THIRD DIVISION
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NASECO GUARDS ASSOCIATION-PEMA
(NAGA-PEMA), Petitioner, - versus - NATIONAL SERVICE CORPORATION
(NASECO), Respondent. |
G.R.
No. 165442 Present: CARPIO
MORALES, J., Chairperson, BRION, BERSAMIN,
VILLARAMA,
JR., and SERENO, JJ. Promulgated: August
25, 2010 |
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DECISION
VILLARAMA, JR., J.:
This petition
for review on certiorari under Rule
45 assails the Decision[1] dated
The facts
follow.
Respondent National
Service Corporation (NASECO) is a wholly-owned subsidiary of the Philippine
National Bank (PNB) organized under the Corporation Code in 1975. It supplies security and manpower services to
different clients such as the Securities and Exchange Commission, the
Philippine Deposit Insurance Corporation, Food Terminal Incorporated, Forex
Corporation and PNB. Petitioner NASECO
Guards Association-PEMA (NAGA-PEMA) is the collective bargaining representative
of the regular rank and file security guards of respondent. NASECO Employees Union-PEMA (NEMU-PEMA) is
the collective bargaining representative of the regular rank and file
(non-security) employees of respondent such as messengers, janitors, typists,
clerks and radio-telephone operators.[4]
On
On
On
Meanwhile,
respondent and NEMU-PEMA entered into a CBA on non-economic terms.[9] Unfortunately, a dispute among the leaders of
NEMU-PEMA arose and at a certain point, leadership of the organization was
unclear. Hence, the negotiations
concerning the economic terms of the CBA were put on hold until the internal
dispute could be resolved.
On
On
Respondent
promptly filed a petition for certiorari
before the CA questioning the DOLE Secretary’s order and arguing that the
ruling of the DOLE Secretary in favor of the unions and awarding them monetary
benefits totaling five hundred thirty-one million four hundred forty-six
thousand six hundred sixty-six and 67/100 (P531,446,666.67) was inimical
and deleterious to its financial standing and will result in closure and
cessation of business for the company.
By Decision[15]
dated
WHEREFORE, the instant petition is partly GRANTED in that the case is remanded to the Secretary of Labor for purposes of recomputation and reevaluation of the CBA benefits.
SO ORDERED.[16]
In
compliance with the CA directive, then DOLE Secretary Patricia A. Sto. Tomas conducted
several clarificatory hearings. On
From the above, it is indubitable
that the total cost to NASECO of our questioned award would amount to only P322,725,000,
not P531,446,666.67 as claimed by the company. Thus, our
WHEREFORE, judgment is hereby rendered:
1. [D]irecting NAGA-PEMA and NASECO to execute a new collective bargaining agreement effective November 1, 1993, incorporating therein the dispositions contained in our November 19, 1999 Order as well as all other items agreed upon by the parties.
2. Ordering NASECO to negotiate with NEMA-PEMA for a new collective bargaining agreement.
The charges of unfair labor practice against NASECO and PNB are dismissed for lack of merit.
SO ORDERED.[17]
Respondent
filed a motion for reconsideration with the DOLE Secretary which was denied on
Respondent
thus filed a petition for certiorari
with the CA arguing that the DOLE Secretary, in issuing the January 15, 2003 Order
deprived respondent of due process of law for there was no reevaluation that took place in the DOLE. It also argued that the order merely
recomputed the DOLE Secretary’s initial award of P531,446,666.67 and
reduced it to P322,725,000.00, contrary to the ruling of the CA to
recompute and reevaluate. Respondent claimed that what the DOLE Secretary
should have done was to let the parties introduce evidence to show the proper
computation of the monetary awards under the approved CBA.
In its second
Decision dated
WHEREFORE,
the orders dated
SO ORDERED.[18]
A motion
for reconsideration was filed by herein petitioner but the same was denied by
the CA on
Petitioner now
comes to this Court for relief by way of a petition for review on certiorari seeking to set aside and
reverse the May 27, 2004 Decision and the
The main issue in this case is whether
or not the respondent’s right to due process was violated. A side issue raised by the petitioner is
whether or not PNB, being the undisputed owner of and exercising control over respondent,
should be made liable to pay the CBA benefits awarded to the petitioner.
Petitioner
argues first that there was no violation of due process because respondent was
never prohibited by the DOLE Secretary to submit supporting documents when the
instant case was pending on remand.
Petitioner contends that due process is properly observed when there is
an opportunity to be heard, to present evidence and to file pleadings, which
was never denied to respondent.
