Statement of the Legal Problem
The issue that needs to be resolved in this case is whether petitioner, Conrado Tan is liable, either jointly or severally with the Nationwide Steel Corporation, for the monetary award in favor of the respondents - Restituto Timbal, Jr.
I. Legal Concepts relevant to the Case
Source: Corporation Code of the Philippines
(Batas Pambansa Blg. 68)
TITLE III - BOARD OF DIRECTORS/TRUSTEES/OFFICERS
SECTION 25. Corporate officers, quorum.
Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director, a treasurer who may or may not be a ...view middle of the document...
A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident malice and bad faith in terminating their employment.
Source: Labor Code of the Philippines
BOOK SIX – POST EMPLOYMENT
TITLE 1: TERMINATION OF EMPLOYMENT
ARTICLE 282. Termination by employer.
An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
ARTICLE 285. Termination by employee.
(a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages.
(b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes:
1. Serious insult by the employer or his representative on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his representative;
3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and
4. Other causes analogous to any of the foregoing.
ARTICLE 289. Who are liable when committed by other than natural person. – If the offense is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity.
Definition of Terms
Trust Fund Doctrine – It refers to the principle that the capital stock, property and other assets of the corporation are regarded as equity in trust for payment of corporate creditors. “The doctrine is the underlying principle in the procedure for the distribution of capital assets, embodied in Corporation Code, which allows the distribution of corporate capital only in three instances: (1) amendment of Articles of Incorporation to reduce the authorize capital stock, (2) purchase of redeemable shares by the corporation, regardless of the existence of unrestricted retained earnings, and (3) dissolution and eventual liquidation of corporation. Furthermore, the doctrine is articulated in Section 41 on the power of...