Manila
FIRST DIVISION
[ G.R. No. 246270. June 30, 2021 ]
SUSAN R. ROQUEL, PETITIONER, VS. PHILIPPINE NATIONAL BANK AND PNB GLOBAL REMITTANCE AND FINANCIAL CO. (HK) LTD., RESPONDENTS.
D E C I S I O N
CARANDANG, J.:
This a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the Decision2 dated May 30, 2018 and the Resolution3 dated March 15, 2019 of the Court of Appeals (CA) in CA-G.R. SP No. 144604. The said Decision and Resolution denied the Petition for Certiorari petitioner Susan R. Roquel (Roquel), thereby affirming the dismissal by the National Labor Relations Commission (NLRC) of Roquel's complaint for illegal dismissal.
Facts of the Case
On May 16, 1990, PNB International Finance Ltd. (PNB-IFL) – a subsidiary of respondent Philippine National Bank (PNB) – hired Roquel as a general clerk. In May 2002, PNB-IFL temporarily transferred its operations to PNB's Hong Kong Branch (PNB-HK) and PNB's Remittance Center Limited (PNB-RCL). PNB-RCL is a wholly-owned subsidiary of PNB. As a result of this arrangement, Roquel was assigned to PNB-HK on June 1, 2002 as a supervisor and was later designated as an officer-in-charge.4
PNB-IFL resumed its operations in December 2004 but on January 1, 2005, PNB-RCL designated Roquel as its branch manager until April 19, 2010. From January 1, 2005 to April 19, 2010, Roquel was assigned to the following PNB-RCL branches: (1) Northpoint Branch from January 1, 2005 to April 30, 2005; (2) Worldwide House Shop 101 from May 1, 2005 to April 5, 2006; and (3) Worldwide House Shop 122 from April 6, 2006 to April 19, 2010.5
On February 12, 2010, PNB-IFL was renamed to respondent PNB Global Remittance and Finance Co. (HK) Ltd. (PNB Global).6
On April 20, 2010, PNB-RCL transferred Roquel to PNB-HK as a trainee for the "Accounts Management Group HK Branch". Less than three months later (or on July 1, 2020), PNB-RCL merged with PNB Global – with PNB Global emerging as the surviving corporation. PNB Global thus absorbed PNB-RCL's employees, including Roquel. Nevertheless, Roquel stayed in PNB-HK.7
Upon the completion of her training in PNB-HK on August 16, 2011, Roquel was transferred back to PNB Global to assume officer-in-charge duties at PNB Global's branches. On September 14, 2011, Roquel was notified that she will be assigned as a reliever of PNB Global's absent or on-leave branch managers.8 On December 23, 2011, PNB Global issued a termination letter9 to Roquel, who was given a month's compensation in lieu of a 1-month notice, a portion of which reads:
Please be advised that we are terminating your employment with PNB Global Remittance and Financial Company (HK) Limited effective at the close of the business hours of 31st of December 2011.
In this regard, a cheque is enclosed for HK$51,896.60 equivalent to one-month salary in lieu of the one-month notice as prescribed in your employment contract with the company and HK Employment Ordinance on termination, your remaining salary for December 2011, overtime pay, money value of your leave credits, and other payables of the company per attached final computation sheet.
Please acknowledge receipt.10
Roquel deferred the receipt of the termination letter and its enclosed check. From March 2012 up to February 2013, Roquel sent several letters11 to respondent's officers in Hong Kong and the Philippines asking for the reason for her termination and requesting to avail herself of an early retirement package. On June 16, 2014, PNB's Global General Manager replied by stating that: (1) a contract of employment may be terminated through a notice or by paying the terminated employee's wages in lieu of such notice and (2) management is not offering any early retirement programs at that moment.12 Unsatisfied with PNB Global's response, Roquel filed a Complaint13 for illegal dismissal against PNB with the NLRC Regional Arbitration Branch III, San Fernando, Pampanga on August 8, 2014. PNB moved to dismiss the complaint for lack of jurisdiction and averred that Roquel was never PNB's employee but was an employee of PNB Global.14 Roquel alleged that PNB Global was a mere instrumentality of PNB.15
Ruling of the Labor Arbiter
In a Decision16 dated November 28, 2014, the Labor Arbiter (LA) granted Roquel's complaint, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered finding complainant Susan R. Roquel to have been illegally dismissed.
