Case Digest (G.R. No. L-43633-34)
Case Digest (G.R. No. L-43633-34)
Facts:
Labor Congress of the Philippines (LCP) for and in Behalf and in Representation of Its Members v. National Labor Relations Commission et al., G.R. No. 116839, July 13, 1998, Supreme Court Third Division, Purisima, J., writing for the Court.The petition was filed by LCP, representing former employees of Lucky Textile Mills, Inc. (Lucky), who were members of the bargaining agent Nagkakaisang Manggagawa sa Lucky - NAFLU (NML-NAFLU). Lucky was a textile manufacturer in Meycauayan, Bulacan; the other private respondents included Family Textile Inc., New World Textile, and Walden Textile Industries, among others.
In late 1990 and early 1991 Lucky suffered severe financial losses attributed to the Gulf Crisis, production slowdown and walkouts. Employees, through NML-NAFLU, staged a strike in February 1991 pressing for implementation of Wage Order No. RB-III-01; the strike lasted about four months and effectively halted production. The Labor Arbiter and later the NLRC adjudged the strike illegal. Lucky sent written notices to DOLE and the union on March 12 and 15, 1991, announcing the intended closure effective April 18, 1991 on account of extreme business adversity.
On June 13, 1991 Lucky and NML-NAFLU executed an agreement acknowledging the closure, the termination of employment effective April 18, 1991, lifting of picket lines, disposition of inventories, payment of separation/retirement pay, and execution of release/quitclaim papers by the workers upon payment. The workers accepted the separation pay and signed releases. Lucky attempted to sell its plant and equipment but ultimately leased them to Family Textile, New World and Walden to meet loan obligations.
The individual petitioners sought reinstatement, alleging union busting and that the three other corporations were conduits to continue Lucky's business while evading obligations; they filed complaints for unfair labor practice, illegal lockout and/or illegal dismissal before the Labor Arbiter. Lucky defended that the closure was a bona fide exercise of management prerogative due to severe losses, that it complied with statutory notice requirements, that it paid separation allowances despite no obligation under Article 283, and that the other corporations were independent lessees.
On April 29, 1993 the Labor Arbiter rendered a decision in favor of Lucky, finding (inter alia) that the closure was a valid exercise of management prerogative, that the union-presented affidavits were self-serving and insufficient to pierce corporate separateness, and that complainants failed to prove unfair labor practice. On February 28, 1994 the NLRC affirmed the Labor Arbiter's decision and dismissed the appeal, explicitly relying on Article 283 of the Labor Code (closure of establishment and reduction of personnel) and records showing that Lucky complied with the one-month notice requirement; it also found the other respondents to be separate and distinct corporations.
With denial of reconsideration by the NLRC, petitioners invoked this Court's review by way of a petition alleging grave abuse of discretion by the NLRC (Rule 45). They contended that the NLRC's factual findings were unsupported by substantial evidence, that quitclaims were invalid as signed under duress and contrary to public policy, and that the other corporations were mere dummies. The Supreme Court resolved the petition.
Issues:
- May petitioners raise, for the first time before the Supreme Court, the contention that the quitclaims written in English were not explained to them and thus invalid?
- Was Lucky’s complete dismissal of its employees a valid exercise of management prerogative under Article 283 of the Labor Code, or was it a pretext for union busting?
- Were Family Textile Inc., New World Textile, and Walden Textile Industries mere alter egos or dummies of Lucky intended to circumvent employer obligations, thus justifying piercing the corporate veil?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)