G.R. No. 96490 February 3, 1992 INDOPHIL TEXTILE MILL OR!ER" #NION$PTG O, petitioner, vs.

%OL#NT&R' &R(ITR&TOR TEODORI)O P. )&LI)& a*+ INDOPHIL TEXTILE MILL", IN)., respondents. Parties Petitioner Indophil Textile Mill Workers Union-PTGWO is a legitimate labor organization d l! registered "ith the #epartment o$ %abor and &mplo!ment and the ex'l sive bargaining agent o$ all the rank-and-$ile emplo!ees o$ Indophil Textile Mills, In'orporated. (espondent Teodori'o P. )ali'a is impleaded in his o$$i'ial 'apa'it! as the *ol ntar! +rbitrator o$ the ,ational )on'iliation and Mediation -oard o$ the #epartment o$ %abor and &mplo!ment, "hile private respondent Indophil Textile Mills, In'. is a 'orporation engaged in the man $a't re, sale and export o$ !arns o$ vario s 'o nts and kinds and o$ materials o$ kindred 'hara'ter and has its plants at -arrio %ambakin. Marilao, - la'an. .+)T/0 Petitioner Indophil Textile Mill Workers Union-PTGWO and private respondent Indophil Textile Mills, In'. exe' ted a 'olle'tive bargaining agreement. Indophil +'r!li' Man $a't ring )orporation "as $ormed and registered "ith the /e' rities and &x'hange )ommission. / bse1 entl!, +'r!li' applied $or registration "ith the -oard o$ Investments $or in'entives nder the 2345 Omnib s Investments )ode. The appli'ation "as approved on a pre$erred non-pioneer stat s. +'r!li' be'ame operational and hired "orkers a''ording to its o"n 'riteria and standards. The "orkers o$ +'r!li' nionized and a d l! 'erti$ied 'olle'tive bargaining agreement "as exe' ted. + !ear a$ter the "orkers o$ +'r!li' have been nionized and a )-+ exe' ted, the petitioner Indophil Textile Mill Workers UnionPTGWO 'laimed that the plant $a'ilities b ilt and set p b! +'r!li' sho ld be 'onsidered as an extension or expansion o$ the $a'ilities o$ private respondent Indophil Textile Mills, In'. p rs ant to /e'tion 26'7, +rti'le I o$ the )-+, to "it,. '7 This +greement shall appl! to the )ompan!8s plant $a'ilities and installations and to an! extension and expansion thereat. 6(ollo, p.97 In other "ords, it is the petitioner Indophil Textile Mill Workers Union-PTGWO8s 'ontention that +'r!li' is part o$ the Indophil bargaining nit. The petitioner Indophil Textile Mill Workers Union-PTGWO8s 'ontention "as opposed b! private respondent Indophil Textile Mills, In'. "hi'h s bmits that it is a : ridi'al entit! separate and distin't $rom +'r!li'. The existing impasse led the petitioner Indophil Textile Mill Workers Union-PTGWO and private respondent Indophil Textile Mills, In'. to enter into a s bmission agreement. The parties :ointl! re1 ested the p bli' respondent Teodori'o P. )ali'a to a't as vol ntar! arbitrator in the resol tion o$ the pending labor disp te pertaining to the proper interpretation o$ the )-+ provision. Decision of Voluntary Arbitrator Teodorico P. Calica Where$ore, an a"ard is made to the e$$e't that the proper interpretation and appli'ation o$ /e'. l, 6'7, +rt. I, o$ the 2345 )-+ do 6si'7 not extend to the emplo!ees o$ +'r!li' as an extension or expansion o$ Indophil Textile Mills, In'. The p bli' respondent Teodori'o P. )ali'a thro gh the /oli'itor General arg es that the Indophil +'r!li' Man $a't ring )orporation is not an alter ego or an ad: n't or b siness 'ond it o$ private respondent be'a se it has a separate legitimate b siness p rpose. In addition, the /oli'itor General alleges that the primar! p rpose o$ private respondent is to engage in the b siness o$ man $a't ring !arns o$ vario s 'o nts and kinds and textiles. On the other hand, the primar! p rpose o$ Indophil +'r!li' is to man $a't re, b !, sell at "holesale basis, barter, import, export and other"ise deal in !arns o$ vario s 'o nts and kinds. ;en'e, nlike private respondent, Indophil +'r!li' 'annot man $a't re textiles "hile private respondent 'annot b ! or import !arns. Indophil Textile Mill Workers Union PT!W"#s contention Petitioner notes that the $oregoing eviden'e s $$i'ientl! establish that +'r!li' is b t an extension or expansion o$ private respondent, to "it0 6a7 the t"o 'orporations have their ph!si'al plants, o$$i'es and $a'ilities sit ated in the same 'ompo nd, at -arrio %ambakin, Marilao, - la'an< 6b7 man! o$ private respondent8s o"n ma'hineries, s 'h as d!eing ma'hines, reeling, boiler, =amits s among others, "ere trans$erred to and are no" installed and being sed in the +'r!li' plant< 6'7 the servi'es o$ a n mber o$ nits, departments or se'tions o$ private respondent are provided to +'r!li'< and 6d7 the emplo!ees o$ private respondent are the same persons manning and servi'ing the nits o$ +'r!li'. 6see (ollo, pp. 2>-2?7

