Professional Documents
Culture Documents
DECISION
As part of the first phase, ETPI, on December 10, 1998, offered to its employees
who had rendered at least fifteen years of service, the Special Retirement
Program, which consisted of the option to voluntarily retire at an earlier age and a
retirement package equivalent to two and a half (2½) months’ salary for every
year of service.12 This offer was initially rejected by the Eastern
Telecommunications Employees’ Union (ETEU), ETPI’s duly recognized
bargaining agent, which threatened to stage a strike. ETPI explained to ETEU
the exact details of the Right-Sizing Program and the Special Retirement
Program and after consultations with ETEU’s members, ETEU agreed to the
implementation of both programs.13 Thus, on February 8, 1999, ETPI re-offered
the Special Retirement Program and the corresponding retirement package to
the one hundred two (102) employees who qualified for the program.14 Of all the
employees who qualified to avail of the program, only Culili rejected the offer.15
Among the departments abolished was the Service Quality Department. The
functions of the Customer Premises Equipment Management Unit, Culili’s unit,
were absorbed by the Business and Consumer Accounts Department. The
abolition of the Service Quality Department rendered the specialized functions of
a Senior Technician unnecessary. As a result, Culili’s position was abolished due
to redundancy and his functions were absorbed by Andre Andrada, another
employee already with the Business and Consumer Accounts Department.17
On March 5, 1999, Culili discovered that his name was omitted in ETPI’s New
Table of Organization. Culili, along with three of his co-employees who were
similarly situated, wrote their union president to protest such omission.18
In a letter dated March 8, 1999, ETPI, through its Assistant Vice President Stella
Garcia, informed Culili of his termination from employment effective April 8, 1999.
The letter reads:
March 8, 1999
To: N. Culili
From: AVP-HRD
------------------------------------------------------------------------------------------
As you are aware, the current economic crisis has adversely affected our
operations and undermined our earlier plans to put in place major work programs
and activities. Because of this, we have to implement a Rightsizing Program in
order to cut administrative/operating costs and to avoid losses. In line with this
program, your employment with the company shall terminate effective at the
close of business hours on April 08, 1999. However, to give you ample time to
look for other employment, provided you have amply turned over your pending
work and settled your accountabilities, you are no longer required to report to
work starting tomorrow. You will be considered on paid leave until April 08, 1999.
You will likewise be paid separation pay in compliance with legal requirements
(see attached), as well as other benefits accruing to you under the law, and the
CBA. We take this opportunity to thank you for your services and wish you well in
your future endeavors.
(Signed)
Stella J. Garcia19
This letter was similar to the memo shown to Culili by the union president weeks
before Culili was dismissed. The memo was dated December 7, 1998, and was
advising him of his dismissal effective January 4, 1999 due to the Right-Sizing
Program ETPI was going to implement to cut costs and avoid losses.20
Culili alleged that neither he nor the Department of Labor and Employment
(DOLE) were formally notified of his termination. Culili claimed that he only found
out about it sometime in March 1999 when Vice President Virgilio Garcia handed
him a copy of the March 8, 1999 letter, after he was barred from entering ETPI’s
premises by its armed security personnel when he tried to report for work.21 Culili
believed that ETPI had already decided to dismiss him even prior to the March 8,
1999 letter as evidenced by the December 7, 1998 version of that letter.
Moreover, Culili asserted that ETPI had contracted out the services he used to
perform to a labor-only contractor which not only proved that his functions had
not become unnecessary, but which also violated their Collective Bargaining
Agreement (CBA) and the Labor Code. Aside from these, Culili also alleged that
he was discriminated against when ETPI offered some of his co-employees an
additional benefit in the form of motorcycles to induce them to avail of the Special
Retirement Program, while he was not.22
ETPI denied singling Culili out for termination. ETPI claimed that while it is true
that they offered the Special Retirement Package to reduce their workforce to a
sustainable level, this was only the first phase of the Right-Sizing Program to
which ETEU agreed. The second phase intended to simplify and streamline the
functions of the departments and employees of ETPI. The abolition of Culili’s
department - the Service Quality Department - and the absorption of its functions
by the Business and Consumer Accounts Department were in line with the
program’s goals as the Business and Consumer Accounts Department was more
economical and versatile and it was flexible enough to handle the limited
functions of the Service Quality Department. ETPI averred that since Culili did
not avail of the Special Retirement Program and his position was subsequently
declared redundant, it had no choice but to terminate Culili.23 Culili, however,
continued to report for work. ETPI said that because there was no more work for
Culili, it was constrained to serve a final notice of termination24 to Culili, which
Culili ignored. ETPI alleged that Culili informed his superiors that he would agree
to his termination if ETPI would give him certain special work tools in addition to
the benefits he was already offered. ETPI claimed that Culili’s counter-offer was
unacceptable as the work tools Culili wanted were worth almost a million pesos.
