G.R. No. L-44493 & L-44494 December 3, 1980
DIATAGON LABOR FEDERATION LOCAL 110 OF THE ULGWP, petitioner, vs. HON. BLAS F. OPLE, Secretary of Labor, CARMELO C. NORIEL, Director of Labor Relations, MINDANAO ASSOCIATION OF TRADE UNIONS (MATU) LIANGA BAY LOGGING CO., INC. and GEORGIA PACIFIC INTERNATIONAL CORPORATION, respondents.

FACTS

Lianga Bay Logging Co., Inc. (Lianga) and Georgia Pacific International Corporation (Georgia) are distinct corporate entities. Diatagon Labor Federation (Diatagon) had a collective bargaining agreement (CBA) with Lianga set to expire in March 1975. Before its expiration, a rival union, Mindanao Association of Trade Unions (MATU), filed a petition for a certification election among Lianga’s employees. Subsequently, Diatagon successfully negotiated a new CBA with Georgia, effective March 1975, which covered 236 workers who had been transferred from Lianga to Georgia in July 1974. Despite the transfer, these 236 employees continued using Lianga’s pay envelopes and identification cards in 1975.
A certification election was held at Lianga in July 1975, from which the 236 Georgia employees were excluded. Diatagon won. MATU protested, arguing the excluded workers should have voted, contending the two companies constituted a single bargaining unit due to alleged common management and the use of common payroll materials. The Director of Labor Relations upheld MATU’s position, ordering the two companies treated as one unit. Diatagon appealed to the Secretary of Labor, who affirmed the Director’s order. Diatagon then elevated the case to the Supreme Court via certiorari.

ISSUE

The primary issue is whether Lianga Bay Logging Co., Inc. and Georgia Pacific International Corporation should be considered a single bargaining unit, thereby requiring the inclusion of Georgia’s 236 transferred employees in Lianga’s certification election.

RULING

The Supreme Court reversed the orders of the Secretary of Labor and the Director of Labor Relations. The legal logic rests on the doctrine of separate corporate personality and the criteria for determining an appropriate bargaining unit. The Court found no substantial evidence to justify piercing the corporate veil and treating the two companies as one. They are legally distinct corporations with separate incorporations, licenses, and operations. The mere fact that the 236 transferred employees temporarily used Lianga’s old pay envelopes and IDs in 1975, after their formal transfer to Georgia’s payroll in 1974, was an insufficient basis to conclude the companies had a single employer identity or common business operations. This circumstance did not override the established fact of separate employment.
Consequently, the 236 employees were legally under Georgia Pacific’s employ and covered by its valid CBA with Diatagon. They formed a separate bargaining unit from Lianga’s employees. Including them in Lianga’s certification election would violate the principle of community of interests, as their employment terms and conditions were already governed by a separate agreement with a different employer. The Court ordered a new certification election to be conducted at Lianga Bay Logging Co., Inc., excluding the employees of Georgia Pacific International Corporation.