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  • NAFLU V Ople

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    Jas De Guzman
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    The National Federation of Labor Union filed a case against Lawman Industrial/Libra Garments/Dolphin Enterprises regarding unfair labor practices. Lawman closed its factory and transferred its machines and hired new workers under different company names to avoid its obligations under the collective bargaining agreement. The court ruled that the veil of corporate fiction should be pierced, as Lawman deliberately used different company names to evade its financial obligations to employees. When a company uses the corporate entity to perpetrate fraud or confuse issues, like the employer-employee relationship here, the separate corporate entity will be disregarded. The employees of the original company, Lawman, were ordered to be reinstated under the real entity, Libra Garments.

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    Corporation Law

    Original Title

    NAFLU v Ople

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    The National Federation of Labor Union filed a case against Lawman Industrial/Libra Garments/Dolphin Enterprises regarding unfair labor practices. Lawman closed its factory and transferred its machines and hired new workers under different company names to avoid its obligations under the collective bargaining agreement. The court ruled that the veil of corporate fiction should be pierced, as Lawman deliberately used different company names to evade its financial obligations to employees. When a company uses the corporate entity to perpetrate fraud or confuse issues, like the employer-employee relationship here, the separate corporate entity will be disregarded. The employees of the original company, Lawman, were ordered to be reinstated under the real entity, Libra Garments.

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    © All Rights Reserved
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    437 views1 page

    NAFLU V Ople

    Uploaded by

    Jas De Guzman
    The National Federation of Labor Union filed a case against Lawman Industrial/Libra Garments/Dolphin Enterprises regarding unfair labor practices. Lawman closed its factory and transferred its machines and hired new workers under different company names to avoid its obligations under the collective bargaining agreement. The court ruled that the veil of corporate fiction should be pierced, as Lawman deliberately used different company names to evade its financial obligations to employees. When a company uses the corporate entity to perpetrate fraud or confuse issues, like the employer-employee relationship here, the separate corporate entity will be disregarded. The employees of the original company, Lawman, were ordered to be reinstated under the real entity, Libra Garments.

    Copyright:

    © All Rights Reserved
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    of 1

    37.

    ) National Federation of Labor Union v Ople  It is obvious from the above findings that Libra seeks the protective shield
    G.R. No. L-68661 | July 22, 1986 of corporate fiction to achieve an illegal purpose. This veil should be
    JDG pierced as it was deliberately and maliciously designed to evade Lawman’s
    Topic: The corporate entity; Disregarding the separate corporate entity financial obligations to its employees.
    Petitioners: National Federation of Labor Union (NAFLU) and Teresita Lorenzo, et al.  When the veil of corporate fiction is made as a shield to perpetrate a fraud
    Respondents: Hon. Minister Blas Ople and Lawman Industrial/Libra or to confuse legitimate issues (here, the relation of employer-employee),
    Garments/Dolphin Enterprises the same should be pierced.
    Ponente: Gutierrez Jr., J.

    FACTS

     NAFLU was the designated exclusive bargaining agent for the employees of
    LAWMAN Industrial
     Collective bargaining negotiations between NAFLU and Lawman happened
    between October 1981 and January 1982.
     NAFLU declared a strike after Lawman refused to grant substantial economic
    demands to its workers. The strike was ended in the same month through
    efforts of the Bureau of Labor Relations.
     Lawman agreed to increase wages by one peso for 3 consecutive years; grant
    vacation leave, sick leave, and other fringe benefits. This CBA was supposed to
    take effect in September 1982.
     August 1982 – Lawman commenced a partial shutdown of its operations.
    o It hauled its machines out from its factory to a different location in
    Malabon, where it operated under the name LIBRA Garments. It also
    hired new workers.
    o When the Lawman employees discovered this, Libra changed its
    name to DOLPHIN Garments.
     NAFLU filed a request for conciliation before the Bureau of Labor Relations,
    requesting the Bureau to intervene in their dispute with Lawman over certain
    money claims, the non-implementation of the CBA, and the establishment of a
    runaway shop to bust the union.
     Lawman unilaterally declared a temporary shutdown but promised its
    employees that normal operations will resume in Jan. 1983
     NAFLU filed a notice of strike, after all efforts to mediate the charge of unfair
    labor practice and money claims have failed. Lawman offered to pay P200,000
    as complete settlement of all claims plus separation pay. NAFLU rejected the
    offer as it would be tantamount to accepting the separation of its members
    from the company. Conciliation efforts proved futile.
     NAFLU filed before the NLRC an unfair labor practice complaint against
    Lawman.

    ISSUE
    Whether the employees of Lawman should be reinstated to their former positions
    (YES)

    RULING
     Veil of corporate fiction must be pierced; Libra must reinstate lawman’s
    workers

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