Thus, on March 26, 1999, ETPI tendered to Culili his final pay check of Eight
Hundred Fifty-Nine Thousand Thirty-Three and 99/100 Pesos (₱859,033.99)
consisting of his basic salary, leaves, 13th month pay and separation pay.25 ETPI
claimed that Culili refused to accept his termination and continued to report for
work.26 ETPI denied hiring outside contractors to perform Culili’s work and denied
offering added incentives to its employees to induce them to retire early. ETPI
also explained that the December 7, 1998 letter was never given to Culili in an
official capacity. ETPI claimed that it really needed to reduce its workforce at that
time and that it had to prepare several letters in advance in the event that none of
the employees avail of the Special Retirement Program. However, ETPI decided
to wait for a favorable response from its employees regarding the Special
Retirement Program instead of terminating them.27
On February 8, 2000, Culili filed a complaint against ETPI and its officers for
illegal dismissal, unfair labor practice, and money claims before the Labor
Arbiter.
On April 30, 2001, the Labor Arbiter rendered a decision finding ETPI guilty of
illegal dismissal and unfair labor practice, to wit:
₱949,699.72
II. Damages
a. Moral………… ₱500,000.00
b. Exemplary…… ₱250,000.00
III. Attorney’s Fees (10% of award) 94,969.97
The Labor Arbiter believed Culili’s claim that ETPI intended to dismiss him even
before his position was declared redundant. He found the December 7, 1998
letter to be a telling sign of this intention. The Labor Arbiter held that a reading of
the termination letter shows that the ground ETPI was actually invoking was
retrenchment and not redundancy, but ETPI stuck to redundancy because it was
easier to prove than retrenchment. He also did not believe that Culili’s functions
were as limited as ETPI made it appear to be, and held that ETPI failed to
present any reasonable criteria to justify the declaration of Culili’s position as
redundant. On the issue of unfair labor practice, the Labor Arbiter agreed that the
contracting out of Culili’s functions to non-union members violated Culili’s rights
as a union member. Moreover, the Labor Arbiter said that ETPI was not able to
dispute Culili’s claims of discrimination and subcontracting, hence, ETPI was
guilty of unfair labor practice.
On appeal, the NLRC affirmed the Labor Arbiter’s decision but modified the
amount of moral and exemplary damages awarded, viz:
ETPI filed a Petition for Certiorari under Rule 65 of the Rules of Civil Procedure
before the Court of Appeals on the ground of grave abuse of discretion. ETPI
prayed that a Temporary Restraining Order be issued against the NLRC from
implementing its decision and that the NLRC decision and resolution be set
aside.
The Court of Appeals, on February 5, 2004, partially granted ETPI’s petition. The
dispositive portion of the decision reads as follows:
The Court of Appeals found that Culili’s position was validly abolished due to
redundancy. The Court of Appeals said that ETPI had been very candid with its
employees in implementing its Right-Sizing Program, and that it was highly
unlikely that ETPI would effect a company-wide reorganization simply for the
purpose of getting rid of Culili. The Court of Appeals also held that ETPI cannot
be held guilty of unfair labor practice as mere contracting out of services being
performed by union members does not per se amount to unfair labor practice
unless it interferes with the employees’ right to self-organization. The Court of
Appeals further held that ETPI’s officers cannot be held liable absent a showing
of bad faith or malice. However, the Court of Appeals found that ETPI failed to
observe the standards of due process as required by our laws when it failed to
properly notify both Culili and the DOLE of Culili’s termination. The Court of
Appeals maintained its position in its September 13, 2004 Resolution when it
denied Culili’s Motion for Reconsideration and Urgent Motion to Reinstate the
Writ of Execution issued by the Labor Arbiter, and ETPI’s Motion for Partial
Reconsideration.
Culili is now before this Court praying for the reversal of the Court of Appeals’
decision and the reinstatement of the NLRC’s decision based on the following
grounds:
II
III
IV
Culili argued that the Court of Appeals acted in contravention of applicable law
and jurisprudence when it reexamined the facts in this case and reversed the
factual findings of the Labor Arbiter and the NLRC in a special civil action
for certiorari.