Respondent Philippine National Bank is ORDERED to pay her the following:
| 1. Separation Pay |
- |
Php 1,891,707.84 |
| 2. Backwages |
- |
Php 3,025,872.68 |
| 3. Moral Damages |
- |
Php 30,000.00 |
| 4. Exemplary Damages |
- |
Php 30,000.00 |
| 5. 10% Attorney's Fees |
- |
Php 497,758.05 |
|
|
---------------------- |
| GRAND TOTAL |
|
Php5,275,338.5717 |
The rest of the money claims is (sic) denied for lack of merit.
The attached computation prepared by the Fiscal Examiner shall form an integral part of this Decision.
SO ORDERED.18 (Emphasis in the original)
The LA explained that while PNB Global has a separate and distinct juridical personality from PNB, PNB Global acted as a mere instrumentality of PNB "at least with regard to the employment of complainant Roquel."19 Based on the evidence presented before it, the LA concluded that PNB exercised control and supervision over the policy and personal affairs of PNB Global and all member-corporations under the umbrella organization of the PNB Hong Kong Group of Companies (PNB Hong Kong Group). Proof of PNB's control was Roquel's assignment to PNB-HK. by the latter's Senior Vice President. Since the transfer was "in connection with the streamlining and reorganization of the PNB Hong Kong Group",20 it evinced PNB's ability to control and implement policy decisions over PNB's subsidiary companies. The LA noted that Roquel was even nominated to represent PNB in the Board of Directors of the Philippine Association of Hong Kong. Roquel's transfer between PNB-HK and PNB Global demonstrated that the corporations acted as one entity.21
Given PNB's control over Roquel's employment, the LA ruled that it had jurisdiction over Roquel's complaint. As to the legality of Roquel's dismissal, Roquel was found to be illegally dismissed since PNB failed to prove any valid basis for Roquel's termination. It was also held that Roquel was not afforded any due process. However, the LA clarified that Roquel is not an overseas Filipino worker. Following Article 27922 of the Labor Code, the LA awarded Roquel (1) separation pay of one month for every year of service, in lieu of restatement; (2) backwages from December 23, 2011 until the date of the decision; (3) moral damages because Roquel was dismissed in an oppressive and malevolent manner; (4) exemplary damages; and (5) attorney's fees. Roquel's prayer for retirement benefits and incentives under the mandatory provident fund were denied for lack of basis.23
Aggrieved, respondents appealed the LA's Decision with the NLRC.
Ruling of the National Labor Relations Commission
In its Decision dated June 26, 2015, the NLRC initially agreed with the LA's findings of illegal dismissal. It held that PNB Global was a mere alter ego of PNB with the companies maintaining an "intimate corporate relationship"24 by integrating their workforce and acting as employers of Roquel. The NLRC observed that the officers of the PNB Hong Kong Group acted for or in behalf of PNB Global and PNB where the officers of the former were also officers of the latter companies. The NLRC emphasized that letters and memoranda issued to Roquel notifying her of her transfers within the PNB Hong Kong Group were issued by PNB Global, PNB-HK, and PNB HK Group. Therefore, "the operations and officers of PNB Global and PNB are so intertwined or so meshed together as to make each company indistinguishable from the other."25 In fact, PNB admitted to such relationship when it stated in its position paper that Roquel's transfer to PNB-HK on April 20, 2010 was in line with "the provisions of her appointment as Branch Manager of PNB-RCL where the change of assignments from one entity to the other PNB affiliates/subsidiaries is explicitly stipulated."26
However, the NLRC granted respondent's Motion for Reconsideration27 and dismissed Roquel's complaint due to a lack of jurisdiction over the case. The NLRC reversed itself and held that there was no sufficient evidence to disregard the separate and distinct entities of PNB Global and PNB. According to the NLRC, PNB had no hand in hiring, transferring, and dismissing Roquel. The NLRC concluded that PNB-HK is separate and distinct from PNB even if PNB-HK is a branch of PNB. Roquel's transfer to PNB-HK did not merit piercing the veil of PNB-HK's corporate fiction because Roquel's transfer was temporary and her duties were to carry out the operations of PNB Global from June 2002 to December 2004.28
With Roquel's Motion for Reconsideration denied in a Resolution29 dated December 22, 2015, Roquel elevated the matter to the CA via a Petition for Review on Certiorari30 under Rule 65 of the Rules of Court.
