Azcor Manufacturing Inc. v.
NLRC (1999)
303 SCRA 26
G.R. No. 117963
February 11, 1999
Ponente : JUSTICE BELLOSILLO
FACTS:
Capuslo has worked as a ceramic worker for more than 2 years at AZCOR, receiving a daily wage and
other benefits such as leaves and he is deducted the amount of Php50 from his salary without informing
him of the reason. Capuslo went on sick leave due to bronchial asthma which his work had caused him.
When he went back he was not allowed to continue in his job anymore unless the owner allowed him.
Capuslo filed a complaint for constructive illegal dismissal and illegal deduction with the Labor Arbiter.
Petitioner moved to dismiss the complaint on the ground that there is no employer-employee
relationship between AZCOR and Capsulo which the latter became an employee of Filipina Paso. The
Labor Arbiter dismissed the complaint for lack of merit ordering AZCOR to refund the amount illegally
deducted from his salary. NLRC modified the decision of the Labor Arbiter declaring Capuslo was illegally
dismissed, ordering his reinstatement and payment of back wages.
ISSUE:
WON Petitioners could be held jointly and severally liable to Capuslo for back wages since they are
separate and distinct corporations with different corporate personalities
RULING:
YES. Azcor and Filipina Paso were held jointly and solidarily liable for Capuslo’s back wages.
The doctrine that a corporation is a legal entity or a person in law distinct from the persons composing it
is merely a legal fiction for purposes of convenience and to subserve the ends of justice. This fiction
cannot be extended to a point beyond its reason and policy. Where, as in this case, the corporate fiction
was used as a means to perpetrate a social injustice or as a vehicle to evade obligations or confuse the
legitimate issues, it would be discarded and the two (2) corporations would be merged as one, the first
being merely considered as the instrumentality, agency, conduit or adjunct of the other.
There was much confusion as to the identity of Capulso's employer - whether it was AZCOR or Filipinas
Paso; but, for sure, it was petitioners' own making, as shown by the following: First, Capulso had no
knowledge that he was already working under petitioner Filipinas Paso since he contained to retain his
AZCOR Identification card; Second, his payslips contained the name of AZCOR giving the impression that
AZCOR was paying his salary; Third, he was paid the same salary and he performed the same kind of job,
in the same work area, in the same location, using the same tools and under the same supervisor;
Fourth, there was no gap in his employment as he continued to work from the time he was hired up to
the last day of his work; Fifth, the casting department of AZCOR where Capulso was working was
abolished when he, together with six (6) others, transferred to Filipinas Paso; and Sixth, the employment
contract was signed by an AZCOR personnel officer, which showed that Capulso was being hired from 1
March 1990 to 31 August 1990 by AZCOR to do jobs for Filipinas Paso.
