Prince Transport vs. Garcia, January 12, 2011

Facts:
Respondents were hired as drivers, conductors, mechanics or inspectors by   Prince Transport, Inc. (PTI), a company engaged in the business of transporting passengers by land. Respondents received in their regular monthly income and commissions equivalent to 8 to 10% of their wages but was later reduced to 7 to 9%. PTI suspected that respondents plan to form a union which it objected.
 
Respondents formed a union but PTI blocked it and caused the transfer of all union members to one of its sub-companies, Lubas Transport. Later, Lubas operations deteriorated because of PTI refusal to repair the units of Lubas which caused the latter to cease operations and rendered the respondents jobless. Respondents filed a complaint with illegal dismissal,unfair labor practice  and illegal deductions .
The Labor Arbiter rendered a Decision dismissing the complaints for Unfair Labor Practice against PTI for lack of evidence to show that PTI violated respondents’ right to self-organization; non-payment of holiday pay and holiday premium, service incentive leave pay and 13th month pay; and ordered Lubas Transport to pay backwages and separation pay in lieu of reinstatement to respondents. The LA also held that Lubas is a separate entity from PTI and is guilty of illegal dismissal of respondents.
 
Respondents filed a Partial Appeal with the NLRC praying, among others, that PTI should also be held equally liable as Lubas. The CA partially granted the petition by adding the claims of two (2) more complainants and upholding the refund of boundary-hulog of one complainant. The rest of the Labor Arbiter’s decision was sustained.
In a  special civil action for certiorari with the CA , the CA granted the respondent’s petition and reversed the  assailed   Decision and Resolution of the NLRC.  The CA ruled that petitioners are guilty of unfair labor practice; that Lubas is a mere instrumentality, agent conduit or adjunct of PTI; and that petitioners’ act of transferring respondents  to Lubas is indicative of their intent to frustrate the efforts of respondents to organize themselves into a union and ordered reinstatement of the petiitoners to their former positions with full backwages.  Petitioners filed  the instant petition for review on certiorari with the Supreme Court.
 
Issues:
1) Whether PTI is guilty of Unfair Labor Practice;
 2) Whether or not  petitioners Prince Transport, Inc.  and Lubas Transport are one and the same corporation and thus, liable in solidum to respondents.
 
Held:
1) Yes, the PTI is guilty  of unfair labor practice,  by means of transfer of respondent’s transfer of work  assignments to Lubas was designed by petitioners as a subterfuge to foil the former’s right to organize themselves into a union.
 Under Article 248 (a) and (e) of the Labor Code, an employer is guilty of unfair labor practice if it interferes with, restrains or coerces its employees in the exercise of their right to self-organization or if it discriminates in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.
 Evidence of petitioners' unfair labor practice is shown by the established fact that, after respondents' transfer to Lubas, petitioners abandoned  the operations of Lubas by withholding the necessary financial and logistic support such as spare parts and repair and maintenance of the Lubas buses until only two units remained in running condition which left respondents without work. 
2) Yes, by applying the doctrine of piercing the corporate veil, the Court agreed with the CA   that Lubas is a mere agent, conduit or adjunct of PTI.  And since  PTI and Lubas are  one and the same entity; they are  solidarily liable for the payment of backwages and other money claims awarded to the complainants therein.30
WHEREFORE, the instant petition is denied. The assailed Decision and Resolution of the Court of Appeals, dated December 20, 2004 and February 24, 2005, respectively, are AFFIRMED.