Section 2. Security of tenure. – (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process.
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Since he was a regular employee his dismissal may only be valid when it is based on just or authorized cause which can only be effected after due notice and hearing.[9] As a complementary principle, the employer has the onus of proving with clear, accurate, consistent, and convincing evidence the validity of the dismissal.[10] The failure on the part of the employer to discharge that burden would necessarily result in a finding that the dismissal is unjustified.
In the present case, petitioner failed to discharge this burden. The involvement of private respondent in an intra-corporate dispute in DCLC, the sister company of CGH, is not a just cause contemplated by Article 282,[11] Article 283[12] and Article 284[13] of the Labor Code. Apart from the fact that his dismissal was not for a valid cause, private respondent was also denied the opportunity of a notice and hearing prior to his firing. As revealed by the records, private respondent was merely notified of his termination from CGH via a letter[14] dated November 12, 2009 without citing the reasons therefor and the benefit of hearing.
When the dismissal of an employee is not for just or authorized cause and there was non-compliance with the rudiments of due process, Article 279 of the Labor Code mandates for the payment of backwages and reinstatement or separation pay if reinstatement is no longer viable. Thus, we affirm the ruling of the NLRC that private respondent, who was illegally dismissed, is entitled to payment of backwages and separation pay. We echo the NLRC’s rationale that under the doctrine of strained relations, it is deemed best to award private respondent separation pay instead of reinstatement because the latter relief will only exacerbate the animosity that was already present in the relationship of the parties.
As to petitioner’s liability, we find him jointly liable with CGH for private respondent’s backwages and separation pay. While as a general rule, corporate officers are not personally liable for their official acts, because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders and members,[15] there are times however, that corporate officers are equally held liable with the obligations of the corporation. In labor cases, corporate directors and officers may be held solidarily liable with the corporation for the termination of employment if done with malice or in bad faith.[16] Did petitioner act with bad faith in dismissing private respondent? For one, the basis for his dismissal is not among the just and authorized causes enumerated under the Labor Code. Private respondent was dismissed due mainly to his involvement in an intra-corporate controversy with DCLC, sister company of CGH, which has a separate juridical entity with CGH. For another, his dismissal was abruptly done by merely informing him that his services as Chief of Clinics and Ob-Gyne consultant were no longer needed thru a letter signed by petitioner without giving him any opportunity to ventilate his side. And then CGH closed-shop on July 15, 2010 by reason of financial losses as evidenced by a letter[17] signed by petitioner dated July 12, 2010. Jurisprudence has recognized that when corporate officers dismissed employees in bad faith or wantonly violate labor standard laws or when the company had already ceased operations and there is no way by which a judgment in favor of employees could be satisfied, corporate officers can be held jointly and severally liable with the company. This is to assure that the valid claims of the employees would not be defeated by the closure of the company.[18]
Similarly, we reject petitioner’s contention that the NLRC has no jurisdiction over this case, the controversy being intra-corporate considering that private respondent as Chief of Clinics is deemed an officer of CGH aside from being its President and Chairman thereof per entry in its General Information Sheet[19] (GIS) submitted before the SEC for the year 2010. Contrary to the claim of petitioner, private respondent is neither an officer of the CGH. In the case of Easycall Communications Phils., Inc. vs. King,[20] the Supreme Court defined corporate officers as those who are given that character either by the Corporation Code or by the corporation’s by-laws. Under Section 25 of the Corporation Code, the “corporate officers” are the president, secretary, treasurer and such other officers as may be provided for in the by-laws.[21] Based on the definition provided by the Corporation Code and jurisprudence, it is obvious that private respondent’s position as Chief of Clinics is not in the category of an officer of CGH. Such position is neither one of those enumerated by Section 25 of the Corporation Code nor was there any proof that the same was created by its by-laws. Now that it is settled that petitioner is not an officer but only a regular employee of CGH, there is therefore no intra-corporate controversy involve in the present case. Thus, jurisdiction lies with the Labor Arbiter and the NLRC because Article 217 of the Labor Code provides:
Art. 217. Jurisdiction of Labor Arbiters and the Commission. — (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural:
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2. Termination disputes;
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Furthermore, the allegation of petitioner that private respondent is the President and Chairman of CGH in the GIS submitted before the SEC is of no moment. It must be noted that the submitted GIS was for the year 2010 and private respondent was terminated on November 12, 2009, where during that time he held the positions of Chief of Clinics and Ob-Gyne consultant as explicitly stated in the termination letter. Thus, the GIS is not a material and sufficient evidence which would remove this case from the jurisdiction of the labor agencies.
Verily, we find that the NLRC did not act with grave abuse of discretion nor without jurisdiction in holding that private respondent was unjustly dismissed and entitled to his money claims. On the contrary, its factual findings are duly supported by the evidence on record. It must be emphasized that basic is the principle that the NLRC, being the most equipped and having acquired expertise in the specific matters entrusted to its jurisdiction, its findings of fact are accorded not only respect but even finality if they are supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. Thus, we find no reason to disturb the challenged decision of the Labor Commission.
WHEREFORE, the instant petition for certiorari is hereby DENIED and the Decision and Resolution of the National Labor Relations Commission dated June 27, 2011 and September 28, 2011, respectively, are accordingly sustained.
SO ORDERED.
Carandang, (Chairman), and Gonzales-Sison, JJ., concur.
[1] Rollo, pp. 26-34.
[2] Ibid, pp. 36-37.
[3] Letter, Ibid, pp. 38-40.
[4] Rollo, pp. 133-141
[5] G.R. No. 160905, July 4, 2008.
[6] Art. 280. Regular and Casual Employment. — The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, that, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
[7] Philips Semiconductors (Phils.), Inc. vs. Fadriquela, G.R. No. 141717, April 14, 2004.
[8] Rollo, pp. 259-260.
[9] Mansion Printing Center and Clement Cheng, G.R. No. 168120, January 25, 2012.
[10] Aliling vs. Feliciano, G.R. No. 185829, April 25, 2012.
[11] Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes:
- Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
- Gross and habitual neglect by the employee of his duties;
- Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
- Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
- Other causes analogous to the foregoing.
[12] Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. xxx xxx xxx
[13] Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: xxx xxx xxx
[14] Rollo, p. 35
[15] Delima vs. Gois, G.R. No. 178352, June 17, 2008.
[16] MAM Realty Development Corporation vs. NLRC, G.R. No. 114787, June 2, 1995.
[17] Rollo, p. 239.
[18] Carag vs. NLRC, G.R. No. 147590, April 2, 2007.
[19] Rollo, pp. 76-83.
[20] G.R. No. 145901, December 15, 2005.
[21] Ibid