G.R. No. 193816 November 21, 2016
Erson Ang Lee Doing Business as “Super Lamination Services,” Petitioner vs. Samahang Manggagawa ng Super Lamination (SMSLS-NAFLU-KMU), Respondent

FACTS

Petitioner Erson Ang Lee operates Super Lamination Services, a sole proprietorship. Separate petitions for certification election were filed by three unions seeking to represent the rank-and-file employees of Super Lamination, Express Lamination Services, Inc., and Express Coat Enterprises, Inc. The companies, represented by common counsel, moved to dismiss the petitions, each claiming the union members were not their employees but were employed by one of the other two entities. The DOLE Med-Arbiters denied all petitions, finding no employer-employee relationship.
On consolidated appeal, the DOLE Secretary reversed the Med-Arbiters’ orders. It found the three companies were sister companies engaged in a work-pooling scheme. They shared a common human resource department responsible for hiring, disciplining, and giving daily work instructions to all employees. Workers were constantly rotated among the three companies, and their identification cards bore a single signatory. DOLE applied the concept of multi-employer bargaining, treating the rank-and-file employees of all three companies as a single bargaining unit, and ordered a certification election. The Court of Appeals affirmed this decision.

ISSUE

Whether the Department of Labor and Employment correctly ordered the conduct of a certification election for a single bargaining unit comprising the rank-and-file employees of three separate corporate entities.

RULING

Yes. The Supreme Court affirmed the decisions of the DOLE and the Court of Appeals. The legal logic rests on the application of the “single employer” or “alter ego” doctrine in labor relations, which pierces the veil of corporate fiction to prevent injustice and ensure the effective exercise of workers’ right to self-organization.
The Court found that Super Lamination, Express Lamination, and Express Coat, while legally distinct, operated as a single business enterprise. The evidence established interlocking operations, a unified management and control system through a common HR department, and a work-pooling arrangement where employees were interchangeably assigned. This setup rendered the separate corporate identities merely formalistic for labor purposes. To allow these entities to evade collective bargaining by hiding behind their separate juridical personalities would defeat the constitutional policy to promote unionism. Consequently, for the purpose of determining an appropriate bargaining unit, the three companies were treated as a single employer. The DOLE Secretary correctly exercised his administrative expertise in recognizing this single bargaining unit and ordering a certification election, a procedural tool to ascertain the employees’ sole and exclusive bargaining agent.