ENRIQUE RAZON, JR, AND METROPORT SERVICES, INC., PETITIONERS, VS. NATIONAL LABOR RELATIONS COMMISSION AND NICOLAS S. GARZOTA, RESPONDENTS.

In this petition for certiorari, petitioners Enrique Razon, Jr. and Metroport
Services, Inc. seek to set aside the resolution dated
August 28, 1987 of the National Labor Relations Commission affirming the
decision of the Labor Arbiter which ordered petitioners to pay private
respondent Nicolas S. Garzota his retirement pay, loyalty bonus and cash conversion of accrued vacation leave in the total amount of P131,400.00.

Since 1966, private
respondent had been employed by petitioner company then known as E. Razon, Inc.  Sometime
in 1979, Alfredo Romualdez, the youngest brother of
the then First Lady, Imelda R. Marcos, acquired control of E. Razon, Inc, and renamed it Metroport
Services, Inc.^[1]

On February
26, 1986, after the
February Revolution, petitioners regained control of the company.^[2]

On February
28, 1986, because of
failing health and having qualified for compulsory retirement at age 65,
private respondent, then the company’s chief accountant, submitted a
letter-request for retirement. 
Petitioners withheld action
on said request pending completion of the audit of company books
undertaken by the accounting firm of Sycip, Gorres and Velayo.^[3]

In the course of such
audit, petitioners discovered that the following books of account allegedly in
the custody of private respondent as chief accountant were missing:  [a] general ledgers for the years 1981 and
1983; [b] cash disbursement books for 1981 to
1983; [c] cash receipt books for 1981 to 1983; [d] bills register for 1981 to
1983; [e] cash vouchers for 1981 to 1984; [f] journal vouchers for 1981 to
1984; and [g] sales register for 1983 to 1984.^[4]

As consequence thereof, petitioner Enrique Razon,
Jr. issued on March 19, 1986
a memorandum terminating the services of private respondent on the ground of
loss of trust and confidence.

Meanwhile, the Philippine Ports Authority awarded the management
and operation of the arrastre services at the South
Harbor to a new company, the Marina
Port Services, Inc., which hired private respondent.  The latter has since been connected with said
firm.

Acting on private respondent’s complaint for illegal dismissal
and unpaid retirement benefits, the Labor Arbiter, on January 30, 1987, rendered the following
decision:

“WHEREFORE, premises considered, respondent Metro Port
Services, Inc. or Enrique Razon, Jr., in case of the company’s failure to pay, is hereby
ordered to pay complainant
Nicolas S. Gartoza the following amounts:

P60,000.00  –  for retirement pay

60,000.00  –  for
loyalty bonus

11,400.00  –  cash
conversion of accrued vacation leave,
or a total of P131,400.00.”^[5]

On appeal, the National Labor Relations Commission sustained the
Labor Arbiter in its resolution of August
28, 1987.^[6]
Hence, the instant petition.

Petitioners contend that the NLRC gravely abused its discretion
when it sustained the grant of retirement benefits to private respondent and
held Enrique Razon, Jr. solidarily
liable with Metroport Services, Inc. for the payment
thereof.

It is the perception of petitioners that management is vested with discretion to approve or disapprove an employee’s claim for
retirement benefits.  They anchor this
view on Article II (B) of the Retirement Plan which states that “(a)ny official and
employee who is 65 years old, and upon discretion of management, shall
be qualified or subject to compulsory retirement from the company with benefits
as provided in this plan.” Thus, when petitioners
discovered the loss of vital books of account while in private respondent’s
custody and found him
“guilty of breach of trust as chief accountant”, they claim to have a
valid ground to terminate private respondent’s services and as a consequence to deny his claim for
retirement pay.^[7]

It must be stressed that the words “upon the discretion of
management” are not synonymous with absolute or unlimited discretion. In
other words, management discretion may not be exercised arbitrarily or
capriciously especially with regards to the implementation of the retirement
plan.  We believe that upon acceptance of
employment, a contractual relationship was established giving private
respondent an enforceable vested interest in the retirement fund.  Verily,
the retirement scheme became an integral part of his employment package
and the benefits to be derived therefrom constituted
as it were a continuing consideration for services rendered, as well as an
effective inducement for remaining with the firm.^[8]

Having rendered twenty years of service with Metroport
Services, Inc., it can be said that
private respondent has already acquired a vested right to the retirement fund,
a right which can only be withheld upon a clear showing of good and compelling
reasons.

