G.R. No. 196816, 21 November 2016
Respondent filed for a petition for a certification election to represent all the rank and file employees of Petitioner’s Super Lamination Services.
Petitioner moves that the same must be dismissed as a majority of the persons who were enumerated in the list of members and officers of Union A were not its employees, but were employed by either Express Lamination or Express Coat.
Respondent claimed that while the questioned employees might have been assigned to perform work at the other companies, they were all under one management’s direct control and supervision.
The Med-Arbiter ruled in favor of the Petitioner but was overturned by the DOLE whose ruling was later affirmed by the CA.
The DOLE found that Super Lamination, Express Lamination, and Express Coat were sister companies that had a common human resource department responsible for hiring and disciplining the employees of the three companies. The same department was found to have also given them daily instructions on how to go about their work and where to report for work. It also found that the three companies involved constantly rotated their workers, and that the latter’s identification cards had only one signatory. To the DOLE, these circumstances showed that the companies were engaged in a work-pooling scheme, in light of which they might be considered as one and the same entity for the purpose of determining the appropriate bargaining unit in a certification election.
Was piercing of the corporate veil applicable in this case?
Yes, it was applicable.
A settled formulation of the doctrine of piercing the corporate veil is that when two business enterprises are owned, conducted, and controlled by the same parties, both law and equity will, when necessary to protect the rights of third parties, disregard the legal fiction that these two entities are distinct and treat them as identical or as one and the same.
Super Lamination, Express Lamination, and Express Coat are under the control and management of the same party – petitioner Ang Lee. In effect, the employees of these three companies have petitioner as their common employer, as shown by the following facts:1. Super Lamination, Express Lamination, and Express Coat were engaged in the same business of providing lamination services to the public as admitted by petitioner in his petition. 2. The three establishments operated and hired employees through a common human resource department as found by DOLE in a clarificatory hearing. Though it was not clear which company the human resource department was officially attached to, petitioner admits in his petition that such department was shared by the three companies for purposes of convenience. 3. The workers of all three companies were constantly rotated and periodically assigned to Super Lamination or Express Lamination or Express Coat to perform the same or similar tasks. This finding was further affirmed when petitioner admitted in his petition before us that the Super Lamination had entered into a work-pooling agreement with the two other companies and shared a number of their employees. 4. DOLE found and the CA affirmed that the common human resource department imposed
disciplinary sanctions and directed the daily performance of all the members of Unions A, B, and . 5. Super Lamination included in its payroll and SSS registration not just its own employees, but also the supposed employees of Express Lamination and Express Coat. This much was admitted by petitioner in his Motion to Dismiss which was affirmed by the Med-Arbiter in the latter’s Order. 6. Petitioner admitted that Super Lamination had issued and signed the identification cards of employees who were actually working for Express Lamination and Express Coat. 7. Super Lamination, Express Lamination, and Express Coat were represented by the same counsel who interposed the same arguments in their motions before the Med-Arbiters and DOLE.
We hold that if we allow petitioner and the two other companies to continue obstructing the holding of the election in this manner, their employees and their respective unions will never have a chance to choose their bargaining representative. We take note that all three establishments were unorganized. That is, no union therein was ever duly recognized or certified as a bargaining representative.
Therefore, it is only proper that, in order to safeguard the right of the workers and Unions A, B, and C to engage in collective bargaining, the corporate veil of Express Lamination and Express Coat must be pierced.
*Case digest by Roger Angielo V. Atenta, JD-IV, Andres Bonifacio College, SY 2019-2020