Claparols, et. al. v. Court of Industrial Relations, et. al.

, 65 SCRA 613
FACTS:
A complaint for unfair labor practice was filed by herein private respondent Allied
Workers' Association, respondent Demetrio Garlitos and ten (10 respondent workers a!ainst
herein petitioners on account of the dismissal of respondent workers from petitioner "laparols
#teel and $ail %lant& 'n #eptember 1(, 1)(*, respondent "ourt rendered its decision findin!
+,r& "laparols !uilty of union bustin! and+ of havin! +dismissed said complainants because of
their union activities,+ and orderin! respondents +(1 -o cease and desist from committin! unfair
labor practices a!ainst their employees and laborers. (/ -o reinstate said complainants to their
former or e0uivalent 1obs, as soon as possible, with back wa!es from the date of their dismissal
up to their actual reinstatement+& "ounsel for herein respondent workers filed a motion for
e2ecution which was !ranted& 'n 3anuary /*, 1)(4, petitioners filed an opposition alle!in! that
under the circumstances presently en!ulfin! the company, petitioner "laparols could not
personally reinstate respondent workers. that assumin! the workers are entitled to back wa!es,
the same should only be limited to three months pursuant to the court rulin! in the case of #ta&
"ecilia #awmills vs& "56. and that since "laparols #teel "orporation ceased to operate on
December 7, 1)(/, re8employment of respondent workers cannot !o beyond December 7, 1)(/&
'n the other had respondent workers, contended that "laparols #teel and $ail %lant and
"laparols #teel and $ail "orporation are one and the same corporation controlled by petitioner
"laparols, with the latter corporation succeedin! the former&
ISSUE:
Whether or not the amount of back wa!es recoverable by respondent workers from
petitioners should be the amount accruin! up to December 7, 1)(/ when the "laparols #teel
"orporation ceased operations&
RUI!":
9es& 5t is not disputed that "laparols #teel and $ail %lant, which ceased operation of 3une *0,
1)47, was succeeded by the "laparols #teel "orporation effective the ne2t day, 3uly 1, 1)47 up
to December 7, 1)(/& 5t is very clear that the latter corporation was a continuation and successor
of the first entity, and its emer!ence was skillfully timed to avoid the financial liability that
already attached to its predecessor, the "laparols #teel and $ail %lant& :oth predecessors and
successor were owned and controlled by the petitioner ;duardo "laparols and there was no break
in the succession and continuity of the same business& -his +avoidin!8the8liability+ scheme is
very patent, considerin! that )0< of the subscribed shares of stocks of the "laparols #teel
"orporation (the second corporation was owned by respondent (herein petitioner "laparols
himself, and all the assets of the dissolved "laparols #teel and $ail %lant were turned over to the
emer!in! "laparols #teel "orporation& 5t is very obvious that the second corporation seeks the
protective shield of a corporate fiction whose veil in the present case could, and should, be
pierced as it was deliberately and maliciously desi!ned to evade its financial obli!ation to its
employees& =urthermore, the "ourt cited 9utivo > #ons ?ardware "ompany vs& "ourt of -a2
Appeals where it held that when the notion of le!al entity is used to defeat public convenience,
1ustify wron!, protect fraud, or defend crime, the law will re!ard the corporation as an
association or persons, or, in the case of two corporations, will mer!e them into one&