Indophil Textile Mills$ Inc.#s contention Private respondent insists that the existen'e o$ a bona$ide b siness relationship bet"een +'r!li' and private respondent is not a proo$ o$ being a single 'orporate entit! be'a se the servi'es "hi'h are s pposedl! provided b! it to +'r!li' are a xiliar! servi'es or a'tivities "hi'h are not reall! essential in the a't al prod 'tion o$ +'r!li'. It also pointed o t that the essential servi'es are dis'harged ex'l sivel! b! +'r!li' personnel nder the 'ontrol and s pervision o$ +'r!li' managers and s pervisors. In s m, petitioner Indophil Textile Mill Workers Union-PTGWO insists that the p bli' respondent Teodori'o P. )ali'a 'ommitted grave ab se o$ dis'retion amo nting to la'k or in ex'ess o$ : risdi'tion in erroneo sl! interpreting the )-+ provision and in $ailing to disregard the 'orporate entit! o$ +'r!li'. I//U&0 W;&T;&( T;& (&/PO,#&,T +(-IT(+TO( T&O#O(I)O P. )+%I)+ &((&# I, I,T&(P(&TI,G /&)TIO, 26'7, +(T I O. T;& )-+ -&TW&&, P&TITIO,&( U,IO, +,# (&/PO,#&,T )OMP+,@ ;&%#0 ,o. Time and again, We stress that the de'isions o$ vol ntar! arbitrators are to be given the highest respe't and a 'ertain meas re o$ $inalit!, b t this is not a hard and $ast r le, it does not pre'l de : di'ial revie" thereo$ "here "ant o$ : risdi'tion, grave ab se o$ dis'retion, violation o$ d e pro'ess, denial o$ s bstantial : sti'e, or erroneo s interpretation o$ the la" "ere bro ght to o r attention. It sho ld be emphasized that in rendering the s b:e't arbitral a"ard, the vol ntar! arbitrator Teodori'o )ali'a, a pro$essor o$ the U.P. +sian %abor &d 'ation )enter, no" the Instit te $or Ind strial (elations, $o nd that the existing la" and : rispr den'e on the matter, s pported the private respondent8s 'ontentions. )ontrar! to petitioner8s assertion, p bli' respondent 'ited $a'ts and the la" pon "hi'h he based the a"ard. ;en'e, p bli' respondent Teodori'o P. )ali'a did not ab se his dis'retion. Under the do'trine o$ pier'ing the veil o$ 'orporate entit!, "hen valid gro nds there$ore exist, the legal $i'tion that a 'orporation is an entit! "ith a : ridi'al personalit! separate and distin't $rom its members or sto'kholders ma! be disregarded. In s 'h 'ases, the 'orporation "ill be 'onsidered as a mere asso'iation o$ persons. The members or sto'kholders o$ the 'orporation "ill be 'onsidered as the 'orporation, that is liabilit! "ill atta'h dire'tl! to the o$$i'ers and sto'kholders. The do'trine applies "hen the 'orporate $i'tion is sed to de$eat p bli' 'onvenien'e, : sti$! "rong, prote't $ra d, or de$end 'rime, or "hen it is made as a shield to 'on$ se the legitimate iss es, or "here a 'orporation is the mere alter ego or b siness 'ond it o$ a person, or "here the 'orporation is so organized and 'ontrolled and its a$$airs are so 'ond 'ted as to make it merel! an instr mentalit!, agen'!, 'ond it or ad: n't o$ another 'orporation. In the 'ase at bar, petitioner seeks to pier'e the veil o$ 'orporate entit! o$ +'r!li', alleging that the 'reation o$ the 'orporation is a devise to evade the appli'ation o$ the )-+ bet"een petitioner Union and private respondent )ompan!. While "e do not dis'o nt the possibilit! o$ the similarities o$ the b sinesses o$ private respondent and +'r!li', neither are "e in'lined to appl! the do'trine invoked b! petitioner in granting the relie$ so ght. The $a't that the b sinesses o$ private respondent Indophil Textile Mills, In'. and +'r!li' are related, that some o$ the emplo!ees o$ the private respondent Indophil Textile Mills, In'. are the same persons manning and providing $or a xilliar! servi'es to the nits o$ +'r!li', and that the ph!si'al plants, o$$i'es and $a'ilities are sit ated in the same 'ompo nd, it is o r 'onsidered opinion that these $a'ts are not s $$i'ient to : sti$! the pier'ing o$ the 'orporate veil o$ +'r!li'. ;en'e, the +'r!li' not being an extension or expansion o$ private respondent Indophil Textile Mills, In'., the rank-and-$ile emplo!ees "orking at +'r!li' sho ld not be re'ognized as part o$, andAor "ithin the s'ope o$ the petitioner Indophil Textile Mill Workers Union-PTGWO, as the bargaining representative o$ private respondent Indophil Textile Mills, In'..