Labor Case Digest: Authority on Behalf of Corporation

IN A case for illegal dismissal and money claims, the labor arbiter rendered a decision in favor of petitioner Antonio P. Salenga. From the decision, the Office of the Government Corporate Counsel (OGCC), on behalf of respondent Clark Development Corp. (CDC) and its president/chief executive officer (CEO) Rufo Colayco, filed an appeal with the National Labor Relations Commission (NLRC) via a Memorandum of Appeal verified and certified by Hilana Timbol-Roman, the executive vice president of respondent CDC.

Timbol-Roman and OGCC lawyer Roy Christian Mallari also executed a Joint Affidavit of Declaration, where they swore that they were the “respective authorized representative and counsel” of the respondent corporation. The petitioner opposed the appeal on the ground that the Memorandum of Appeal and Joint Affidavit were not accompanied by a board resolution from respondent’s board of directors authorizing either Timbol-Roman or Atty. Mallare, or both, to pursue the case or to file the appeal on behalf of respondent. Is there merit to the opposition?

Ruling: Yes.

It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against forum-shopping by the parties-in-interest themselves. In the case at bar, the parties-in-interest are petitioner Salenga, as the employee, and respondent Clark Development Corp. as the employer.

A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws. The power of a corporation to sue and be sued is exercised by the board of directors. The physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board. The purpose of verification is to secure an assurance that the allegations in the pleading are true and correct and have been filed in good faith.

Thus, we agree with petitioner that, absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of respondent corporation, may be considered as the “appellant” and “employer” referred to by Rule VI, Sections 4 to 6 of the NLRC Rules of Procedure.

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We cannot agree with the OGCC’s attempt to downplay this procedural flaw by claiming that, as the statutorily assigned counsel for GOCCs, it does not need such authorization. In Constantino-David v. Pangandaman-Gania, 456 Phil. 273, 294-298 (2003), we exhaustively explained why it was necessary for government agencies or instrumentalities to execute the verification and the certification against forum-shopping through their duly authorized representatives. (Antonio P. Salenga and NLRC vs. Court of Appeals and Clark Development Corp., G.R. No. 74941, Feb. 1, 2012).

(Almirante is a former labor arbiter.)