Question:

Are the principal officers of a corporation liable in their personal capacity for non-payment of unpaid wages and other monetary benefits due its employees?

(Bar Examination in Labor Law, 1995)

Suggested Answer:

As a general rule, officers of a corporation are not liable in their personal capacity for non-payment of unpaid wages and other monetary benefits due its employees. This is consistent with the principle that a corporation has its own personality separate and distinct from its stockholders or officers.

The exception is found under the Corporation Code itself. Under the said code, the personal liability of corporate officers validly attaches when:

  1. they assent to a patently unlawful act of the corporation; or
  2. they are guilty of bad faith or gross negligence in directing its affairs; or
  3. they incur conflict of interest, resulting in damages to the corporation, its stockholders or other persons.
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