INDOPHIL TEXTILE MILL WORKERS UNION v CALICA G.R. 96490, February 3, 1992 Medialdea, J.

: Facts: Indophil Union is a legitimate labor organization duly registered with the DOLE and the exclusive bargaining unit of all rank and file employees of Indophil Textile Mills. On April 1987, the Union and Indophil excecuted a CBA effective April 1, 1987 to March 31, 1990. On November 1987, Indophil Acrylic was formed and registered with the SEC. In 1998, Acrylic became international and hired workers according to its criteria and standards. Sometime in July 1989, the workers of Acrylic unionize and a duly certified CBA was executed. In 1990, the Union claimed that the plant facilities built and set up by Acyrlic should be considered as an extension or expansion of Indophil pursuant to Sec. 1(c) of Art.1 of the CBA to wit: This agreement shall apply to all companies, facilities, and installations and to any extension and expansion thereat. The union sough that Acrylic be considered part of the bargaining unit. Their contention is that the articles of incorporation of the two corporation establish that the two entities are engaged in the same kind of business, which is the manufacture and sale of yarns of various counts and kinds and of other materials of kindred character or nature. Furthermore, they emphasize that the two corporations have practically the same incorporators, directors and officers. Also the two corporation have their facilities in the same compound. That many of Indophils own machineries such as dyeing machines, reeler, broiler, were transferred to and are now being used by the Acrylic plant. That services of a number of units, departments or sections of private respondents are provided by Acrylic and that the employees of Indophil are the same persons manning and servicing the units of Acrylic. Both parties submitted the issue to LA Calica. Calica ruled for Indophil and stated that Acrylic is not extension of Indophil an hence their CBA does not extend to the employees of Acrylic. Issue: WON Acrylic is a separate and distinct entity from Indophil for purposes of union representation. WON the operations in Acrylic are an extension or expansion of Indophil. Held: Acrylic is not an alter ego or an adjunct or a business conduit of Indophil because it has a separate legitimate business purpose. Indophil engages in the manufacture of yarns while Acrylic is to manufacture, buy, sell at wholesale basis, barter, import, export and otherwise deal in various kinds of yarns. Two corporations cannot be treated as single bargaining unit just because they have related businesses. The Union seeks to pierce the veil of Acrylic alleging that the corporation is a device to evade the application of the CBA. However the CA held that said doctrine is only used on the existence of valid grounds. In the case at bar, the fact that the business of Indophil and Acrylic are related that sometimes the employees of Indophil are the same persons manning and providing for auxiliary services to the units of Acrylic, and that the physical plants, offices, and facilities are situated in the same compound. It is the SCs considered opinion that these facts are not sufficient to justify the piercing of the corporation veil of Acrylic. Furthermore, the legal entity is disregarded only if sought to hold the officers and stockholders liable. In the instant case, the Union does not seek relief from Indophil.