Second,
petitioner argues that the CA erred in stating that respondent was a company
operating at a loss and therefore cannot be expected to act generously and
confer upon its employees additional benefits exceeding what is mandated by
law. It is the petitioner’s position
that based on the “no loss, no profit” policy of respondent with PNB,
respondent in truth has no “pocket” of its own and is, in effect, one (1) and
the same with PNB with regard to financial gains and/or liabilities. Thus, petitioners contend that the CBA
benefits should be shouldered by PNB considering the poor financial condition
of respondent. To support such claim, petitioner submitted evidence[20] to show that PNB is in superb
financial condition and is very much capable of shouldering the CBA award.[21]
Respondent on the other hand maintains that the DOLE Secretary
violated its right to due process when she merely recomputed the CBA award
instead of reevaluating the entire
case and allowing it to present supporting documents in accordance with the
first CA decision.[22] It
claims that the order of the CA to reevaluate included and required a full
assessment of the case together with reception of evidence such as financial
statements, and the omission of such is a violation of its right to due
process.
As to
the petitioner’s argument that respondent and PNB are essentially the same when
it comes to financial condition, respondent contends that although a
subsidiary, it has a separate and distinct personality from PNB with its own
charter. Hence, the issue of PNB’s
financial well-being is immaterial in this case.
The
petition is partly meritorious.
In
simple terms, the constitutional guarantee of due process requires that a
litigant be given “a day in court.” It
is the availability of the opportunity to be heard that determines whether or
not due process was violated. A litigant
may or may not avail of the opportunity to be heard but as long as such was
made available to him/her, there is no violation of the due process
clause. In the case of Lumiqued v. Exevea,[23]
this Court declared that “[a]s long as a party was given the opportunity to
defend his interests in due course, he cannot be said to have been denied due
process of law, for this opportunity to be heard is the very essence of due
process. Moreover, this constitutional
mandate is deemed satisfied if a person is granted an opportunity to seek
reconsideration of the action or ruling complained of.”
The
respondent’s right to due process in this case has not been denied. The order in the first CA decision to recompute
and reevaluate was satisfied when the DOLE Secretary reexamined their initial
findings and adjusted the awarded benefits.
A reevaluation, contrary to what the respondent claims, is a process by
which a person or office (in this case the DOLE secretary) revisits its own
initial pronouncement and makes another assessment of its findings. In simple terms, to reevaluate is to take another look at a previous
matter in issue. A reevaluation does not
necessitate the introduction of new materials for review nor does it require a
full hearing for new arguments.
From a
procedural standpoint, a reevaluation is a continuation
of the original case and not a new proceeding. Hence, the evidence, financial reports and
other documents submitted by the parties in the course of the original
proceeding are to be visited and reviewed again. In this light, the respondent
has been given the opportunity to be heard by the DOLE Secretary.
Also,
contrary to the claim of the respondent that it was barred by the DOLE Secretary
to introduce supporting documents during the recomputation and reevaluation, the
records show that an Order by then Secretary of Labor Patricia A. Sto. Tomas
dated
WHEREFORE,
the Bureau of Working Conditions is hereby directed to submit to this Office a
detailed computation of the CBA benefits indicated in the resolution of
SO ORDERED.[24] (Italics supplied.)
It is thus inaccurate for the respondent to claim that it was denied due
process because it had all the opportunity to introduce any supporting document
in the course of the recomputation and reevaluation of the DOLE Secretary. Respondent admits that it did attach the
financial statements and other documents in support of its alleged financial
incapacity to pay the CBA awarded benefits, the same evidence it had earlier
submitted before the CA (Memorandum in the first CA decision) in the motion for
reconsideration of the DOLE Secretary’s January 15, 2003 Order.[25]
There is thus no showing that the DOLE Secretary
denied respondent this basic constitutional right.
On the
issue of liability, petitioner contends that PNB should be held liable to
shoulder the CBA benefits awarded to them by virtue of it being a company
having full financial, managerial and functional control over respondent as its
subsidiary, and by reason of the unique “no loss, no profit” scheme implemented
between respondent and PNB.
We are
not persuaded.
Verily,
what the petitioner is asking this Court to do is to pierce the veil of corporate
fiction of respondent and hold PNB (being the mother company) liable for the
CBA benefits.
In Concept Builders, Inc. v. NLRC,[26]
we explained the doctrine of piercing the corporate veil, as follows:
It is a fundamental principle of corporation law
that a corporation is an entity separate and distinct from its stockholders and
from other corporations to which it may be connected. But, this separate and
distinct personality of a corporation is merely a fiction created by law for
convenience and to promote justice. So, when the notion of separate
juridical personality is used to defeat public convenience, justify wrong,
protect fraud or defend crime, or is used as a device to defeat the labor laws,
this separate personality of the corporation may be disregarded or the veil of
corporate fiction pierced. This is true likewise when the corporation is merely
an adjunct, a business conduit or an alter ego of another corporation.
