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NAFLU VS OPLE

QUICKIE: lawman company bargained in bad faith with the union pending the negotiation of their collective
agreement the company declared a temporary cessation of its operations which in reality wa san illegal lockout.
Evidently, the company also maintained run-away shop when it started transferring its machine first to Libra
and then to Dolphin Garments. Failure on the part of the company to comply with the requirements of notice
and due process to the employees and the Labor Ministry one month before the intended 'closure' of the firm is
clearly against the law that even after the alleged 'shutdown' the company was still operating in the name of
Lawman Industrial although production was being carried out by another firm called Libra Garments
(laterDolphin Garments). When the company declared in its position paper dated May 20, 1983 that all the
machines of Lawman had been repossessed by the owner, Pioneer Texturizing Corporation, it admitted the fact
that it has violated the 17 March Order of this Office enjoining any encumbrance or transfer of the properties of
Lawman without prior clearance from this Office. The evident bad faith, fraud and deceit committed by the
company to the prejudice of both the union and the employees who have existing wage claims, some of which
are due for execution, leads us to affirm the union's position that the veil of corporate fiction should be pierced
in order to safeguard the right to self-organization and certain vested rights which had accrued in favor of the
union DOCTRINE: veil of corporation fiction may be pierced to safeguard the right to self organization and
certain vested rights which had accrued in favor of the union. corporation cannot use the corporate fiction to
achieve an illegal purpose DOCTRINE: alter ego ung dolphin tska libra garments. Hence, pierce.

FACTS:In 1982, NAFLU filed a request for conciliation before the Bureau of Labor relations requesting for the
intervention in its dispute with management involving certain money claims, refusal to conclude a collective
agreement after such has been negotiated and run-away shop undertaken by management in order to bust the
union.in the course of proceedings, management unilaterally declared a temporary shutdown on September 15
1982. Management of Lawman Industrial promised the union that it will start the normalization of operation
effective January 1983october 1982, union filed its notice of strike November 1928, firm offered 200k as
complete settlement of claims inclusive of separation pay. Union rejected the offer dec 1982 union filed a
complaint for unfair labor practice (pending) Jan 6 1983. Company had failed to resume operations alleging
poor business conditions march 15 1983, period of shutdown expired. however, it was extended w/o notifying
the bureau company alleged that it had no more plant and building because they were allegedly repossessed by
the Pioneer texturizing Corporation(so basically, sinasabi nila na justified ung shut down, since wala na silang
properties)(eto naman on the other hand position paper nung NAFLU, it was made jun 6 1983bale, eto ung
version nila ng facts)in 1982, management refused to grant substantial economic demands of the workers. hence
the union declared strike in July 1982. the strike was settled.(so nasettle ung strike dahil dito)the management
agreed as follows:Wage increase, Pl.00 for the first year; Pl.00 for the second year and P1.00 for the third year
of the contract. Vacation and sick leaves were also granted and other fringe benefits. The collective bargaining
agreement was supposed to be effective September 1982.BUT, actual partial shutdown began in august
1982.(so ineevade nila ung agreeement nila)it appears that at night, machines were dismantled, hauled out and
then installed at no.43 engineeringroad, araneta university compound, Malabon, Metro Manila and the name of
Lawman was changed to Libra Garments.(etong process na to ata ung run-away shop )when this was
discovered by the workers libra garments changed its name to Dolphin garments(flow of change of name
Lawman - Libra - Dolphin)on march 17 1983, minister of labor of employment, issued an order....lawman is
hereby enjoined to transfer ownership of existing assets in favor of third parties, and theyare ordered to reinstate
the workers(para clear lang, march 20 1983, nag declare ung lawman na narepossess na nung pioneer
textingcorporation ung assets nila, therefore clear violation nung order of march 17 1983 to cease
transferringassets)public respondent modified their order (eto ung pertinent modfications)order - directed the
private respondent to pay all claims (tinanggal nila ung order to reinstate)

ISSUE: public respondents order of not reinstating the workers

HELD:It is very obvious from the above findings that the second corporation seeks the protective shield of a
corporate fiction to achieve an illegal purpose. Thus, as Lawman Industrial Corporation was guilty of unfair
labor practice, the public respondent's order for reinstatement should follow as a matter of right After finding
that Lawman Industrial Corporation had transferred its business operations to Libra Garments Enterprises,
which later changed its name to Dolphin Garments Enterprises, the public respondent cannot deny reinstatement
to the petitioners simply because Lawman Industrial Corporation has ceased its operations. As Libra/Dolphin
Garments is but an alter-ego of the old employer, Lawman Industrial, the former must bear the consequences of
the latter's unfair acts by reinstating the petitioners to their former positions without loss of seniority rights The
private respondent is ordered to reinstate the petitioners to positions in LIBRA/DOLPHINGARMENTS with
back wages of not more than three (3) years each and without loss of seniority rights and benefits being enjoyed
by them prior to the alleged closure of Lawman's Industrial Corporation.