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SECOND DIVISION

November 8, 2017

G.R. No. 202613

SYMEX SECURITY SERVICES, INC. and RAFAEL Y. ARCEGA, Petitioners

vs.
MAGDALINO O. RIVERA, JR. and ROBERTO B. YAGO, Respondents

DECISION

CAGUIOA, J.:

Assailed in this petition for review on certiorari1 are the Decision2 dated January 12, 2012 and the Resolution3 dated
June 27, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 119039, which affirmed the Decision4 dated
December 9, 2010 and Resolution5 dated February 7, 2011 of the National Labor Relations Commission (NLRC) in
NLRC LAC No. 042778- 05 (RA-06-10) that, in turn, reversed the Decision6 dated April 30, 2010 of the Labor Arbiter
(LA) in NCR-02-02569-03 which dismissed the complaint for illegal dismissal filed by respondents Magdalino O.
Rivera, Jr. and Roberto B. Yago (respondents) against petitioners Symex Security Services, Inc. (petitioner Symex)
and Rafael Y. Arcega (petitioner Arcega), and ordered petitioners to pay respondents in the amount of ₱l,543.75
each or a total of ₱3,087.50.

Facts
7
The instant case stemmed from a complaint for underpayment/nonpayment of wages, overtime pay, holiday pay,
premium for rest day, service incentive leave pay, clothing allowance and 13th month pay as well as illegal
deduction of cash bond and firearm bond and repair filed by respondents before the LA.

Respondents alleged that they had been employed as security guards by petitioner Symex sometime in May 1999.
Petitioner Symex is engaged in the business of investigation and security services. Its President and Chairman of
the Board is petitioner Arcega.8

Respondents were both assigned at the offices and premises of Guevent Industrial Development Corporation
(Guevent), a client of petitioner Symex. As security guards, they were tasked to guard the entrance and the exit of
the building, and check the ingress and egress of the visitors' vehicles going through the building. Their tour of duty
was from Monday to Saturday, from 6:00 AM to 6:00 PM, a twelve-hour duty, but they were not paid their overtime
pay. Respondents were likewise not given a rest day, and not paid their five-day service incentive leave pay, and
13th month pay.9

At the time of their employment, respondents were receiving a salary of ₱198.00 a day from January 20 to March
2001. From April 2001 to March 2003, they were receiving ₱250.00 a day. They were required to report for work
during legal holidays, but they were not paid holiday premium pay.10

On February 25, 2003, respondents filed a complaint for nonpayment of holiday pay, premium for rest day, 13th
month pay, illegal deductions and damages.11

On March 13, 2003, Capt. Arcega Cura (Capt. Cura), the Operations Manager of petitioner Symex, summoned
respondents to report to the head office the next day.12

The following day or on March 14, 2003, respondents went to the head office where Capt. Cura told them that they
would be relieved from the post because Guevent reduced the number of guards on duty. Capt. Cura told them to
go back on March 17, 2003 for their reassignment.13

On March 17, 2003, Capt. Cura told respondents that they would not be given a duty assignment unless they
withdrew the complaint they filed before the LA. Respondents were made to choose between resignation or forcible
leave. Capt. Cura gave them a sample affidavit of desistance for them to use as a guide. Respondents both refused
to obey Capt. Cura, who then told them that they were dismissed.14

The next day or on March 18, 2003, respondents amended their complaint15 before the LA to include illegal
dismissal.16

In their defense, petitioners Symex and Arcega maintained that they did not illegally dismiss respondents. They
claimed that respondents are still included in petitioner Symex's roll of security guards. They shifted the blame to
respondents, arguing that respondents refused to accept available postings.17

The LA Ruling
18
In a Decision dated April 30, 2010, the LA dismissed respondents' amended complaint for illegal dismissal but
ordered petitioner Symex to pay respondents' their proportionate 13th month pay, viz.:

