G.R. No. 193816 - Ang Lee vs. Samahang Manggagawa ng Super Lamination

Case Summary (G.R. No. 193816)

Petitioner’s Position

Petitioner contended that the three entities are legally distinct employers with separate juridical personalities; therefore their employees cannot be aggregated into a single bargaining unit. He asserted lack of employer-employee relationship between certain unions’ claimed members and a particular company, and urged dismissal of the certification election petitions on that ground.

Respondents’ Position

The unions sought certification elections to represent the rank-and-file employees of each establishment. They argued the establishments were unorganized, that the employers could not legitimately oppose the petitions, and that despite assignments to different establishments the workers were under a single management’s control and supervision, warranting treatment as a single bargaining unit.

Key Dates and Procedural History

Petitions for certification elections filed: 7 March 2008 (Unions A, B, C).
DOLE-NCR Mediator-Arbiters: Orders dated 21 and 23 May 2008 denied the petitions for lack of employer-employee relationship.
Appeals consolidated and decided by DOLE Undersecretary (decision directing certification elections and remand): dated 8 May 2009 (administrative decision referenced in the record).
Court of Appeals affirmed DOLE. Petitioner’s motion for reconsideration denied.
Petition for review to the Supreme Court followed; the Supreme Court denied the petition and affirmed the CA and DOLE decisions.

Applicable Law and Constitutional Basis

Because the case decision date falls after 1990, the 1987 Philippine Constitution is the constitutional framework. Relevant legal instruments and doctrines expressly relied upon in the decisions include: the Labor Code (Article 268 cited), the implementing rules on certification elections (definition and employer-employee relationship requirement), DOLE Department Order No. 40-03 (Series of 2003) on multi-employer bargaining, and established jurisprudence on piercing the corporate veil and standards of review for factual findings of administrative labor authorities. The Court also applied settled tests on community of interests for bargaining-unit appropriateness.

Factual Findings Material to Decision

DOLE and the CA found that: (1) the three establishments performed the same business (lamination services) and operated under a common human-resources function that handled hiring, discipline, and daily work direction; (2) workers were routinely rotated among the three establishments and performed similar tasks; (3) identification cards bore a single signatory; (4) Super Lamination included in its payroll and SSS registrations employees who allegedly worked for the other two companies; (5) the three entities were represented by the same counsel and filed coordinated motions that alternately blamed each other for employing the same workers, creating confusion and obstructing the certification process. Petitioner admitted sharing a common HR department and a work-pooling agreement among the companies.

Issues Presented

Whether piercing the corporate veil was warranted to treat the three entities as a single employer for purposes of certification election.
Whether the rank-and-file employees of the three entities constituted an appropriate bargaining unit.

Legal Standards on Piercing the Corporate Veil

The Court reiterated the well-settled doctrine that separate juridical personalities may be disregarded when corporate separateness is used to defeat public convenience, justify wrong, protect fraud, or to frustrate labor rights, or where one entity is an adjunct, conduit, or alter ego of another. The relevant test is whether the enterprises are owned, conducted, and controlled by the same parties and whether disregarding separateness is necessary to protect third-party rights or achieve equity. Prior jurisprudence was cited where veil-piercing was applied in labor contexts to hold related corporations jointly liable or to treat branches and corporations as one for illegal dismissal or back-wage purposes.

Application of Veil-Piercing to the Present Facts

Applying the standards above, the Court found substantial evidence that the three establishments were under the control and management of petitioner and operated as sister companies engaging in a work-pooling scheme. Specific corroborating facts included shared HR functions, worker rotation, common payroll and social insurance listings, shared identification card signatory, petitioner’s admission of a work-pooling agreement, and coordinated defensive litigation tactics that alternately deflected employer status among the entities. The Court characterized these acts as obstructive to employees’ ability to exercise collective bargaining rights and concluded that allowing the corporate fiction to stand would frustrate the workers’ certification process. Accordingly, piercing corporate separateness was deemed proper to protect the employees’ right to organize and bargain collectively.

Legal Standards on Appropriate Bargaining Unit and Community of Interest

The controlling standard for an appropriate bargaining unit is whether the grouping of employees share substantial, mutual interests in wages, hours, working conditions, and other collective-bargaining subjects. Geographic location is not dispositive if communal interests are otherwise preserved. The policy favors the primacy of collective bargaining and, where appropriate, single-employer units or multi-employer bargaining mechanisms may be invoked to promote effective bargaining.

Application to Bargaining-Unit Appropriateness

Given the factual findings that employees were regularly rotated among the three establishments and performed substantially similar duties under common direction and discipline, the Court determined that the rank-and-file employees shared a community of interest sufficient to justify treatment as a single bargaining unit. The rotational assignments and shared employment conditions weighed strongly in favor of aggregation, and the Court found no sacrifice of mutual interests by disregarding distinct geographic or corporate boundaries.