Ruling of the Court of Appeals
In its Decision31 dated May 30, 2018, the CA found no grave abuse of discretion on the part of the NLRC. Thus, it affirmed the NLRC 's pronouncement of PNB Global being Roquel's sole employer.32
The CA observed that Roquel's assignment to PNB-HK was only "for her training which she would use in her new assignment in PNB Global."33 Thus, Roquel's stint with PNB-HK did not make PNB her employer. Following the alter ego doctrine, the three elements of (1) control by PNB, (2) fraud or fundamental unfairness imposed on Roquel, and (3) harm or damage caused to Roquel were absent.34
Proceedings before this Court
Petitioner's Arguments
As Roquel's Motion for Reconsideration35 was denied by the CA in its Resolution36 dated March 15, 2019, Roquel filed the instant Petition for Review on Certiorari under Rule 45 of the Rules of Court. Roquel maintained that she and PNB have an employee-employer relationship because Roquel was a "shared personnel or employee"37 of the PNB Hong Kong Group. Her employee ID indicates that she is an employee of PNB-HK, PNB-RCL, and PNB-IFL. Lastly, a Memorandum dated May 31, 2002 revealed PNB-HK's act of: (1) re-appointing her as supervisor of PNB-HK's branches; and (2) paying her salary. Therefore, as PNB's employee, her dismissal is cognizable by the LA. She was thus illegally dismissed from her employment following the Labor Code.38
Respondents' Comment
In its Comment39 dated October 3, 2019, PNB insisted that it never exercised control over Roquel as PNB only trained her in 2002. During her training, PNB-RCL paid Roquel's salary. Being an employee of PNB's Hong Kong subsidiaries, Hong Kong laws apply in the instant case, not the Labor Code.40
Petitioner's Reply
Roquel filed Reply41 dated November 14, 2019. She reiterated that PNB-HK and PNB-Global's operations were controlled and supervised by PNB. In fact, three members of PNB-HK are part of PNB Hong Kong Group's Joint Management Committee. PNB-HK's Chairman and General Manager, a certain Romulo Rodel C. Bicol, was also PNB's Country Head for Hong Kong and was the Chairman of PNB Global's Senior Management Committee.42
Issue
The sole issue to be determined is the applicability of the doctrine on piercing the veil of corporate fiction in order to bring this case under the jurisdiction of the LA, NLRC, and the courts.
Ruling of the Court
The petition is meritorious. We agree with the findings of the LA and the initial findings of the NLRC. PNB was Roquel's employer and is liable for the illegal dismissal of Roquel following Section 29443 of the Labor Code.
The existence of the employer-employee relationship is essentially a question of fact. While factual findings of quasi-judicial agencies like the NLRC are generally accorded respect and finality if supported by substantial evidence, considering the conflicting decisions of the LA, NLRC, and CA, this Court must now make its own evaluation of the facts of the case.
Roquel was able to prove – through clear and convincing evidence – that PNB was her employer on the basis of the alter ego theory.