Rates: ₱198/day (1/20/01 – 3/31/01) Dismissed 3/14/03

₱250/day (4/1/01 - 3/31/03) =
A. MAGDALINO 0. RIVERA, JR.
PROP. 13th MO. PAY:
1/1/03-3/14/03
₱250 x 30 x 2.4 7/12 = ₱l,543.75
B. ROBERTO B. YAGO ₱l,543.75
PROP. 13th MO. PAY:
 1/1/03-3/14/03
₱250 x 30 x 2.4 7/12 =
SUMMARY OF COMPUTATION:
A. MAGDALINO O. RIVERA, JR. ₱l,543.75
B. ROBERTOB. YAGO 1,543.75

TOTAL AWARD: ₱3,087.5019

The LA found that respondents were merely relieved from their post by Capt. Cura. According to the LA, a relief
order in itself does not sever the employment relationship between a security guard and the agency. Further, the LA
did not give credence to the purported handwritten Affidavit of Desistance supposedly given to respondents by Capt.
Cura because such affidavit offered no assurance of its authenticity as it was unsigned and at best, self-serving.20

The LA also ruled that the pay slips presented by respondents themselves showed that they were not underpaid.
Respondents have also failed to prove that they rendered overtime work or that they worked on a holiday/rest day.
Respondents also failed to show proof that they were entitled to their claims for service incentive leave pay and for
illegal deductions. The LA also ruled that there were no qualifying circumstances in the instant case to warrant the
grant of damages.21

Aggrieved, respondents appealed to the NLRC.

The NLRC Ruling

22
In a Decision dated December 9, 2010, the NLRC reversed and set aside the LA ruling, viz.:

WHEREFORE, the foregoing premises considered, the decision of the Labor Arbiter is hereby
REVERSED and SET ASIDE, a new one entered declaring complainants illegally dismissed by
Respondents who are hereby ORDERED to pay complainants the following, as per attached
computation:

Magdalino O. Rivera Roberto B. Yago

1. Separation pay -₱133,320.00 145,440.00
2. Full backwages -1,017,522.21 1,017,522.21
3. Underpaid wages -18,713.47 17,882.59
4. Underpaid service
incentive leave pay -209.91 248.37
5. Underpaid 13th month
pay -1,559.46 1,490.22
6. Moral damages -10,000.00 10,000.00
7. Exemplary damages -10,000.00 10,000.00
Sub-total -₱1,191,375.05 ₱1,202,583.39
8. 10% attorney's fees 119,137.50 120,258.34
TOTAL -₱1,310,512.55 ₱1,322,841.72

Other claims are however dismissed for lack of basis.

SO ORDERED.23

Contrary to the LA's findings, the NLRC found that respondents were illegally dismissed by Capt. Cura, the
Operations Manager of petitioner Symex, who told them that unless they withdrew their complaint for money claims
pending before the LA, their services would be terminated. It held that the burden of proving that the dismissal of an
employee was for a valid or authorized cause lies on the employer, and that failure to discharge this burden of proof
makes the employer liable for illegal dismissal. The NLRC found that petitioners failed to prove, with substantial
evidence, that respondents were furnished with a written order of detail or re-assignment. It added that neither were
respondents guilty of abandonment of work as they immediately amended their complaint for money claims to
include a complaint for illegal dismissal. The NLRC relied on A'Prime Security Services, Inc. v. NLRC24 which held
that abandonment of work is inconsistent with the filing of a complaint for illegal dismissal.25

Accordingly, the NLRC held that respondents are entitled to separation pay at one month per year of service from
the time of their employment up to the finality of the decision with backwages and monetary claims, subject to the
three-year prescriptive period. It also awarded respondents ten thousand pesos (₱l0,000.00) each as moral
damages and exemplary damages in the same amount, plus ten percent (10%) of the total monetary award as
attorney's fees.26

Petitioners moved for reconsideration, but this was denied in a Resolution27 dated February 7, 2011. Dissatisfied,
they filed a petition for certiorari28 before the CA.

The CA Ruling
29
In a Decision dated January 12, 2012, the CA affirmed the questioned NLRC Decision.

