Case Digest (G.R. No. 193136)
Facts:
In ABS-CBN Broadcasting Corporation v. Honorado C. Hilario (substituted by Gloria Z. Hilario) and Dindo B. Banting, G.R. No. 193136, July 10, 2019, the Supreme Court First Division, Carandang, J., writing for the Court, resolved a labor dispute arising from the closure of Creative Creatures, Inc. (CCI) and the termination of two of its employees.
ABS-CBN (petitioner) is a broadcasting corporation that initially operated an internal Scenic Department to design and construct sets and props, but in 1995 outsourced those functions to a newly formed corporation, Creative Creatures, Inc. (CCI), organized by Edmund Ty together with several officers and major shareholders of ABS-CBN. CCI performed scenic services largely for ABS-CBN; respondents Honorato C. Hilario and Dindo B. Banting were hired by CCI in 1995 and 1999 respectively and rose to supervisory positions. In June 2003 Ty retired and entered into a consultancy agreement with ABS-CBN; CCI's board decided to shorten its corporate term and cease operations effective October 5, 2003. In August 2003 Ty incorporated Dream Weaver Visual Exponents, Inc. (DWVEI), which ABS-CBN later engaged.
On September 4–5, 2003 respondents received written notices that CCI would cease operations effective October 5, 2003. They received separation pay and executed individual quitclaims (Honorato: P118,205.87; Banting: P66,383.54). Nonetheless, on September 24, 2003 respondents filed a complaint for illegal dismissal and other claims against CCI and ABS-CBN before the National Labor Relations Commission (NLRC), docketed NLRC-NCR Case No. 00-09-11214-03, alleging the closure was a sham to circumvent labor protections and that operations continued under DWVEI.
The Labor Arbiter (LA) issued a Decision dated March 1, 2006 finding the dismissal illegal, holding that the closure was a stratagem to defeat security of tenure, and ordering CCI and ABS-CBN jointly and severally to reinstate respondents with full backwages (LA denied an order for immediate reinstatement pending appeal on August 9, 2006). The NLRC, in a Decision dated June 30, 2008, affirmed the LA, directed immediate reinstatement by ABS-CBN and likewise held the two entities jointly and severally liable. ABS-CBN appealed to the Court of Appeals (CA).
The CA, in a Decision dated March 4, 2010, affirmed the finding of illegal dismissal but modified the remedy by ordering that amounts respondents received by way of quitclaims be deducted from their monetary award computed from Octobe...(Subscriber-Only)
Issues:
- Was the termination of respondents by reason of CCI’s alleged cessation of business operations valid and bona fide under the Labor Code?
- Should ABS-CBN be held jointly and severally liable with CCI for respondents’ illegal dismissal (i.e., should the corporate veil be pierced)?
- Is reinstatement of respondents proper and viable, or should an alt...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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