This Court has already confirmed the power of the Court of Appeals, even on a
Petition for Certiorari under Rule 65,32 to review the evidence on record, when
necessary, to resolve factual issues:
The power of the Court of Appeals to review NLRC decisions via Rule 65 or
Petition for Certiorari has been settled as early as in our decision in St. Martin
Funeral Home v. National Labor Relations Commission. This Court held that the
proper vehicle for such review was a Special Civil Action for Certiorari under Rule
65 of the Rules of Court, and that this action should be filed in the Court of
Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover,
it is already settled that under Section 9 of Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction of the
Court of Appeals, amending for the purpose of Section Nine of Batas Pambansa
Blg. 129 as amended, known as the Judiciary Reorganization Act of 1980), the
Court of Appeals — pursuant to the exercise of its original jurisdiction over
Petitions for Certiorari — is specifically given the power to pass upon the
evidence, if and when necessary, to resolve factual issues.33
In the case at bench, the Court of Appeals found itself unable to completely
sustain the findings of the NLRC thus, it was compelled to review the facts and
evidence and not limit itself to the issue of grave abuse of discretion.
With the conflicting findings of facts by the tribunals below now before us, it
behooves this Court to make an independent evaluation of the facts in this case.
Culili asserted that he was illegally dismissed because there was no valid cause
to terminate his employment. He claimed that ETPI failed to prove that his
position had become redundant and that ETPI was indeed incurring losses. Culili
further alleged that his functions as a Senior Technician could not be considered
a superfluity because his tasks were crucial and critical to ETPI’s business.
Under our laws, an employee may be terminated for reasons involving measures
taken by the employer due to business necessities. Article 283 of the Labor Code
provides:
There is redundancy when the service capability of the workforce is greater than
what is reasonably required to meet the demands of the business enterprise. A
position becomes redundant when it is rendered superfluous by any number of
factors such as over-hiring of workers, decrease in volume of business, or
dropping a particular product line or service activity previously manufactured or
undertaken by the enterprise.36
This Court has been consistent in holding that the determination of whether or
not an employee’s services are still needed or sustainable properly belongs to
the employer. Provided there is no violation of law or a showing that the
employer was prompted by an arbitrary or malicious act, the soundness or
wisdom of this exercise of business judgment is not subject to the discretionary
review of the Labor Arbiter and the NLRC.37
In the case at bar, ETPI was upfront with its employees about its plan to
implement a Right-Sizing Program. Even in the face of initial opposition from and
rejection of the said program by ETEU, ETPI patiently negotiated with ETEU’s
officers to make them understand ETPI’s business dilemma and its need to
reduce its workforce and streamline its organization. This evidently rules out bad
faith on the part of ETPI.
In deciding which positions to retain and which to abolish, ETPI chose on the
basis of efficiency, economy, versatility and flexibility. It needed to reduce its
workforce to a sustainable level while maintaining functions necessary to keep it
operating. The records show that ETPI had sufficiently established not only its
need to reduce its workforce and streamline its organization, but also the
existence of redundancy in the position of a Senior Technician. ETPI explained
how it failed to meet its business targets and the factors that caused this, and
how this necessitated it to reduce its workforce and streamline its organization.
ETPI also submitted its old and new tables of organization and sufficiently
described how limited the functions of the abolished position of a Senior
Technician were and how it decided on whom to absorb these functions.
In his affidavit dated April 10, 2000,42 Mr. Arnel D. Reyel, the Head of both the
Business Services Department and the Finance Department of ETPI, described
how ETPI went about in reorganizing its departments. Mr. Reyel said that in the
course of ETPI’s reorganization, new departments were created, some were
transferred, and two were abolished. Among the departments abolished was the
Service Quality Department. Mr. Reyel said that ETPI felt that the functions of the
Service Quality Department, which catered to both corporate and small and
medium-sized clients, overlapped and were too large for a single department,
thus, the functions of this department were split and simplified into two smaller
but more focused and efficient departments. In arriving at the decision to abolish
the position of Senior Technician, Mr. Reyel explained:
11.4. With the abolition and resulting simplification of the Service Quality
Department, one of the units thereunder, the Customer Premises Equipment
Maintenance ("CPEM") unit was transferred to the Business and Consumer
Accounts Department. Since the Business and Consumer Accounts Department
had to remain economical and focused yet versatile enough to meet all the needs
of its small and medium sized clients, it was decided that, in the judgment of
ETPI management, the specialized functions of a Senior Technician in the CPEM
unit whose sole function was essentially the repair and servicing of ETPI’s
telecommunications equipment was no longer needed since the Business and
Consumer [Accounts] Department had to remain economical and focused yet
versatile enough to meet all the multifarious needs of its small and medium sized
clients.