The alter ego theory is one way to pierce the veil of a corporation's legal fiction – the other two ways being in cases of fraud or in cases when public convenience is defeated. Following the nomenclature of the alter ego theory, a corporation's separate juridical personality is selectively disregarded because the "corporation is merely a farce since it is a mere alter ego or business conduit of a person, or where the corporation is so organized and controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another corporation."44 The existence or non-existence of fraud is immaterial under this theory because "the doctrine of alter ego is based upon the misuse of a corporation by an individual [or another corporation] for wrongful or inequitable purposes."45 Unlike in cases of fraud, there is no need to determine whether the defendants intended to deceive the plaintiff. What is analyzed is "how the corporation operated and the individual defendant's relationship to that operation"46 that led to injustice or resulted in the disregard of a third party's (i.e., plaintiff's) rights.47 Rather than focusing on the intent of the defendants, it is the result of their actions that is subject to careful scrutiny.
It is undisputed that during Roquel's 21 years and seven months' length of service, Roquel was transferred several times within the PNB Hong Kong Group. It is also uncontested that Roquel's numerous transfers between the companies did not sever her employment. The corporate structures of PNB Hong Kong Group's entities were so intertwined to the point that streamlining and reorganization was done as one unit. This was never refuted by PNB. Note, too, that all memoranda48 sent to Roquel after the restructuring used PNB's letterhead which, at the very least, gave the impression that Roquel's transfers were made with the authority of PNB. These circumstances muddle the separate corporate fiction between the PNB Hong Kong Group.1âшphi1
There was no clear delineation of authority over Roquel. Although PNB-IFL resumed operations in December 2004, it was still PNB-RCL who transferred Roquel to its own branches. PNB acknowledged the arrangement of using the same employees when PNB stated in its position paper that Roquel's transfer to PNB-HK on April 20, 2010 was in line with "the provisions of her appointment as Branch Manager of PNB-RCL where the change of assignments from one entity to the other PNB affiliates/subsidiaries is explicitly stipulated."49
PNB's admission that Roquel was transferred to PNB-HK in 2002 (during the temporary cessation of PNB-IFL's operations) and in 2010 (during Roquel's training) militates against PNB's claim of independence from its subsidiaries. Otherwise, PNB-IFL would have transferred Roquel to PNB-RCL in 2002 and not to PNB-HK. If PNB's subsidiaries truly operated independently from PNB-HK, training would have been conducted by the said subsidiaries. However, PNB provided the training through its branch, PNB-HK.
To highlight the interconnected within the entities comprising the PNB Hong Kong Group, below is a table showing the entities which effected Roquel's transfers from 2002:
| Effectivity Date |
Entity effecting transfer |
Entity where Roquel was transferred |
| June 1, 2002 |
PNB Hong Kong Group |
PNB-HK |
| January 1, 2005 |
PNB-RCL |
PNB-RCL's Northpoint Branch |
| May 1, 2005 |
PNB Hong Kong Group |
PNB-RCL's WWW Shop 101 Branch |
| April 6, 2006 |
PNB-RCL |
PNB-RCL's WWW Shop 122 Branch |
| April 20, 2010 |
PNB-RCL |
PNB-HK |
| August 16, 2011 |
PNB-HK |
PNB Global |
Note that even without a separate personality, the transfers effective June 1, 2002 and May 1, 2005 were by the PNB Hong .Kong Group. These circumstances, taken together, bolster Roquel's claim that the PNB Hong Kong Group shared its personnel.
It would be unjust to relieve PNB of any liability against Roquel's monetary claims when circumstances clearly show that PNB – through its branch, PNB-HK – exercised control and supervision over Roquel. To disregard the reality of how PNB and PNB Hong Kong Group interchangeably transferred Roquel from one department to another as if they were all one unit would mean that each transfer would merely be treated as a constant severance and reinstatement of Roquel's employment during the 22 years Roquel served PNB Hong Kong Group. This absurd conclusion behooves this Court to treat PNB's subsidiaries as PNB's alter egos in order to uphold Roquel's Constitutional right to security of tenure.
