G.R. No. 96490 . February 3, 1992.
Indophil Textile Mill Workers Union-PTGWO, petitioner, vs. Voluntary Arbitrator Teodorico P. Calica and Indophil Textile Mills, Inc., respondents.

FACTS

Petitioner Indophil Textile Mill Workers Union-PTGWO is the exclusive bargaining agent for the rank-and-file employees of respondent Indophil Textile Mills, Inc. Their Collective Bargaining Agreement (CBA), effective from 1987 to 1990, contained a provision stating it applied to the company’s plant facilities and installations and to “any extension and expansion thereat.” In 1987, Indophil Acrylic Manufacturing Corporation was incorporated. It began operations in 1988, hiring its own workers, who subsequently unionized and executed their own CBA in 1989. In 1990, the petitioner union claimed that Acrylic’s facilities were an extension or expansion of Indophil Textile under the CBA, arguing Acrylic was a device to evade the existing CBA. The company opposed, asserting Acrylic was a separate juridical entity. The dispute was submitted to voluntary arbitration.

ISSUE

Whether Indophil Acrylic Manufacturing Corporation constitutes an extension or expansion of Indophil Textile Mills, Inc., thereby making Acrylic’s employees part of the petitioner union’s bargaining unit under the CBA.

RULING

The Supreme Court denied the petition and affirmed the voluntary arbitrator’s award. The Court held that the corporate veil of Acrylic could not be pierced to treat it as an extension of Indophil Textile. While the businesses were related, some employees provided auxiliary services to both, and the plants were in the same compound, these factors were insufficient to disregard Acrylic’s separate juridical personality. The doctrine of piercing the corporate veil applies when the corporate fiction is used to defeat public convenience, justify wrong, protect fraud, or defend crime, or when the corporation is a mere alter ego. Here, the petitioner sought not to impose a corporate debt on stockholders but to expand bargaining unit coverage, which is not a proper application of the doctrine. Citing Diatagon Labor Federation v. Ople, the Court reiterated that two distinct corporate entities cannot be treated as a single bargaining unit. Consequently, Acrylic was not an extension or expansion under the CBA, and its employees were not part of the petitioner’s bargaining unit. The voluntary arbitrator did not commit grave abuse of discretion in his interpretation.