It held that the NLRC did not gravely abuse its discretion as the undisputed facts clearly established respondents to
have been illegally dismissed and that petitioners used their prerogative to reassign and post security guards,
merely as leverage to cause the withdrawal of the labor complaint filed against them by respondents.30

The CA likewise found that the NLRC sufficiently ruled on respondents' money claims. It ruled that once the
employee has set out with particularity in his complaint, position paper, affidavits and other documents the labor
standard benefits he is entitled to, and which the employer allegedly failed to pay him, it becomes the employer's
burden to prove that it has paid these money claims. One who pleads payment has the burden of proving it; and
even where the employees must allege nonpayment, the general rule is that the burden rests on the defendant to
prove payment, rather than on the plaintiff to prove nonpayment.31

The CA also affirmed the award for moral and exemplary damages as well as attorney's fees.32

Petitioners filed a motion for reconsideration33 dated February 9, 2012, which was, however, denied in a
Resolution34 dated June 27, 2012.

The Issues Before the Court

The issues for the Court's resolution are whether or not: (a) the CA correctly ruled that the NLRC did not gravely
abuse its discretion, and consequently, held that respondents were illegally dismissed; (b) petitioners are liable to
respondents for backwages, service incentive leave pay, 13th month pay, separation pay, moral damages,
exemplary damages and attorney's fees; and (c) petitioner Arcega should be held solidarily liable with petitioner
Symex for respondents' monetary awards.

The Court's Ruling

The petition is without merit.

NLRC did not commit grave abuse of

discretion.

"To justify the grant of the extraordinary remedy of certiorari, the petitioner must satisfactorily show that the court or
quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion connotes a
capricious and whimsical exercise of judgment, done in a despotic manner by reason of passion or personal
hostility, the character of which being so patent and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act at all in contemplation of law."35

"In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
conclusions are not supported by substantial evidence, or that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion."36

Guided by the foregoing considerations, the Court finds that the CA correctly found no grave abuse of discretion on
the part of the NLRC in reversing the LA ruling, as the LA's finding that respondents were not illegally dismissed
from employment is not supported by substantial evidence.

A judicious review of the records of the case reveals that respondents were dismissed by Capt. Cura, the
Operations Manager of petitioner Symex. Even as the Court has acknowledged the management prerogative of
security agencies to transfer security guards when necessary in conducting its business, it likewise has repeatedly
held that this should be done in good faith.37

In the case of Exocet Security and Allied Services Corporation v. Serrano,38 the Court ruled that the security agency
was able to prove that it was in good faith when it placed the security guard on floating status and was therefore not
guilty of illegal dismissal nor constructive dismissal. The evidence presented by the security agency showed that the
security guard's own refusal to accept a non-VIP detail was the reason that he was not given an assignment within
the six-month period. The Court, in the subject case, ruled that it was manifestly unfair and unacceptable to
immediately declare the mere lapse of the six-month period of floating status as a case of constructive dismissal,
without looking into the peculiar circumstances that resulted in the security guard's failure to assume another post.39
The Court emphasized that:

[T]he security guard's right to security of tenure does not give him a vested right to the position as
would deprive the company of its prerogative to change the assignment of, or transfer the security
guard to, a station where his services would be most beneficial to the client. Indeed, an employer has
the right to transfer or assign its employees from one office or area of operation to another, or in pursuit
of its legitimate business interest, provided there is no demotion in rank or diminution of salary,
benefits, and other privileges, and the transfer is not motivated by discrimination or bad faith, or
effected as a form of punishment or demotion without sufficient cause.40

In the controversy now before this Court, there is no question that respondents were placed on floating status after
their relief from their post in Guevent. The crux of the controversy lies in whether or not this floating status was
actually a dismissal.

Respondents were illegally dismissed.

Petitioner Symex insists that Capt. Cura did not constructively dismiss respondents, explaining that they refused to
accept their new assignments on the ground that their new postings would be inconvenient to them.41 Respondents,
on the other hand, maintain that they did not refuse reassignment nor did they abandon their work.42 The narration
of respondents is enlightening:

Noon February 26, 2003 nagkaisa kami na iparating na sa Labor para makuha naming [ ang aming]
mga benepisyo na dapat mapasamin. At noong March 13, 2003 tumawag si Captain Cura (Operation
Ma[n]ager ng SYMEX SCTY. SVCS.) na magreport daw kaming dalawa sa SYMEX OFFICE,
kinabukasan March 14, 2003, mga 9:00 A.M. dumating kami sa SYMEX OFFICE, binigyan kami ng
order na inaalis daw kami sa kliyente dahil nagbawas [daw ng] gwardiya doon at nagtaka kami dahil
marami nam[a]ng baguhan pa doon pero kami talaga ang tinanggal na matagal na at sinabi sa amin na
magreport kami sa lunes March 17, 2003 para sa panibagong duty daw sa ibang kliyente.

