Sudden dismissal

I have been a production operator in Company X since 2019. In 2021, Company X changed its name to Company Y. A few weeks after, I was suddenly prohibited from entering the office compound because according to the security guard, Company X was bought by Company Y during the Covid-19 pandemic, Company X no longer existed, and Company Y is a new corporation. When I called the HR Department to ask if I can still report for work, the HR Officer said Company Y is a different corporation now from Company X, and Company Y is not hiring me and I am not its employee. However, Company Y is using the exact same work premises and continuing the exact same business of Company X and I learned that my other co-workers continued to work under Company Y without executing new employment contracts. In fact, I was still working with the company when it already changed its name to Company Y. I did not receive any separation pay or any notice that my employment was being terminated. Do I have grounds to file an illegal dismissal case against the allegedly new Company Y? Rachel

Dear Rachel,

Based on your narration, you continued working even when your employer changed its name from Company X to Company Y; you were only prohibited from reporting for work a few weeks after the change of name; and you did not receive any notice nor separation pay when your employment ceased.

Subject to proof that there was an actual sale of Company X’s business and assets to Company Y and that Company Y is an entity separate and distinct from Company X, it appears that what happened in your case is that there was only a simple change of corporate name from Company X to Company Y.

As ruled by the Supreme Court, a mere change in the corporate name is not considered under the law as the creation of a new corporation. A simple change in the corporate name has no effect on the identity of the corporation, or on its property, rights, or liabilities. In the case of Company X, when it changed its name to Company Y, such act did not make it a new corporation — it is still the same corporation, only with a different name. Thus, Company X may be sued in its new name, Company Y.

In view of the foregoing, contrary to Company Y’s claims, it appears that Company Y is still your employer, thus, it has the burden to prove that the cessation of your employment was valid. Otherwise, you may have a cause of action against Company Y, and Company Y may be held liable for constructive dismissal if it indeed prevented you from reporting for work without just or authorized cause and without due process in the termination of employment.

(Rodel F. Bantogon vs. PVC Master Mfg. Corp., G.R. 239433, 16 September 2020). Atty. Kathy Larios