Role of Multi-Employer Bargaining Doctrine

DOLE had applied, by analogy, the concept of multi-employer bargaining under DOLE Department Order No. 40-03 to justify a single certification election for the employees of the three establishments. The Supreme Court recognized the mechanism as

Case Syllabus (G.R. No. 193816)

Procedural Posture

Petitioner filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court to the Supreme Court challenging the Decision and Resolution of the Court of Appeals (CA) which affirmed the Department of Labor and Employment's (DOLE) Decision ordering certification elections.
The DOLE decision (pened by Undersecretary Romeo C. Lagman by authority of the DOLE Secretary) granted consolidated appeals of three unions and directed immediate conduct of certification elections among the rank-and-file employees of Express Lamination Services, Super Lamination Services and Express Coat Enterprises, Inc.
The CA affirmed the DOLE Decision; petitioner filed a Motion for Reconsideration in the CA which was denied before elevating the matter to the Supreme Court.
The Supreme Court, in this petition, denied the petition and affirmed the Decision and Resolution of the Court of Appeals.

Parties and Business Entities

Petitioner: Erson Ang Lee doing business as "Super Lamination Services" (Super Lamination), described in the record as a duly registered entity principally engaged in lamination services; Super Lamination is indicated to be a sole proprietorship under petitioner’s name.
Other establishments concerned: Express Lamination Services, Inc. (Express Lamination) and Express Coat Enterprises, Inc. (Express Coat), each separately registered with the Securities and Exchange Commission (SEC).
Respondent union: Samahan ng mga Manggagawa ng Super Lamination Services (Union A or SMSLSA-NAFLU-KMU), a legitimate labor organization and local chapter affiliate of the National Federation of Labor Unions - Kilusang Mayo Uno (NAFLU-KMU).
Other unions involved: Express Lamination Workers’ Union (Union B / ELWU-NAFLU-KMU) and Samahan ng mga Manggagawa ng Express Coat Enterprises, Inc. (Union C / SMEC-NAFLU-KMU).

Facts as Found and Admitted

On 7 March 2008, Unions A, B, and C each filed separate Petitions for Certification Election to represent all rank-and-file employees of Super Lamination, Express Lamination, and Express Coat respectively.
The three companies, represented by the same counsel, filed Comments and Motions to Dismiss contending lack of employer-employee relationship between each company and the bargaining units the unions sought to represent.
Each company alternately alleged that the majority of names in the unions’ membership lists were employees of one of the other companies rather than their own—leading to reciprocal finger-pointing among the three establishments.
DOLE regional Med-Arbiters initially denied the petitions: on 21 May 2008 petitions of Unions B and C were denied by Med-Arbiter Michael Angelo Parado; on 23 May 2008 Union A’s petition was denied by Med-Arbiter Alma Magdaraog-Alba, all on the ground of no existing employer-employee relationship between the individual companies and the claimed employees.
The appeals of the three unions to the DOLE Secretary were consolidated because the companies alternately referred to one another as the employer of the members of the contested bargaining units.

DOLE’s Findings and Disposition

DOLE (Undersecretary Romeo C. Lagman) GRANTED the consolidated appeals and REVERSED and SET ASIDE the Med-Arbiters’ Orders denying the petitions.
DOLE ordered immediate conduct of certification elections among the rank-and-file employees of Express Lamination Services, Super Lamination Services and Express Coat Enterprises, Inc., after pre-election conferences, and provided voting choices:
- Express Lamination Workers Union-NAFLU-KMU;
- Samahan ng mga Manggagawa ng Super Lamination Services-NAFLU-KMU;
- Samahan ng mga Manggagawa ng Express Coat Enterprises, Inc.-NAFLU-KMU;
- "No Union."
DOLE directed the employers/contending unions to submit, within ten days of receipt of the Decision, a certified list of employees in the bargaining unit or payrolls covering members of the bargaining unit for the last three months prior to the Decision.
DOLE’s factual findings included:
- The three companies were sister companies sharing a common human resource department responsible for hiring, disciplining, giving daily instructions, and directing where employees should report for work.
- The companies constantly rotated workers among themselves and the employees’ identification cards bore only one signatory.
- These circumstances evidenced a work-pooling scheme warranting treatment of the three establishments as one and the same for purposes of determining the appropriate bargaining unit.
DOLE applied the concept of multi-employer bargaining under Sections 5 and 6 of DOLE Department Order 40-03, Series of 2003 to justify creation of a single bargaining unit for the rank-and-file employees of the three companies.

Court of Appeals’ Disposition

The CA affirmed DOLE’s Decision, agreeing that the three companies were sister companies that had adopted a work-pooling scheme and that DOLE correctly applied multi-employer bargaining to treat the three entities as one for purposes of determining the appropriate bargaining unit.

Issues Presented to the Supreme Court

Whether the doctrine of piercing the corporate veil should be applied to treat the three establishments as one employer for purposes of a certification election.
Whether the rank-and-file employees of Super Lamination, Express Lami