NAGUIAT V NLRC 2. WON NOWM has authority to represent RESP?
PET ESTOPPED (not seasonably
MAR 13 1997 | PANGANIBAN, J
CFTI – Clark Field Taxi Inc Antolin Naguiat – CFTI’s VP
AAFES – Army Air Force Exchange UNION – AAFES Taxi Drivers Association
Services NOWM – National Organization of Workingmen
Sergio Naguiat – CFTI’s President
FACTS: CFTI held a concessionaire’s contract with AAFES for the operation of taxi
services within Clark Air Base.
 RESPONDENTS were previously employed by CFTI as taxicab drivers
o Earned not less than US$15 daily; required to make cash deposits to the
company which they could withdraw every 15 days
 Due to phase out of US military bases in PH, AAFES was dissolved, services of
RESP were officially terminated
o UNION, through Pres. Castillo, and CFTI held negotiations re: separation
benefits; AGREEMENT: P500/year of service = severance pay [most
accepted – RESP refused to accept; disaffiliated with UNION]
RESP through NOWM filed complaint against PET for payment of separation pay due
to termination/phase-out [amended to include addt’l taxi drivers; and CFTI with Antolin
as VP and GM as party respondent]
 RESP: Alleged they were regular employees of Naguiat Enterprises (NE) although
individual applications for employment were approvedby CFTI – assigned to NE
after having been hired by CFTI and NE managed, controlled and supervised their
employment [entitled to separation pay based on latest daily earnings of
US$15 for working 16 days a month]
 PET: Cessation of business of CFTI – due to great financial losses and lost
business opportunity (phase out – Mt. Pinatubo eruption and expiration of RP-US
military base agreement)
o CFTI agreed with UNION through Pres. Castillo who claimed to have had
blanket authority to negotiate with CFTI in behalf of members, to grant its taxi
driver-employees separation pay equivalent to P500/yr of service
LA: Regular workers of CFTI; CFTI to pay P1,200 for every year of service for
humanitarian consideration, setting aside the earlier agreement between CFTI &
UNION (HUMANITARIAN = inhuman to complainants if not awarded; but unfair to ER
if impose monetary obligation whose profitable business was abruptly shot down by
force majeure)
 Rejected allegations of CFTI that it was forced to close business due to financial
losses and lost business opportunities since at the time it ceased operations, CFTI
was profitably earning and cessation was due to untimely closure of Clark Air Base
NLRC: LA modified – granted separation pay = (not in legal tender; exchange rate at
time of payment should be used – choice left to RESP, they may choose to pay in US$
 Sergio and Antolin should be joined as indispensable party whose liability is joint
and several
ISSUES:
1. WON NRLC erred in granting RESP their separation pay? NO
Art 283 LC – retrenchment to prevent losses and in cases of closures or cessation of operations
not due to serious business losses or financial reverses
 Separation pay shall be 1 month pay or at least ½ month pay for every year of service
whichever is higher
 ITC, $120 (1/2 of $240 monthly pay) or its peso equivalent for every year of service
raised)
3. WON NE, CFTI, Sergio and Antolin shall be held liable?
NE NOT LIABLE [BECAUSE CFTI = DIRECT EMPLOYER]
RESP: Art 106, 107, 109 LC (indirect employer, labor only contracting)
HOWEVER, LA: RESP were regular employees of CFTI who received wages on a
boundary or commission basis
COURT: NOT LABOR-ONLY CONTRACTING
 ITC, no substantial basis to hold NE as indirect employer of RESP much less labor-
only contractor
 PET submitted documents such as drivers’ applications for employment with CFTI,
Social Security Remittances and payroll of NE showing none of RESP were its
employees
 In contract bet CFTI & AAFES, CFTI as concessionaire agreed to purchase from
AAFES for a certain amount within a specified period a fleet of vehicles to be kept
on the road by CFTI pursuant to their concessionaire contract = CFTI became
owner of taxicabs which became principal investment and asset of company
 RESP could not deny that he received his salary from office of CFTI inside the
base; NE was trading business while CFTI was in taxi services
 In constitution of UNION, it states that members are employees of CFTI and ER is
CFTI
CFTI PRES SERGIO SOLIDARILY LIABLE FOR CORPORATE TORT
AC RANSOM V NLRC – Imposed joint and several liability upon company president –
Art 265 and 273 LC implemented through Art 212 LC
ITC, SERGIO was the President of CFTI who actively managed the business – falls
within meaning of “ER” who may be held jointly and severally liable for obligations of
the corporation to its dismissed EEs
 NE & CFTI = close family corporaitons owned by Naguiat family (Sec 100 par 5
Corporaiton Code = stockholders personally laible for corporate torts)
RE: CORPORATE TORT
Tort – violation of a right given or the omission of a duty imposed by law; breach of
legal duty
 ITC, CFTI failed to comply with this law-imposed duty or obligation (Art 283 LC);
its stockholder who was actively engaged in the management of the operation of
the business should be held personally liable
 MAM REALTY DEVELOPMENT V NLRC – Director or officer may still be held
solidary liable with a corporation by specific provisions of law
 In posting surety bond required for TRO, only Sergio in his individual and personal
capacity principally bound himself
ANTOLIN NOT PERSONALLY LIABLE
Although he was VP and carried “GM” – not shown that he acted in such capacity; no
evidence of extent of participation in management or operation of business
WHEREFORE, PETITION PARTLY GRANTED. MODIFIED – CFTI & SERGIO TO
PAY (jointly and severally) RESP their separation pay computed at US$120 for every
year of service or its peso equivalent at time of payment; NE & ANTOLIN ABSOLVED
from liability