Noong March 17, 2003 dumating kami sa SYMEX OFFICE band[a]ng 9:00 A.M. at ito ang sinabi sa
amin na hindi daw kami pwedeng bigyan ng duty dahil idinamay daw [ namin] ang agency at hindi daw
kami pwedeng magtrabaho sa agency habang hindi pa naaayos ang kaso. At sa panahon pala na iyon
natanggap na nila ang demanda [namin] [galing] sa Labor at doon kami inutusan ni Capt. Cura na
kumuha daw kami ng Affidavit of Desistance at saka ibabalik daw kami sa duty at sa katunayan
binigyan pa kami ng sample kung paano kumuha ng affidavit of desistance, at kung hindi daw kami
kumuha ng nasabing affidavit magleave na lang daw kami o m[a]gresign at bago kami umalis sa
opisina ng SYMEX humingi kami ng pabor na mag log man lang kami para sa aming attendance sa
araw na iyon. Pero tumanggi si Kapitan Cura na magsulat kami sa Log book nya. Tapos kinausap din [
namin] ang kasama nya sa opisina na si Y olly Ansus na mag-log kami para sa aming attendance, siya
ay tumanggi at sabi niya ay baka daw magalit si Capt. Cura. At kinabukasan March 18, 2003 pumunta
kami sa NLRC para amendahan [ang aming] demanda laban sa SYMEX at idinagdag [namin] ang
Illegal Dismisal (actual) at noong April 3, 2003 sa araw ng Hearing [ namin], natanggap ni Capt. Cura
ang amended complaint [namin].43

In cases of illegal dismissal, the employees must first establish by substantial evidence that they were dismissed. If
there is no dismissal, then there can be no question as to the legality or illegality thereof.44 In Machica v. Roosevelt
Sendces Center, lnc.,45 the Court enunciated:

The rule is that one who alleges a fact has the burden of proving it; thus, petitioners were burdened to
prove their allegation that respondents dismissed them from their employment. It must be stressed that
the evidence to prove this fact must be clear, positive and convincing. The rule that the employer bears
the burden of proof in illegal dismissal cases finds no application here because the respondents deny
having dismissed the petitioners.46

To the mind of the Court, the NLRC did not err in finding that respondents had substantially discharged this burden.
Apart from their sworn declarations, respondents offered the sample affidavit of desistance given them by Capt.
Cura to support their narration that Capt. Cura threatened to terminate them unless they executed such affidavit of
desistance. The NLRC found the narration of respondents convincing:

On complainants' claim that they were illegally dismissed, suffice it to state that complainants' following
narration is convincing: that they were relieved from their post upon request of respondent's client to
 reduce the assigned security guards in their place to reduce their expenses; that Complainants were
thus relieved and when they reported to respondent's office, they were told to go back for re-
assignment; that meantime, complainants already filed a complaint for money claims against
respondents; that when complainants returned to respondent's office, they were told by no less than
the General Manager that their services were terminated due to the complaint they filed and as a
condition for their reposting or re-assignment, they were ordered first to withdraw their complaint but
they refused; that Complainants then amended their earlier complaint to illegal dismissal.

From the foregoing narration, it can be easily inferred that complainants were dismissed categorically.
There can be no abandonment on their part as they even immediately amended their complaint to
include illegal dismissal when they were given a condition to withdraw their complaint first before they
could be given assignment. Such condition is illegal and unwarranted. x x x47 (Emphasis supplied)

The CA also found that petitioner Symex used its prerogative to reassign its security guards as leverage in the
withdrawal of the labor complaint filed against petitioners by respondents, viz.:

We find nothing reversible in the ruling of the NLRC in finding illegal the dismissal of the private
respondents.