11.5. The business reason for the abolition of the position of Senior Technician
was because in ETPI’s judgment, what was needed in the Business and
Consumer Accounts Department was a versatile, yet economical position with
functions which were not limited to the mere repair and servicing of
telecommunications equipment. It was determined that what was called for was a
position that could also perform varying functions such as the actual installation
of telecommunications products for medium and small scale clients, handle
telecommunications equipment inventory monitoring, evaluation of
telecommunications equipment purchased and the preparation of reports on the
daily and monthly activation of telecommunications equipment by these small
and medium scale clients.
11.6. Thus, for the foregoing reasons, ETPI decided that the position of Senior
Technician was to be abolished due to redundancy. The functions of a Senior
Technician was to be abolished due to redundancy. The functions of a Senior
Technician would then be absorbed by an employee assigned to the Business
and Consumer Accounts Department who was already performing the functions
of actual installation of telecommunications products in the field and handling
telecommunications equipment inventory monitoring, evaluation of
telecommunications equipment purchased and the preparation of reports on the
daily and monthly activation of telecommunications equipment. This employee
would then simply add to his many other functions the duty of repairing and
servicing telecommunications equipment which had been previously performed
by a Senior Technician.43
In the new table of organization that the management approved, one hundred
twelve (112) employees were redeployed and nine (9) positions were declared
redundant.44 It is inconceivable that ETPI would effect a company-wide
reorganization of this scale for the mere purpose of singling out Culili and
terminating him. If Culili’s position were indeed indispensable to ETPI, then it
would be absurd for ETPI, which was then trying to save its operations, to abolish
that one position which it needed the most. Contrary to Culili’s assertions that
ETPI could not do away with his functions as long as it is in the
telecommunications industry, ETPI did not abolish the functions performed by
Culili as a Senior Technician. What ETPI did was to abolish the position itself for
being too specialized and limited. The functions of that position were then added
to another employee whose functions were broad enough to absorb the tasks of
a Senior Technician.
Culili maintains that ETPI had already decided to dismiss him even before the
second phase of the Right-Sizing Program was implemented as evidenced by
the December 7, 1998 letter.
The December 7, 1998 termination letter signed by ETPI’s AVP Stella Garcia
hardly suffices to prove bad faith on the part of the company. The fact remains
that the said letter was never officially transmitted and Culili was not terminated
at the end of the first phase of ETPI’s Right-Sizing Program. ETPI had given an
adequate explanation for the existence of the letter and considering that it had
been transparent with its employees, through their union ETEU, so much so that
ETPI even gave ETEU this unofficial letter, there is no reason to speculate and
attach malice to such act. That Culili would be subsequently terminated during
the second phase of the Right-Sizing Program is not evidence of undue
discrimination or "singling out" since not only Culili’s position, but his entire unit
was abolished and absorbed by another department.
Culili also alleged that ETPI is guilty of unfair labor practice for violating Article
248(c) and (e) of the Labor Code, to wit:
xxxx
xxxx
Culili asserted that ETPI is guilty of unfair labor practice because his functions
were sourced out to labor-only contractors and he was discriminated against
when his co-employees were treated differently when they were each offered an
additional motorcycle to induce them to avail of the Special Retirement Program.
ETPI denied hiring outside contractors and averred that the motorcycles were not
given to his co-employees but were purchased by them pursuant to their
Collective Bargaining Agreement, which allowed a retiring employee to purchase
the motorcycle he was assigned during his employment.
The concept of unfair labor practice is provided in Article 247 of the Labor Code
which states:
Article 247. Concept of unfair labor practice and procedure for prosecution
thereof. -- Unfair labor practices violate the constitutional right of workers and
employees to self-organization, are inimical to the legitimate interest of both labor
and management, including their right to bargain collectively and otherwise deal
with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-
management relations.
