Almirante: Change of corporate name

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By Dominador Almirante

Labor case Digest

Saturday, January 4, 2014


PRIVATE respondent Ronaldo V. San Miguel was employed as a checker/customs representative of Zeta Brokerage Corp. (Zeta) since Dec. 15, 1985.

In January 1994, he and other employees of Zeta were informed that Zeta would cease operations and that all affected employees, including him, would be separated from the service effective March 31, 1994. He reluctantly accepted separation pay subject to the outstanding offer to be hired for his former position by the petitioner.

Petitioner Zuellig Freight and Cargo Systems contended that San Miguel’s termination from Zeta had been for a cause authorized by the Labor Code. Zeta, its predecessor-in-interest, had complied with the requirements for termination due to the cessation of business operations. Did this contention find merit?

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The Supreme Court ruling: No.

The unanimous conclusions of the Court of Appeals (CA), the National Labor Relations Commission (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.

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, No. L-86370, July 31, 1970, 34 SCRA 252, 266, citing Pacific Bank v. De Ro, 37 Cal. 538: “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.”

x x x

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 (Zuellig Freight and Cargo Systems vs. National Labor Relations Commission and Ronaldo V. San Miguel, G.R. No. 157900, July 22, 2013).

Published in the Sun.Star Cebu newspaper on January 05, 2014.

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