The assertion of Symex that the private respondents committed abandonment is contrary to the
circumstances herein presented. While it is a recognized prerogative for the employer in the security
services to reassign and post its security guards from time to time for the exigency of service, We
however hold that in this case, the petitioner used such prerogative as a leverage in the withdrawal of
the labor complaint filed against them by the private respondents.

It is well to remember that the private respondents in this case initially filed a labor complaint for
monetary claims prior to their recall to the head office for possible reassignment and new postings. To
believe that the private respondents refused to the new postings assigned to them because it will
inconvenience them is unlikely and contrary to human experience.48 (Emphasis supplied)

Petitioners, on the other hand, failed to discharge their burden of proving that the termination of respondents was for
a valid or authorized cause. In fact, they simply maintained that respondents were not illegally dismissed because
they refused their new assignments. Yet, petitioners offered no evidence at all to prove respondents' alleged new
assignments or respondents' refusal to accept the same. All that petitioners offer as proof that respondents were not
dismissed is the argument that respondents remained in the roll of the security guards of petitioner Symex. And yet,
petitioners failed to even present said roll of security guards to prove this assertion.

Respondents are not guilty of

abandonment.

The Court further agrees with the findings of the CA that respondents were not guilty of abandonment. Tan Brothers
Corporation of Basilan City v. Escudero49 extensively discussed abandonment in labor cases:

As defined under established jurisprudence, abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. It constitutes neglect of duty and is a just cause for termination of
employment under paragraph (b) of Article 282 [now Article 297] of the Labor Code. To constitute
abandonment, however, there must be a clear and deliberate intent to discontinue one's employment
without any intention of returning. In this regard, two elements must concur: (1) failure to report for work
or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor and being manifested by some
overt acts. Otherwise stated, absence must be accompanied by overt acts unerringly pointing to the
fact that the employee simply does not want to work anymore. It has been ruled that the employer has
the burden of proof to show a deliberate and unjustified refusal of the employee to resume his
employment without any intention of returning.50 (Emphasis supplied)

In this case, the respondents' act of filing a complaint for illegal dismissal with prayer for reinstatement belies any
intention to abandon employment.51 To be sure, the immediate filing of a complaint for illegal dismissal, more so
when it includes a prayer for reinstatement, has been held to be totally inconsistent with a charge of abandonment.52
To reiterate, abandonment is a matter of intention and cannot be lightly inferred, much less legally presumed, from
certain equivocal acts.53

The rule is that factual findings of quasi-judicial agencies such as the NLRC are generally accorded not only
respect, but at times, even finality because of the special knowledge and expertise gained by these agencies from
handling matters falling under their specialized jurisdiction.54 It is also settled that this Court is not a trier of facts and
does not normally embark in the evaluation of evidence adduced during trial.55

The Court has consistently ruled in the recent decisions of Perea v. Elburg Shipmanagement Philippines, Inc.56 and
Madridejos v. NYK-Fil Ship Management, Inc.,57 that the factual findings of the NLRC, when confirmed by the CA,
are usually conclusive on this Court:

[T]his Court limits itself to questions of law in a Rule 45 petition:

As a rule, we only examine questions of law in a Rule 45 petition. Thus, "we do not re-examine
conflicting evidence, re-evaluate the credibility of witnesses, or substitute the findings of fact of the
[National Labor Relations Commission], an administrative body that has expertise in its specialized
field." Similarly, we do not replace our "own judgment for that of the tribunal in determining where the
weight of evidence lies or what evidence is credible." The factual findings of the National Labor
Relations Commission, when confirmed by the Court of Appeals, are usually "conclusive on this
Court."58

Award of separation pay is proper.

Separation pay is warranted when the cause for termination is not attributable to the employee's fault, such as those
provided in Articles 29859 to 29960 of the Labor Code, as well as in cases of illegal dismissal where reinstatement is
no longer feasible.61

The payment of separation pay and reinstatement are exclusive remedies.62 In Dee Jay's Inn and Cafe v.
Raneses,63 the Court ruled that "[i]n a case where the employee was neither found to have been dismissed nor to
have abandoned his/her work, the general course of action is for the Court to dismiss the complaint, direct the
employee to return to work, and order the employer to accept the employee."64 The circumstances in this case,
however, warrant the application of the doctrine of strained relations.

Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or viable. On one hand, such payment liberates the
employee from what could be a highly oppressive work environment. On the other hand, it releases the employer
from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust.65

Strained relations must be demonstrated as a fact.66 The doctrine of strained relations should not be used recklessly
or applied loosely nor be based on impression alone.67
On this score, the NLRC has made a factual finding, sustained by the CA, that the length of time this case has
dragged has invariably resulted in a strain in the relations between respondents and petitioners, so that
reinstatement is now impossible. Once more, this factual finding is binding on this Court. Accordingly, the award for
separation pay is proper.

Award of other money claims, moral

and exemplary damages are
warranted.

With respect to the award of money claims, as well as moral and exemplary damages, the sole office of the writ of
certiorari, as aptly pointed out by the CA, is the correction of errors of jurisdiction including the commission of grave
abuse of discretion amounting to lack or excess of jurisdiction.68 It does not include correction of the NLRC's
evaluation of the evidence or of its factual findings.69 Such findings are generally accorded not only respect but also
finality.70

In this case, it is noteworthy to stress that respondents have presented their pay slips to prove their monetary
claims. It is settled that once the employee has set out with particularity in his complaint, position paper, affidavits
and other documents the labor standard benefits he is entitled to, and which the employer failed to pay him, it
becomes the employer's burden to prove that it has paid these money claims. Once more, he who pleads payment
has the burden of proving it; and even where the employees must allege nonpayment, the general rule is that the
burden rests on the defendant to prove payment, rather than on the plaintiff to prove nonpayment.71 Petitioners
could have easily presented pertinent company records to disprove respondents' claims. Yet, the records of the
case are bereft of such company records thus giving merit to respondents' allegations. It is a rule that failure of
employers to submit the necessary documents that are in their possession as employers gives rise to the
presumption that the presentation thereof is prejudicial to their cause.72

Moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes
an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy.
Exemplary damages, on the other hand, are recoverable when the dismissal was done in a wanton, oppressive, or
malevolent manner.73

The Court also affirms the award of moral and exemplary damages to respondents. As aptly pointed out by both the
NLRC and the CA, the acts constitutive of respondents' dismissal are clearly tainted with bad faith as they were
done to punish them for filing a complaint against petitioner Symex before the LA and for their refusal to withdraw
the same.

Petitioner Arcega is not liable for

obligations of petitioner Symex absent
showing of gross negligence or bad
faith on his part.

Finally, as to petitioner Arcega's liability for the obligations of Symex to respondents, the Court notes that there was
no showing that Arcega, as President of Symex, willingly and knowingly voted or assented to the unlawful acts of
the company.

In Guillermo v. Uson,74 the Court resolved the twin doctrines of piercing the veil of corporate fiction and personal
liability of company officers in labor cases. According to the Court:

The common thread running among the aforementioned cases, however, is that the veil of corporate
fiction can be pierced, and responsible corporate directors and officers or even a separate but related
corporation, may be impleaded and held answerable solidarily in a labor case, even after final judgment
and on execution, so long as it is established that such persons have deliberately used the corporate
vehicle to unjustly evade the judgment obligation, or have resorted to fraud, bad faith or malice in doing
so. When the shield of a separate corporate identity is used to commit wrongdoing and opprobriously
elude responsibility, the courts and the legal authorities in a labor case have not hesitated to step in
and shatter the said shield and deny the usual protections to the offending party, even after final
judgment. The key element is the presence of fraud, malice or bad faith. Bad faith, in this instance,
does not connote bad judgment or negligence but imparts a dishonest purpose or some moral obliquity
and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill
will; it partakes of the nature of fraud.

