Case Assignment No. 6 – No.

20 (digested by: jetzon)

Vicmar Development Corporation v. Elarcosa

Facts:

 Respondents Ruben Panes et al, employees of plywood company Vicmar Development

Corporation (Vicmar), filed complaints for illegal dismissal and money claims against
Vicmar with the NLRC.
o They alleged that they were regular employees of Vicmar, but that Vicmar had
reduced their wages and later dismissed them without cause and due process.
o They also alleged that Vicmar's two branches, Top Forest Developers
Incorporated (TFDI) and Greenwood International Industries Incorporated were
the same business, located in the same compound, owned by the same person,
had the same resident manager, administrative department, and personnel and
finance sections.
 Vicmar claimed that the employees were "extra" workers, who were engaged when there
were unexpectedly high demands for plywood products.

ISSUE + RULING
Whether or not the employees were illegally dismissed. YES.

 Respondents provided hiring dates, sections hired to, and dates of termination to establish
that they were regular employees, while Vicmar did not submit any corresponding
documents to refute those of the respondents, giving rise to the presumption that their
presentation would be prejudicial to Vicmar's cause.
 Respondents were also able to show that their activities were necessary to the usual
business of Vicmar, which made them fall under“regular employees” as defined in the
Labor Code.

Whether or not the doctrine of piercing the veil of corporate fiction is applicable in making Vicmar
liable for illegal dismissal, despite some of the employees being under TFDI.YES.

 Vicmar failed to refute the arguments regarding the two corporations having the same
owner and management. All respondents were even employed by the same plant
manager, who signed identification cards for both Vicmar and TFDI.
o Where it appears that business enterprises are owned, conducted and controlled
by the same parties, law and equity will disregard the legal fiction that these
corporations are distinct entities and shall treat them as one.
o This is in order to protect the rights of third persons, as in this case, to safeguard
the rights of respondents.