In all, PNB's active participation in the streamlining operations of the PNB Hong Kong Group and Roquel's constant transfer between the PNB-HK and PNB's subsidiaries clearly show that PNB benefitted from Roquel's service. It does not escape this Court's attention that Roquel was even nominated to represent PNB as a Director of the Philippine Association of Hong Kong.50 Therefore, it would be unjust – if not cruel – to absolve PNB of any liability just because Roquel was formally under PNB Global for most of her nearly 22 years of service.
Lastly, following this Court's ruling in Nacar v. Gallery Frames, legal interest of 6% per annum shall be imposed on the instant Decision awarding sum of money once this Decision becomes final and executory.
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The Decision dated May 30, 2018 and the Resolution dated March 15, 2019 of the Court of Appeals in CA-G.R. SP No. 144604 are REVERSED and SET ASIDE. The Decision dated June 26, 2015 of the National Labor Relations Commission, which affirmed the Decision dated November 28, 2014 of the Labor Arbiter is REINSTATED. Petitioner Susan R. Roquel was illegally dismissed and is entitled to the following amounts:
1. Backwages computed from December 23, 2011 (the date petitioner was illegally dismissed) until the finality of this Decision;
2. Separation pay of one month for every year of service – with petitioner's number of years in service computed from May 16, 1990 until the finality of this Decision;
3. Moral damages of P30,000.00;
4. Exemplary damages of P30,000.00; and
5. Attorney's fees equivalent to 10% of the total monetary awards.
All amounts shall earn legal interest of six percent (6%) per annum from the finality of this Decision until full payment.
The case is hereby REMANDED to the Labor Arbiter for the recomputation of the total monetary awards due to petitioner.
SO ORDERED.
Gesmundo, C.J., (Chairperson) and Inting,* JJ., concur.
Caguioa, J., See Dissenting Opinion.
Zalameda, J., with concurring Opinion.
Footnotes
* Designated as additional Member.
1 Rollo, pp. 12-42.
2 Penned by Associate Justice Samuel H. Gaerlan (now a Member of this Court), with the concurrence of Associate Justices Celia C. Librea-Leagogo and Germano Franciso D. Legaspi.
3 Id. at 90-91.
4 Id. at 190, 206.
5 Id. at 207, 352-353.
6 Id. at 352.
7 Id. at 353.
8 Id.
9 Id. at 166.
10 Id.
11 Id. at 167-177 and 179-182.
12 Id. at 184.
13 Id. at 92.
14 Id. at 207.
15 Id. at 208.
16 Penned by Labor Arbiter Roderick Q. Almeyda; id. at 206-216.
17 Should be P5,475,338.57.
18 Rollo, p. 216.
19 Id. at 210.
20 Id. at 211.
21 Id. at 210-213.
22 Renumbered to Article 294 by DOLE Department Advisory No. 1, series of 2015.
Article 294. [279] Security of Tenure. – In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
23 Rollo, pp. 213-216.
24 Id. at 233.
25 Id. at 236.
26 Id. at 237.
27 Id. at 239-259.
28 Resolution dated September 30, 2015; id. at 276-283.
29 Id. at 298-308
30 Id. at 94-114.
31 Supra note 2.
32 Rollo, p. 59.
33 Id. at 61.
34 Id. at 62.
35 Id. at 64-87.
36 Supra note 3.
37 Rollo, p. 23.
38 Id. at 21-27.
39 Id. at 368-381.
40 Id. at 373-377.
41 Id. at 392-411.
42 Id. at 393-399.
43 Article 294. [279] Security of Tenure. – In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.
44 General Credit Corp. v. Alsons Dev't. and Investment Corp., 542 Phil. 219, 232 (2007).
45 I/AME v. Litton and Co., Inc., 822 Phil. 610, 623 (2017).
46 Concept Builders, Inc. v. NLRC, 326 Phil. 955, 966 (1996).
47 PNB v. Andrada Electric & Engineering Company, 430 Phil. 882, 894 (2002).
48 Rollo, pp. 150-159, 165-166, 184.
49 Id. at 237.
50 Id. at 211.
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