As the foregoing implies, there is no hard and fast rule on when corporate fiction may be disregarded;
instead, each case must be evaluated according to its peculiar circumstances. For the case at bar,
applying the above criteria, a finding of personal and solidary liability against a corporate officer like
Guillermo must be rooted on a satisfactory showing of fraud, bad faith or malice, or the presence of any
of the justifications for disregarding the corporate fiction.75 (Emphasis supplied)

A corporation is a juridical entity with a legal personality separate and distinct from those acting for and in its behalf
and, in general, from the people comprising it.76 Thus, as a general rule, an officer may not be held liable for the
corporation's labor obligations unless he acted with evident malice and/or bad faith in dismissing an employee.77
Section 3178 of the Corporation Code is the governing law on personal liability of officers for the debts of the
corporation. To hold a director or officer personally liable for corporate obligations, two requisites must concur: (1) it
must be alleged in the complaint that the director or officer assented to patently unlawful acts of the corporation or
that the officer was guilty of gross negligence or bad faith; and (2) there must be proof that the officer acted in bad
faith.79

Based on the records, respondents failed to specifically allege either in their complaint or position paper that Arcega,
as an officer of Symex, willfully and knowingly assented to the acts of Capt. Cura, or that Arcega had been guilty of
gross negligence or bad faith in directing the affairs of the corporation. In fact, there was no evidence at all to show
Arcega's participation in the illegal dismissal of respondents. Clearly, the twin requisites of allegation and proof of
bad faith, necessary to hold Arcega personally liable for the monetary awards to the respondents, are lacking.

Arcega is merely one of the officers of Symex and to single him out and require him to personally answer for the
liabilities of Symex are without basis.

The Court has repeatedly emphasized that the piercing of the veil of corporate fiction is frowned upon and can only
be done if it has been clearly established that the separate and distinct personality of the corporation is used to
justify a wrong, protect fraud, or perpetrate a deception.80 To disregard the separate juridical personality of a
corporation, the wrongdoing must be established clearly and convincingly. It cannot be presumed.

WHEREFORE, the petition is DENIED. The Decision dated January 12, 2012 and the Resolution dated June 27,
2012 of the Court of Appeals in CA-G.R. SP No. 119039 are hereby AFFIRMED with MODIFICATION in that
petitioner Rafael Y. Arcega is absolved from solidary liability.

SO ORDERED.

ALFREDO BENJAMIN S. CAGUIOA

Associate Justice

WE CONCUR:
 ANTONIO T. CARPIO
Associate Justice
Chairperson

(On official leave)

DIOSDADO M. PERALTA
ESTELA M. PERLAS-BERNABE*
Associate Justice
Associate Justice

ANDRES B. REYES, JR.

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decisionhad been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to the Section 13, Article VIII of the 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.

