Liabilities

Dear Atty. Kathy,

I am a new HR Officer in our X Corporation, and one of my tasks is to be a moderator during administrative hearings. Our company received a complaint from a former employee for illegal dismissal and I was included as a respondent. I asked the employee why he included me, and his reason was I presided over the administrative hearing which is the basis of his complaint. Do I have any liability for illegal dismissal just because I presided over the administrative hearing of said employee?

Jett

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Dear Jett,

The law treats a company or a corporation as having its own personality, separate from the individuals who make it up and from any other entity that it may be linked to. A corporation, being a legal entity, can act only through its directors, officers and employees. When directors, officers and employees take on obligations as such, those obligations belong to the corporation, not to them personally. There are cases, however, where they may also be held liable with the corporation, such as, when they act in bad faith in directing the corporate affairs.

In connection with this, in case of dismissals, officers of a company may only be held liable with the company if they acted in bad faith or with malice.

The Supreme Court has ruled that bad faith does not merely signify bad judgment or negligence. Bad faith means a dishonest purpose or some moral obliquity and conscious doing of wrong; a breach of a known duty through some motive or interest or ill will; and partakes of the nature of fraud.

In light of the foregoing discussion, you may be held liable for illegal dismissal if the former employee can show that you conducted the administrative hearing in bad faith; with malice; in breach of any duty; and/or motivated by ill will. Without such proof, you may not be held liable for the alleged illegal dismissal, and the corporation’s separate and distinct personality must be upheld.

(Team Pacific Corporation, et al. versus Layla M. Parente, G.R. No. 206789, 15 July 2020)

Atty. Kathy Larios