Case Digest: Zuellig Freight v. NLRC

G.R. No. 157900: July 22, 2013




San Miguel brought a complaint for unfair labor practice, illegal dismissal, non-payment of salaries and moral damages against petitioner, formerly known as Zeta Brokerage Corporation (Zeta). San Miguel contended that the amendments of the articles of incorporation of Zeta were for the purpose of changing the corporate name, broadening the primary functions, and increasing the capital stock; and that such amendments could not mean that Zeta had been thereby dissolved.

On its part, petitioner countered that San Miguels termination from Zeta had been for a cause authorized by the Labor Code; that its non-acceptance of him had not been by any means irregular or discriminatory; that its predecessor-in-interest had complied with the requirements for termination due to the cessation of business operations; that it had no obligation to employ San Miguel in the exercise of its valid management prerogative; that all employees had been given sufficient time to make their decision whether to accept its offer of employment or not, but he had not responded to its offer within the time set; that because of his failure to meet the deadline, the offer had expired; that he had nonetheless been hired on a temporary basis; and that when it decided to hire another employee instead of San Miguel, such decision was not arbitrary because of seniority considerations.

LA ruled that San Miguel has been illegally dismissed. The NLRC affirmed the LAs decision and denied the motion for reconsideration of petitioner. Petitioner then filed a petition for certiorari in the CA, imputing to the NLRC grave abuse of discretion amounting to lack or excess of jurisdiction. The CA affirmed the NLRC decision. Hence, this petition.

ISSUE: Whether or not CA erred in affirming NLRC decision

HELD: No. CA decision affirmed

Labor Law

It is worthy to point out that the Labor Arbiter, the NLRC, and the CA were united in concluding that the cessation of business by Zeta was not a bona fide closure to be regarded as a valid ground for the termination of employment of San Miguel within the ambit of Article 283 of the Labor Code.

Article 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving 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 Department of Labor and Employment at least one (1) month before the intended date thereof.

The unanimous conclusions of the CA, the NLRC and the Labor Arbiter, being in accord with law, were not tainted with any abuse of discretion, least of all grave, on the part of the NLRC. Verily, the amendments of the articles of incorporation of Zeta to change the corporate name to Zuellig Freight and Cargo Systems, Inc. did not produce the dissolution of the former as a corporation. For sure, the Corporation Code defined and delineated the different modes of dissolving a corporation, and amendment of the articles of incorporation was not one of such modes. The effect of the change of name was not a change of the corporate being, for, as well stated in Philippine First Insurance Co., Inc. v. Hartigan:"The changing of the name of a corporation is no more the creation of a corporation than the changing of the name of a natural person is begetting of a natural person. The act, in both cases, would seem to be what the language which we use to designate it imports a change of name, and not a change of being."

From the foregoing documents, it cannot be denied that petitioner corporation was aware of First Summa Savings and Mortgage Banks change of corporate name to PAIC Savings and Mortgage Bank, Inc. Knowing fully well of such change, petitioner corporation has no valid reason not to pay because the IGLF loans were applied with and obtained from First Summa Savings and Mortgage Bank. First Summa Savings and Mortgage Bank and PAIC Savings and Mortgage Bank, Inc., are one and the same bank to which petitioner corporation is indebted. A change in the corporate name does not make a new corporation, whether effected by a special act or under a general law. It has no effect on the identity of the corporation, or on its property, rights, or liabilities. The corporation, upon to change in its name, is in no sense a new corporation, nor the successor of the original corporation. It is the same corporation with a different name, and its character is in no respect changed.

In short, Zeta and petitioner remained one and the same corporation. The change of name did not give petitioner the license to terminate employees of Zeta like San Miguel without just or authorized cause. The situation was not similar to that of an enterprise buying the business of another company where the purchasing company had no obligation to rehire terminated employees of the latter. Petitioner, despite its new name, was the mere continuation of Zeta's corporate being, and still held the obligation to honor all of Zeta's obligations, one of which was to respect San Miguel's security of tenure. The dismissal of San Miguel from employment on the pretext that petitioner, being a different corporation, had no obligation to accept him as its employee, was illegal and ineffectual.