MARIA LOURDES P.A. SERENO

Chief Justice

Footnotes
*
On official leave.
1
Rollo, pp. 10-35.
2
Id. at 36-48. Penned by Associate Justice Romeo F. Barza, with Associate Justices Noel G. Tijam (now a
Member of this Court) and Edwin D. Sorongon concurring.
3
Id. at 49-50.
4
Id. at 116-129. Penned by Commissioner Teresita D. Castillon-Lora, with Presiding Commissioner Raul T.
Aquino concurring while Commissioner Napoleon M. Menese took no part.
5
Id. at 143-144.
6
Id. at 91-98. Penned by Labor Arbiter Enrique L. Flores, Jr.
7
Id. at 51-54.
8
Id. at 37.
9
Id.
10
Id. at 37-38.
11
Id. at 38.
12
Id.
13
Id.
14
Id. at 38-39.
15
Id. at 53-54.
16
Id. at 39.
17
See id. at 39-40.
18
Id. at 91-98.
19
Id. at 98.
20
Id. at 96-97.
21
Id. at 97.
22
Id. at 116-129.
23
Id. at 128-129.
24
292-A Phil. 239, 244 (1993).
25
Rollo, pp. 126-127.
26
Id. at 128.
27
Id. at 143-144.
28
Id. at 145-170.
29
Id. at 36-48.
30
Id. at 43.
31
Id. at 45-46, citing Grandreq Industrial Steel Products, Inc. v. Margallo, 611 Phil. 612, 629 (2009).
32
Id. at 46.
33
CA rollo, pp. 192-195.
34
Rollo, pp. 49-50.
35
Sta. Isabel v. Perla Compañia De Seguros, Inc., G.R. No. 219430, November 7, 2016, p. 6, citing Cebu
People's Multi-Purpose Cooperative v. Carbonilla, Jr., 779 Phil. 563, 579 (2016).
36
Id.
37
Exocet Security and Allied Services Corporation v. Serrano, 744 Phil. 403, 418 (2014).
38
Id.
39
Id. at 420.
40
Id., citing Salvaloza v. National Labor Relations Commission, 650 Phil. 543, 557 (2010).
41
Rollo, p. 24.
42
Id. at 201-202.
43
Records, pp. 9-10.
44
Exodus International Construction Corporation v. Biscocho, 659 Phil. 142, 154 (2011).
45
523 Phil. 199 (2006).
46
Id. at 209-210.
47
Rollo, pp. 126-127.
48
Id. at 43.
49
713 Phil. 392 (2013).
50
Id. at 400-401.
51
See Pentagon Steel Corporation v. Court of Appeals, 608 Phil. 682, 696-697 (2009).
52
Chavez v. NLRC, 489 Phil. 444, 460 (2005).
53
Mallo v. Southeast Asian College, Inc., 771Phil.410, 421 (2015).
54
General Milling Corporation v. Viajar, 702 Phil. 532, 540 (2013), citing Eureka Personnel & Management
Services, Inc. v. Valencia, 610 Phil. 444, 453 (2009).
55
Id., citing Eureka Personnel & Management Services, Inc. v. Valencia, id. at 452-453 and Bernarte v.
Philippine Basketball Association, 673 Phil. 384 (2011).
56
G.R. No. 206178, August 9, 2017.
57
G.R. No. 204262, June 7, 2017.
58
Perea v. El burg Shipmanagement Philippines, Inc., supra note 4 7, at 10, citing Madridejos v. NYK-Fil Ship
Management, Inc., id. at 13-14.
59
As renumbered pursuant to Department Advisory No. 01, Series of 2015.

ART. 298 [Formerly Article 283]. Closure of Establishment and Reduction of Personnel. - The employer may
also terminate the employment of any employee due to the installation of laborsaving 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. In case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least
one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses
and in cases of closures or cessation of operations of establishment or undertaking not due to serious
business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least
one-half (l/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months
shall be considered one (1) whole year.
60
ART. 299 [Formerly Article 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:
Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month
salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as
one (1) whole year.
61
Reno Foods, Inc. and/or Khu v. Nagkakaisang Lakas ng Manggagawa (NLM)-Katipunan, 629 Phil. 247, 257
(2010).
62
Bani Rural Bank, Inc. v. De Guzman, 721 Phil. 84, 100 (2013).
63
G.R. No. 191823, October 5, 2016, 805 SCRA 143.
64
Id. at 167.
65
Bank of Lubao, Inc. v. Manabat, 680 Phil. 792, 801 (2012).
66
Paguio Transport Corporation v. NLRC, 356 Phil. 158, 171 (1998).
67
Tenazas v. R. Villegas Taxi Transport, 731Phil.217, 232 (2014).
68
Rollo, p. 46.
69
Id.
70
Id. at 46-47.
71
Grandteq Industrial Steel Products, Inc. v. Margallo, supra note 31, at 629.
72
See National Semiconductor (HK) Distribution, Ltd. v. NLRC, 353 Phil. 551, 558 (1998).
73
Kay Products Inc. v. Court of Appeals, 502 Phil. 783, 798 (2005); Norkis Trading Co., Inc. v. NLRC, 504
Phil. 709, 719-720 (2005).
 74
G.R. No. 198967, March 7, 2016, 785 SCRA 543.
75
Id. at 556-557.
76
The Coffee Bean and Tea Leaf Philippines, Inc. v. Arenas, 755 Phil. 882, 891 (2015).
77
Id. at 891-892.
78
SEC. 31. Liability of directors, trustees or officers. - 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 or acquire any personal or pecuniary interest in conflict with their duty
as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered
by the corporation, its stockholders or members and other persons.
79
Heirs of Fe Tan Uy v. International Exchange Bank, 703 Phil. 477, 486 (2013).
80
Id. at 487.

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