INDOPHIL TEXTILE MILL WORKERS UNION PTGWO VS.

CALICA
G.R. No. 124715

FACTS OF THE CASE

Indophil Union is a legitimate labor organization duly registered with the DOLE and the
exclusive bargaining agents of all rank and file employees of Indophil Textile Mills. The Union
and Indhophil executed a CBA. Mean while, Indophil Acrylic Manufacturing Corporation was
formed and registered with the Securities and Exchange Commission. Subsequently. In 1988,
Acrylic became operational and hired workers according to its own criteria and standards.
Sometime in July, 1989, the workers of Acrylic unionized and a duly certified collective
bargaining agreement was executed. In 1990 or a year after the workers of Acrylic have been
unionized and a CBA executed, the petitioner union claimed that the plant facilities built and set
up by Acrylic should be considered as an extension or expansion of the facilities of private
respondent Indophil Company pursuant to Section 1(c), Article I of the CBA, to wit,. c) This
Agreement shall apply to the Company's plant facilities and installations and to any extension
and expansion thereat.
In other words, it is the Union contention that Acrylic is part of the Indophil bargaining unit
because the two entities establish same kind of business which is the manufacture and sale of
yarns
The petitioner's contention was opposed by private respondent which submits that it is a juridical
entity separate and distinct from Acrylic. Voluntary Arbitrator ruled in favor of Indophil.

ISSUE
Whether or not the doctrine of piercing of veil is applicable in this case.

RULING
Acrylic is not an alter ego or a business conduit of Indophil because it has a separate legitimate
business purpose. Indophil engages in the manufacture of yarns while Acrylic os to
manufacture,Buy, sell and wholesale basis and other various kinds of yarns. In the case at bar,the
Union seeks to pierce the veil of corporate entity of Acrylic, alleging that the creation of the
corporation is a devise to evade the application of the CBA between petitioner Union and private
respondent Company.The fact that the businesses of private respondent and Acrylic are
related, that some of the employees of the private respondent are the same persons
manning and providing for auxiliary services to the units of Acrylic, and that the physical
plants, offices and facilities are situated in the same compound, it is our considered opinion
of the SC that these facts are not sufficient to justify the piercing of the corporate veil of
Acrylic.
Hence, the Acrylic not being an extension or expansion of private respondent, the rank-and-file
employees working at Acrylic should not be recognized as part of, and/or within the scope of the
petitioner, as the bargaining representative of private respondent.

Furthermore, the legal ebtity is disregarded only if sought to hold the officers and stockholders
liable. In the instant case, the Union does not seek relief from Indophil.