Also
in Pantranco Employees Association (PEA-PTGWO)
v. National Labor Relations Commission,[27]
this Court ruled:
Whether
the separate personality of the corporation should be pierced hinges on
obtaining facts appropriately pleaded or proved. However, any piercing of the
corporate veil has to be done with caution, albeit the Court will not hesitate
to disregard the corporate veil when it is misused or when necessary in the
interest of justice. After all, the concept of corporate entity was not meant
to promote unfair objectives.
Applying the
doctrine to the case at bar, we find no reason to pierce the corporate veil of respondent
and go beyond its legal personality. Control,
by itself, does not mean that the controlled corporation is a mere
instrumentality or a business conduit of the mother company. Even control over
the financial and operational concerns of a subsidiary company does not by itself
call for disregarding its corporate fiction. There must be a perpetuation of
fraud behind the control or at least a fraudulent or illegal purpose behind the
control in order to justify piercing the veil of corporate fiction. Such fraudulent intent is lacking in this
case.
Petitioner argues that the appreciation, analysis and
inquiry of this case may go beyond the presentation of respondent, and
therefore must include the PNB, the bank being the undisputed whole owner of respondent
and the sole provider of funds for the company’s operations and for the payment
of wages and benefits of the employees, under the “no loss, no profit” scheme.[28]
We
disagree. There is no showing that such
“no loss, no profit” scheme between respondent and PNB was implemented to
defeat public convenience, justify wrong, protect fraud or defend crime, or is
used as a device to defeat the labor laws, nor does the scheme show that respondent
is a mere business conduit or alter ego of PNB.
Absent proof of these circumstances, respondent’s corporate personality
cannot be pierced.
It is
apparent that petitioner wants the Court to disregard the corporate personality
of respondent and directly go after PNB in order for it to collect the CBA
benefits. On the same breath, however, petitioner
argues that ultimately it is PNB, by virtue of the “no loss, no profit” scheme,
which shoulders and provides the funds for financial liabilities of respondent
including wages and benefits of employees. If such scheme was indeed true as the
petitioner presents it, then there was absolutely no need to pierce the veil of
corporate fiction of respondent. Moreover,
the Court notes the pendency of a separate suit for absorption or
regularization of NASECO employees filed by petitioner and NEMU-PEMA against
PNB and respondent, docketed as NLRC NCR Case No. 06-03944-96), which is still
on appeal with the National Labor Relations Commission (NLRC), as per
manifestation by respondent. In the said
case, petitioner submitted for resolution by the labor tribunal the issues of
whether PNB is the employer of NASECO’s work force and whether NASECO is a
labor-only contractor.[29]
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated
No
costs.
SO ORDERED.
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MARTIN S. VILLARAMA, JR. Associate Justice |
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WE
CONCUR: CONCHITA CARPIO MORALES Associate Justice Chairperson |
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ARTURO D.
BRION Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
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MARIA Associate Justice |
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A T T E S T A T I O N
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
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CONCHITA CARPIO MORALES Associate Justice Chairperson, Third
Division |
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the 1987 Constitution and the Division Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
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RENATO C. CORONA Chief Justice |
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[1] Rollo, pp. 27-39. Penned by Associate Justice Buenaventura J. Guerrero, with Associate Justices Mariano C. Del Castillo (now a member of this Court) and Amelita G. Tolentino concurring.
[2] CA rollo, pp. 30-31.
[3]
[4] Records, Vol. I, p. 459; records, Vol. II, p. 817.
[5]
[6] An Act Prescribing a Revised Compensation and Position Classification System in the Government and for other Purposes.
[7] An Act to Rationalize Wage
Policy Determination by Establishing the Mechanism and Proper Standards
Therefor, Amending for the Purpose Article 99 of, and Incorporating Articles
120, 121, 122, 123, 124, 126 and 127 into, Presidential Decree No. 442, as amended, Otherwise Known as
the Labor Code of the Philippines, Fixing New Wage Rates, Providing Wage
Incentives for Industrial Dispersal to the Countryside, and for other Purposes.
[8] Records, Vol. I, pp. 117-128; CA rollo, p. 183.
[9]
[10]
[11] Presidential Decree No. 442, as amended.
[12] Records, Vol. I, p. 17.
[13] CA rollo, pp. 180-194.
[14]
[15] Rollo, pp. 58-63.
[16]
[17] CA rollo, p. 31.
[18] Rollo, p. 39.
[19]
[20] CA rollo, pp. 542-575.
[21] Rollo, pp. 14-16.
[22]
[23] G.R. No. 117565,
[24] Records, Vol. I, p. 553.
[25] See CA rollo, pp. 37-38.
[26] G.R. No. 108734,
[27] G.R. Nos.
170689 & 170705,
[28] Rollo, p. 15.
[29]