Doctrine of Piercing the Veil of Corporate Fiction

As you already know, the rule is that a corporation has a juridical personality separate and distinct from that of its stockholders or members. This is known as the Doctrine of Separate Personality. In other words, the personality of a corporation is different from the personality of the people who comprise the corporation. The example mentioned in the lecture notes is about SM and the late Henry Sy. SM is synonymous with Henry Sy and vice versa. But in legal contemplation they are two different persons. The rights and obligations of SM are not the rights and obligations of Sy and vice versa. Thus, if an employee of SM-Baguio Department Store is illegally dismissed from employment he/she must complain against SM not against the Sy Family, even if said family is the controlling stockholder of the corporation. But this separate personality doctrine is subject to an exception. This exception is known as the Doctrine of Piercing the Veil of Corporate Fiction. One case about this doctrine is "ABS-CBN vs. Hilario". This has nothing to do with the recent franchise issue. Rather, this deals with the case of two employees of Creative Creatures, Inc. (CCI). The court ruled that these employees were illegally dismissed and ordered CCI and ABS-CBN jointly and severally (solidary liability) to pay them. Take note that although they were employees of CCI, the Supreme Court said that both CCI and ABS-CBN must pay them.

Following the ABS-CBN case: https://sc.judiciary.gov.ph/6528/

1. What are the reasons given by the Supreme Court in ruling that the two employees were illegally dismissed?

2. Why was ABS-CBN held jointly and severally liable with CCI to pay the two employees?

3. In your own opinion is the Doctrine of Piercing the Veil of Corporate Fiction effective in preventing the use of a corporation as an instrument of fraud committed by the people who comprise it?

4. Cite other instances when the Doctrine of Piercing the Veil of Corporate Fiction may be applied.