PAMPLONA PLANTATION COMPANY VS TINGHIL, SABIHON, ET.AL
G.R. NO. 159121, February 3, 2005
PANGANIBAN, J.:
“To protect the rights of labor, two corporations with identical directors, management, office and payroll should be treated as one entity only. A suit by the employees against one corporation should be deemed as a suit against the other. Also the rights and claims of workers should not be prejudiced by the acts of the employer that tend to confuse them about its corporate identity. The corporate fiction must yield to truth and justice.”
FACTS:
Sometime in 1993, Pamplona Plantations Company, Inc. (company for brevity) was organized for the purpose of taking over the operations of the coconut and sugar plantation of Hacienda Pamplona located in Pamplona, Negros Oriental. It appears that Hacienda Pamplona was formerly owned by a certain Mr. Bower who had in his employ several agricultural workers.
When the company took over the operation of Hacienda Pamplona in 1993, it did not absorb all the workers of Hacienda Pamplona. Some, however, were hired by the company during harvest season as coconut hookers or ‘sakador,’ coconut filers, coconut haulers, coconut scoopers or ‘lugiteros,’ and charcoal makers.
Sometime in 1995, Pamplona Plantation Leisure Corporation was established for the purpose of engaging in the business of operating tourist resorts, hotels, and inns, with complementary facilities, such as restaurants, bars, boutiques, service shops, entertainment, golf courses, tennis courts, and other land and aquatic sports and leisure facilities.
On 15 December 1996, the Pamplona Plantation Labor Independent Union (PAPLIU) conducted an organizational meeting wherein several employees who are either union members or officers participated in said meeting.
Upon learning that some of the employees attended the said meeting, the manager of the company did not allow them to work anymore in the plantation.
Thereafter, on various dates, the employees filed their respective complaints with the NLRC against the company for unfair labor practice, illegal dismissal, underpayment, overtime pay, premium pay for rest day and holidays, service incentive leave pay, damages, attorney’s fees and 13th month pay.
On 09 October 1997, one of the employees amended his complaint to implead Pamplona Plantation Leisure Corporation.
On August 31, 1998, the Labor Arbiter rendered a decision finding the employees entitled to separation pay.
The company appealed the Labor Arbiter’s decision to the NLRC. The NLRC reversed the Labor Arbiter and ruled that ‘there exist no employer-employee relation between the parties.’
Guided by the fourfold test for determining the existence of an employer-employee relationship, the Court of Appeals held that there exist an employer-employee relationship between the company and the employees. Finding there was a “power to hire,” the appellate court considered the admission of the company that they hired the employees as coconut filers, coconut scoopers, charcoal makers, or as pieceworkers. The fact that the employees were paid by piecework did not mean that they were not employees of the company. Further, the CA ruled that the company necessarily exercised control over the work they performed, since the later were working within the premises of the plantation. According to the CA, the mere existence— not necessarily the actual exercise— of the right to control the manner of doing work sufficed to meet the fourth element of an employer—employee relation.
The Court of Appeals also held that respondents were regular employees, because the tasks they performed were necessary and indispensable to the operation of the company. Since there was no compliance with the twin requirements of a valid and/or authorized cause and of procedural due process, their dismissal was illegal.
ISSUE:
The company contends that since the employees averred that they work in the “golf course” and performed related jobs in the “recreational facilities” of the leisure corporation, it could not be held liable because as a coconut plantation company, it is separate and distinct from the Pamplona Leisure Corporation.
RULING:
The contention of the company is without merit.
An examination of the facts reveals that, for both the coconut plantation and the golf course, there is only one management which the laborers deal with regarding their work. A portion of the plantation (also called Hacienda Pamplona) had actually been converted into a golf course and other recreational facilities. The weekly payrolls issued by the company bore the name “Pamplona Plantation Co., Inc.” It is also a fact that the employees all received their pay from the same person, the managing director of the company. Since the workers were working for a firm known as Pamplona Plantation Co., Inc., the reason they sued their employer through that name was natural and understandable.
True, Pamplona Plantation Co., Inc., and the Pamplona Plantation Leisure Corporation appear to be separate corporate entities. But it is settled that this fiction of law cannot be invoked to further an end subversive of justice.
The principle requiring the piercing of corporate veil mandates courts to see throught the protective shroud that distinguishes one corporation from a seemingly separate one. The corporate mask may be removed and the corporate veil pierced when a corporation is the mere alter ego of another. Where badges of fraud exist, where public convenience is defeated, where a wrong is sought to be justified thereby, or where a separate corporate identity is used to evade financial obligations to employees or to third parties, the notion of separate legal entity should be set aside and the factual truth upheld. When that happens, the corporate character is not necessarily abrogated. It continues for other legitimate objectives. However it may be pierced in any of the instances cited in order to promote substantial justice.
In the present case, the corporations have basically the same incorporators and directors and are headed by the same official. Both use only one office and one payroll and are under one management. In their individual Affidavits, the employees allege that they worked under the supervision and control of the common managing director of both the company and the leisure corporation. Some of the laborers of the plantation also work in the golf course. Thus, the attempt to make the two corporations appear as two separate entities, insofar as the workers are concerned, sould be viewed as a devious but obvious means to defeat the ends of the law. Such a ploy should not be permitted to cloud the truth and perpetrate an injustice.
DISPOSITION:
The Company’s petition for review was DENIED. The Decision of the Court of Appeals was AFFIRMED.