In the past, we have ruled that "unfair labor practice refers to ‘acts that violate the
workers' right to organize.’ The prohibited acts are related to the workers' right to
self-organization and to the observance of a CBA."45 We have likewise declared
that "there should be no dispute that all the prohibited acts constituting unfair
labor practice in essence relate to the workers' right to self-organization."46 Thus,
an employer may only be held liable for unfair labor practice if it can be shown
that his acts affect in whatever manner the right of his employees to self-
organize.47
Although the Court finds Culili’s dismissal was for a lawful cause and not an act
of unfair labor practice, ETPI, however, was remiss in its duty to observe
procedural due process in effecting the termination of Culili.
We have previously held that "there are two aspects which characterize the
concept of due process under the Labor Code: one is substantive — whether the
termination of employment was based on the provision of the Labor Code or in
accordance with the prevailing jurisprudence; the other is procedural — the
manner in which the dismissal was effected."49
Section 2(d), Rule I, Book VI of the Rules Implementing the Labor Code
provides:
xxxx
For termination of employment as defined in Article 283 of the Labor Code, the
requirement of due process shall be deemed complied with upon service of a
written notice to the employee and the appropriate Regional Office of the
Department of Labor and Employment at least thirty days before effectivity of the
termination, specifying the ground or grounds for termination.
The requirement of law mandating the giving of notices was intended not only to
enable the employees to look for another employment and therefore ease the
impact of the loss of their jobs and the corresponding income, but more
importantly, to give the Department of Labor and Employment (DOLE) the
opportunity to ascertain the verity of the alleged authorized cause of
termination.51
ETPI does not deny its failure to provide DOLE with a written notice regarding
Culili’s termination. It, however, insists that it has complied with the requirement
to serve a written notice to Culili as evidenced by his admission of having
received it and forwarding it to his union president.
The Court of Appeals, in finding that Culili was not afforded procedural due
process, held that Culili’s dismissal was ineffectual, and required ETPI to pay
Culili full backwages in accordance with our decision in Serrano v. National Labor
Relations Commission.55 Over the years, this Court has had the opportunity to
reexamine the sanctions imposed upon employers who fail to comply with the
procedural due process requirements in terminating its employees. In Agabon v.
National Labor Relations Commission,56 this Court reverted back to the doctrine
in Wenphil Corporation v. National Labor Relations Commission57 and held that
where the dismissal is due to a just or authorized cause, but without observance
of the due process requirements, the dismissal may be upheld but the employer
must pay an indemnity to the employee. The sanctions to be imposed however,
must be stiffer than those imposed in Wenphil to achieve a result fair to both the
employers and the employees.58
In Jaka Food Processing Corporation v. Pacot,59 this Court, taking a cue from
Agabon, held that since there is a clear-cut distinction between a dismissal due
to a just cause and a dismissal due to an authorized cause, the legal implications
for employers who fail to comply with the notice requirements must also be
treated differently:
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause
under Article 282 but the employer failed to comply with the notice requirement,
the sanction to be imposed upon him should be tempered because the dismissal
process was, in effect, initiated by an act imputable to the employee; and (2) if
the dismissal is based on an authorized cause under Article 283 but the
employer failed to comply with the notice requirement, the sanction should be
stiffer because the dismissal process was initiated by the employer's exercise of
his management prerogative.60
Hence, since it has been established that Culili’s termination was due to an
authorized cause and cannot be considered unfair labor practice on the part of
ETPI, his dismissal is valid. However, in view of ETPI’s failure to comply with the
notice requirements under the Labor Code, Culili is entitled to nominal damages
in addition to his separation pay.1avvphi 1
Culili asserts that the individual respondents, Salvador Hizon, Emiliano Jurado,
Virgilio Garcia, and Stella Garcia, as ETPI’s officers, should be held personally
liable for the acts of ETPI which were tainted with bad faith and arbitrariness.
Furthermore, Culili insists that he is entitled to damages because of the
sufferings he had to endure and the malicious manner he was terminated.
As a general rule, a corporate officer cannot be held liable for acts done in his
official capacity because a corporation, by legal fiction, has a personality
separate and distinct from its officers, stockholders, and members. To pierce this
fictional veil, it must be shown that the corporate personality was used to
perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse
a legitimate issue. In illegal dismissal cases, corporate officers may be held
solidarily liable with the corporation if the termination was done with malice or
bad faith. 61
In illegal dismissal cases, moral damages are awarded only where the dismissal
was attended by bad faith or fraud, or constituted an act oppressive to labor, or
was done in a manner contrary to morals, good customs or public
policy.62 Exemplary damages may avail if the dismissal was effected in a wanton,
oppressive or malevolent manner to warrant an award for exemplary damages.63
It is our considered view that Culili has failed to prove that his dismissal was
orchestrated by the individual respondents herein for the mere purpose of getting
rid of him. In fact, most of them have not even dealt with Culili personally.
