Lex Rex Ph

ABS-CBN vs. Hilario

July 10, 2019

Facts

Mr. Edmund Ty incorporated CCI to engage in the business of making props for TV programs et al. Honorato and Banting were hired as employees. In June 2003, Ty decided to retire to create his own company – Dream Weaver. In August 2003, Ty dismissed Banting and Honorato and were given separation pays. Both signed quitclaims against CCI.

In Sept 2003, the dismissed employees filed for illegal dismissal against CCI on the ground that they were dismissed in bad faith. Further reason: CCI violated the Labor Code because it’s still operating under the guise of Dreamweaver.

CCI’s defense: It paid separation pay and Banting et al signed quitclaims.

Labor Arbiter favored Banting and Honorato. NLRC affirmed but held that ABS-CBN is jointly liable to Banting et al. 

NLRC affirmed LA and held ABS CBN and CCI jointly and severally liable to pay respondents their backwages and other allowances.

CA argued that ABS CBN and CCI should not be treated as a single entity because there is clear and convincing evidence on record that each has separate corporate personality.

Issue

Should ABS-CBN be held liable for CCI’s dismissal of its employees? Did ABS CBN pierce the corporate veil and did it have control over the terminations of Banting and Honorato?

Ruling

Yes. Because ABS-CBN and CCI are substantially one entity.

How to determine if an entity (corporation or person) has control over another entity (subsidiary corporation)?

  1. The existence of the subsidiary corporation (CCI)  is dependent upon the parent entity (ABS-CBN).
  2. Most personnel of the parent were transferred to the subsidiary.
  3. The subsidiary company was incorporated through the collaboration of its incorporators and that of the parent company.
  4. Parent company exercised influence over the management and closure of the subsidiary.
  5. The incorporator of the subsidiary was employed before as a high-ranking official of the parent company.
  6. Subsidiary was then a mere division of the parent company.

Other Content You May Be Interested In:

Chan vs. Maceda Digest

G.R. 142291https://lawphil.net/judjuris/juri2003/apr2003/gr_142591_2003.html Lesson: If the facts are bereft of any record of the existence of a contract of deposit, oral or written, there is no

Read More »

Life vs Property

The right to life is more sacred than a mere owning a property. That is not to encourage x x x theft, but merely to

Read More »

Rule of Law

A judge must apply the law as it is written, not as he or she wishes it were. – Amy Coney Barrett  Laws must come

Read More »

Silverio v. Republic Digest

MY TITLE Petitioner Silverio underwent sex change CASE TAGS Male and Female in MarriageHomosexuality CITATION  Silverio vs Republic G.R. 174689 | October 22, 2007 ROMMEL JACINTO DANTES SILVERIO,

Read More »

Briones vs. CA

Remedial Law: Plaintiff not expected to comply with the stipulation of venue on the agreement if he sails the validity of the latter. Compliance therewith

Read More »
en_USEnglish