CORPORATE JURIDICAL PERSONALITY CASE NO.

12

People's Security, Inc. and Nestor Racho vs. Julius S. Flores and Esteban S. Tapiru
G.R. No. 211312. December 5, 2016

FACTS:

Respondents were security guards previously employed by People’s Security Inc (PSI). The respondents
were assigned at PLDT. However, PSI and PLDT security services agreement terminated and,
accordingly, PSI recalled the respondents assigned in PLDT. The respondents filed an illegal dismissal
claiming that they are PLDT employees.

Thereafter PSI reassigned the respondents to the facilities of their other clients and were again
subsequently relieved from their respective assignments. PSI refused to give them anymore
assignments.

Respondents filed an illegal dismissal case with the NLRC against PSI and its President Nestor Racho.

LA decided in favor of the respondents, directing petitioners jointly and severally liable to pay the
separation pay and back wages. NLRC reversed the decision and a petition for review on certiorari was
filed with CA, hence this case.

ISSUE:
1. Whether respondents were illegally dismissed.

2. Whether Racho is jointly and solidarily liable with PSI for the payment of the monetary
awards to the respondents.

HELD: Petition for Certiorari is hereby DENIED.

1. YES.

2. NO.
Anent, the propriety of holding Racho, PSI's President, jointly and solidarily liable with PSI for the payment
of the money awards in favor of the respondents, the Court finds for the petitioners.

The doctrine of piercing the corporate veil applies only when the corporate fiction is used to defeat public
convenience, justify wrong, protect fraud, or defend crime. In the absence of malice, bad faith, or a specific
provision of law making a corporate officer liable, such corporate officer cannot be made personally liable
for corporate liabilities.

The respondents failed to adduce any evidence to prove that Racho, as President and General Manager
of PSI, is hiding behind the veil of corporate fiction to defeat public convenience, justify wrong, protect fraud,
or defend crime. Thus, it is only PSI who is responsible for the respondents' illegal dismissal.