In the case at bar, petitioners’ rejection of the subject claim
cannot be justifiably sustained.  The
reported loss of confidence was due to the disappearance of certain books of
account which petitioners directly attributed to private respondent.  Petitioners were convinced that simply
because private respondent could not produce the needed books on demand, he was
no longer worthy of their trust and confidence. 
They abruptly dismissed him without giving him a chance to explain his
side.  In short, there was not the
slightest pretense at fair play. Had petitioners been less hasty and conducted
an investigation, they would have found out
that on November 30, 1982, a
fire gutted the western portion of petitioners’ warehouse in front of Pier 5,
destroying records, books, vouchers and general ledgers.  The circumstances surrounding the fire were
duly investigated and reported to the
Commissioner of Internal Revenue.  But
whatever documents might have been salvaged from that conflagration were
subsequently lost during the flood on July
25, 1985.^[9]

Thus, the resulting dismissal of private respondent was in itself marked by arbitrariness
and lack of due process.  Petitioners cannot now be allowed to use that
as their legal excuse for
denying the employee’s legitimate claim for
retirement pay.

In further support of their refusal to give private respondent
his retirement benefits,
petitioners argued that the discharged employee impliedly withdrew his
intention to retire when he
joined Marina Port Services, Inc.^[10]

The fact that private respondent sought employment elsewhere
should not hinder him from claiming his retirement benefits.  It is an inexorable fact that at 65 years, he
reached the Mandatory age for retirement and, therefore, qualified to
retire.  We have here an ironic situation
where instead of enjoying the fruits of his retirement, private respondent was
forced to seek reemployment for his survival. 
Surely, private respondent does not deserve such a pathetic end to his
long and faithful service with petitioners.

As to the issue of whether petitioner Enrique Razon,
Jr. in his capacity as president
and majority stockholder should be held
solidarily liable with co-petitioner Metroport Services, Inc. for the payment of the disputed
retirement claim, we rule in the
affirmative.

Under Sec. 31 of the Corporation Code, “directors or
trustees who willfully and knowingly vote
for or assent to patently unlawful
acts of the corporation or who are guilty of gross negligence or bad faith in
directing the affairs of the corporation x x x shall be liable jointly and severally for all damages
resulting therefrom suffered by the corporation, its
Stockholders or members or other persons.” 
The manner of dismissal of private respondent by petitioner Enrique Razon, Jr. smacks of high-handedness, caprice and
arbitrariness.  No regard was given to
private respondent’s long and faithful service to the corporation, nor
opportunity afforded him to explain the loss imputed to him through a
properly-conducted investigation.  The
willingness and alacrity on the part of petitioner Enrique Razon,
Jr. to terminate the services of private respondent without taking into
consideration private respondent’s service to the company and without affording
him his right to due process, to our mind, suffice to taint the act complained
of with bad faith.

 WHEREFORE, the
assailed resolution of the National Labor Relations Commission dated August 20, 1987 is hereby AFFIRMED in
toto.  Costs
against petitioners.

SO ORDERED.

 Gutierrez, Jr.,
Feliciano, Bidin, and
Cortes, JJ., concur.

^[1]
Rollo, p. 43.

^[2]
Ibid.

^[3]
Rollo, p. 27.

^[4]
Rollo, pp. 43-44.

^[5]
Rollo, p. 32.

^[6]
Rollo, p. 42.

^[7]
Rollo, pp. 10 & 24; underscoring supplied.

^[8]
See:  Wilson v. Rudolph Wurlitzer, 194
NE 441.

^[9]
Rollo, pp. 28-30.

^[10]
Rollo, p. 5.