84 workers of the Philippine Inter-Fashion (PIF) filed a complaint against the latter for illegal transfer simultaneous with illegal dismissal in violation of the Labor Code. PIF was notified about the complaint and summons but hearings were continually re-set for failure of its officers (petitioners herein) to appear. Complainant workers thus moved to implead petitioners as officers of PIF in the complaint for their illegal transfer to a new firm. The Labor Arbiter ruled in favor of workers holding petitioners-officers jointly and severally liable with PIF to pay them their benefits. Petitioners’ appeal was dismissed.
Whether or not petitioners as officers may be held jointly and severally liable with the corporation for its liability.
The settled rule is that the corporation is vested by law with a personality separate and distinct from the persons composing it, including its officers as well as from that of any other legal entity to which it may be related. Thus, a company manager acting in good faith within the scope of his authority in terminating the services of certain employees cannot be held personally liable for damages. However, the legal fiction that a corporation has a personality separate and distinct from stockholders and members may be disregarded when the notion of legal entity is used as a means to perpetrate fraud or an illegal act or as a vehicle for the evasion of an existing obligation, the circumvention of statutes, and or (to) confuse legitimate issues the veil which protects the corporation will be lifted.
In this particular case complainants did not allege or show that petitioners, as officers of the corporation deliberately and maliciously designed to evade the financial obligation of the corporation to its employees, or used the transfer of the employees as a means to perpetrate an illegal act or as a vehicle for the evasion of existing obligations, the circumvention of statutes, or to confuse the legitimate issues.
Not one of the above circumstances has been shown to be present. Hence petitioners cannot be held jointly and severally liable with the PIF corporation under the questioned decision and resolution of the public respondent.