Spin-off corporations; collective bargaining agreements

Undeniably, the transformation of the companies is a management prerogative. The business judgment  rule applies and, therefore, courts cannot look into such act unless it is contrary to law, public policy or morals. Neither can there an imputation of any bad faith on the part of the corporation-employer so as to justify the application of the doctrine of piercing the corporate veil.

There is good faith when, ever mindful of the employees' interests, management has assured the concerned employees that they would be absorbed by the new corporations without loss of tenure and retaining their present pay and benefits according to their existing collective bargaining agreements (CBAs). This is especially true if they have been advised that, upon the expiration of the CBAs, new agreements will be negotiated between the management of the new corporations and the bargaining representatives of the employees concerned.

As a result of the spin-offs:

[1] Each of the companies are run by, supervised and controlled by different management teams including separate human resource/personnel managers.
[2] Each company enforces its own administrative and operational rules and policies and are not dependent on each other in their operations.
[3] Each entity maintains separate financial statements and are audited separately from each other. (G.R. No. 111262)

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