Sunio vs. NLRC [GR no.

L-57767, January 31, 1984]

Nature: Special Civil Action for certiorari and prohibition with preliminary injunction to review the resolution of the
NLRC.
Facts:
On July 30, 1973, EM Ramos & Company, Inc. (EMRACO) and Cabugao Ice Plant, Inc. (CIPI), sold an ice plant to
Rizal Development and Finance Corporation (RDFC). With a mortgage in favor of EMRACO-CIPi to secure the
payment of the balance of the purchase price. By virtue of that sale, EMRACO-CIPI terminated the services of all their
employees and paid them their separation pay. RDFC hired its own employees and operated the plant.
Months thereafter, RDFC sold the ice plant to petitioner, ILOCOS COMMERCIAL CORP. (ICC), headed by its
president and General manager, Petitioner Alberto Sunio. Petitioner also hired their own employees as private
respondent were no longer in the plant. The sale was subject to the mortgage in favor of EMRACO-CIPI.
Both RDFC-ICC failed to pay the balance of the purchase price. Subsequently, EMRACO-CIPI instituted extra judicial
foreclosure proceedings.
The properties were sold at public auction and the highest bidder being EMRACO-CIPI. Then EMRACO-CIPI sold the
ice plant to NILO VILLANUEVA, subject to right of redemption of RDFC. NILO rehired then private respondents.
RDFC redeemed the ice plant and EMRACO-CIPI unable to turn over possession to RDFC which made the latter to
file a recovery of possession against EMRACO-CIPI with the CFI.
CFI ordered placing RDFC in possession of the ice plant. EMRACO-CIPI appealed to CA which denied the petition for
lack of merit.
RDFC and Petitioners finally obtained possession of the ice plant. Which also ordered defendants or any person found
in the premises to vacate and surrender the property in litigation. Petitioner did not re-employ private respondent.
PRIVATE RESPONDENTs filed complaints against petitioners for illegal dismissal with the Regional Office, Ministry
of Labor and Employment.
REGIONAL DIRECTORS DECISION: ICC and alberto sunio are directed to reinstate the complainants to their
former positions without loss of seniority privilege and to pay their backwages .
Sunio appealed to NLRC.
NLRCs Decision: affirmed the Regional Directors decision and dismissed the appeal for lack of merit. Reason: when
the RDFC took possession of the property and private respondents were terminated in 1973 the latter already had a vested
right to their security of tenure and when they were rehired those rights continued.
Hence this petition before SC.
ISSUE: WHETHER PUBLIC RESPONDENT ACT WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN ORDERING THE REINSTATEMENT OF PRIVATE RESPONDENTS AND THE PAYMENT OF
THEIR BACKWAGES?
RULING: YES.
While a change of ownership or management is not a valid cause for termination of employment this rule does not
apply where petitioner company took over ownership of a business after the respondents had already accepted their
separation pay from erstwhile owner of business without protest.
It cannot be justifiably said that the plant together with its staff and personnel from one ownership to another. No
succession of employment rights and obligations can be said to have taken place between EMRACO-CIPIVILLANUEVA, on one hand, and petitioners on the other.
Petitioners eventually acquired possession by virtue of the exercise of their right of redemption and of a mandatory
injunction in their favor which ordered Villanueva and any person found in the premises to vacate. What is more,
when EMRACO-CIPI sold ice plant to RDFC in 1973, private respondents employment was terminated by EmracoCipi and they were given their separation pay.
During the 13 months, RDFC and petitioners were in possession and operating the plant and hired their own
employees, not the private respondents.
Further, Villanueva rehired private respondents which are subject to a resolutory condition. The condition having
arisen, the rights of private respondents who claim under him must be deemed to have also ceased.
Private respondents can neither successfully invoke security of tenure in their favor. Their tenure should not be
reckoned from 1967 because they were already terminated in 1973.
Private respondents were only rehired in 1974 by Villanueva.
Petitioners took over by judicial process in 1978 so that private respondents had actually only four years of rehired
employment with Villanueva, during which period, petitioners fought hard against Villanueva to recover possession of
the plant.
Insofar as petitioners are concerned, there was n tenurial security to speak of that would entitle would entitle private
respondents to reinstatement and backwages.