Case Digest (G.R. No. 224099) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Zambrano et al. v. Philippine Carpet Manufacturing Corporation (G.R. No. 224099, June 21, 2017), the petitioners were rank‐and‐file employees and union officers of Philippine Carpet Manufacturing Corporation (Phil Carpet). On January 3, 2011, Phil Carpet served them written notice that their employment would terminate effective February 3, 2011, citing total cessation of operations due to sustained business losses. The petitioners alleged this was a sham to transfer operations and assets to its wholly owned affiliate, Pacific Carpet Manufacturing Corporation (Pacific Carpet), and constituted illegal dismissal and unfair labor practice against union members. They filed separate complaints before the Labor Arbiter, which were consolidated and dismissed on September 29, 2014. The National Labor Relations Commission affirmed on February 27, 2015, and this was in turn affirmed by the Court of Appeals on January 8, 2016, with a denial of reconsideration on April 11, 2016. The petit Case Digest (G.R. No. 224099) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Background
- Petitioners were regular employees and union officers/members of Philippine Carpet Manufacturing Corporation (Phil Carpet).
- They filed five consolidated complaints for illegal dismissal and unfair labor practice before the NLRC.
- Termination and Petitioners’ Allegations
- On January 3, 2011, Phil Carpet notified petitioners of the termination of their employment effective February 3, 2011 due to cessation of operations allegedly caused by serious business losses.
- Petitioners claimed the closure was a mere pretense to transfer operations—including job orders and machinery—to Phil Carpet’s wholly owned subsidiary, Pacific Carpet Manufacturing Corporation (Pacific Carpet), and to suppress union activity.
- Employer’s Defense and Procedural History
- Phil Carpet relied on SGV-audited financial statements showing losses of P4.1M (2006), P12.8M (2007), P53.28M (2008), P47.79M (2009) and unaudited losses of P26.59M as of October 2010.
- The company implemented cost-cutting measures, closed unprofitable divisions, and adopted a Board resolution to cease operations.
- Phil Carpet served written notices to DOLE and employees one month prior, paid separation benefits, and secured voluntary Release and Quitclaim agreements.
- The Labor Arbiter dismissed the complaints; the NLRC and the Court of Appeals affirmed. Petitioners elevated the case to the Supreme Court under Rule 45.
Issues:
- Whether petitioners were dismissed for a lawful cause under Article 298 of the Labor Code.
- Whether the termination constituted an unfair labor practice under Article 259 of the Labor Code.
- Whether Pacific Carpet may be held liable for Phil Carpet’s obligations by piercing the corporate veil.
- Whether the Quitclaims signed by petitioners are valid and binding.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)