Moreover, it has been established that his termination was for an authorized
cause, and that there was no bad faith on the part of ETPI in implementing its
Right-Sizing Program, which involved abolishing certain positions and
departments for redundancy. It is not enough that ETPI failed to comply with the
due process requirements to warrant an award of damages, there being no
showing that the company’s and its officers’ acts were attended with bad faith or
were done oppressively.
WHEREFORE, the instant petition is DENIED and the assailed February 5, 2004
Decision and September 13, 2004 Resolution of the Court of Appeals in CA-G.R.
SP No. 75001 are AFFIRMED with the MODIFICATION that petitioner Nelson A.
Culili’s dismissal is declared valid but respondent Eastern Telecommunications
Philippines, Inc. is ordered to pay petitioner Nelson A. Culili the amount of Fifty
Thousand Pesos (₱50,000.00) representing nominal damages for non-
compliance with statutory due process, in addition to the mandatory separation
pay required under Article 283 of the Labor Code.
G.R. No. 165757 October 17, 2006
DECISION
Assailed via petition for review are issuances of the Court of Appeals in CA-G.R.
SP No. 68669, to wit: Decision1dated March 26, 2004 denying petitioners’ petition
for certiorari and upholding the decision of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 026956-00, and Resolution dated
October 19, 2004 denying petitioners’ motion for reconsideration of the decision.
Galaxie thus filed on July 30, 1999 a written notice with the Department of Labor
and Employment (DOLE) informing the latter of its intended closure and the
consequent termination of its employees effective August 31, 1999.3 And it
posted the notice of closure on the corporate bulletin board.4
The Labor Arbiter, by Decision of October 30, 2000, declared valid Galaxie’s
closure of business but nevertheless ordered it to pay petitioner-employees
separation pay, pro-rata 13th month pay, and vacation and sick leave credits. The
dispositive portion of the decision reads:
xxxx
Respondents are further ordered to pay complainants their tax refund for
1999 and to pay 10% attorney’s fees based on the total withheld labor
standard benefits.
The complaint for unfair labor practice, illegal lockout, wage differentials,
and other money claims are hereby disallowed for lack of merit.
SO ORDERED.5
On appeal, the NLRC upheld the Labor Arbiter’s decision but reversed the award
of pro-rata 13th month pay and vacation and sick leave credits, the same not
being among petitioners’ causes of action as in fact they were not even
mentioned in their pleadings.6 And it reversed too the award for separation pay,
the closure of Galaxie’s business being due to serious business losses.
Nevertheless, the NLRC directed Galaxie to grant petitioners, by way of financial
assistance, the same amount given to the employees who had executed
quitclaims. Thus the dispositive portion of the NLRC decision read:
WHEREFORE, the decision appealed from is hereby SET ASIDE. The
complaint for unfair labor practice and illegal dismissal is DISMISSED for
lack of merit. The respondent Galaxie Steel Corporation is hereby ordered
to extend as any by way of financial assistance the equivalent of ten (10)
day’s (sic) salary for every year of service to each of the following:
Eduardo Flores, Bonifacio Labaco, Salvador Verdeeflor, Paulito Nieves,
Nilo Amenazor, Benjamin Beduya, Eutiquio Meneses, Cenon Labaco,
Danilo Maranan, Eliseo Lastimoso, James Maderas, Efren Labaco,
Cesario Bolsico, Dario Cecalain, Sammy Cedeno, Prudencio dela Cruz,
Edgardo Pastrana, Danilo Bermudez, Billy Blasco, Roberto Pepino, Ruben
Tenoso, Orlando Dudilla, Jessie Sace, June Dalayat, Francisco Labaco,
Edwin Demayo, Wilfredo Cheng, Jaime Gando, Joselito Guanzon, Victor
Delmundo, Nathaniel Peroy, Roberto Virtudazo, Ricardo Hilaga, Rodrigo
Firnanez, Rene Villa, Vergelio Ico, Nolito Panuncio, Aldronico Bahillo,
Florencio Lanzaderos, Rolly Rotil, Benjamin Escano, Dominador Abaincia,
Romeo Litang, Nelson Petalio, Mario Villamor, Agustin Constantino,
Herminio Agustin, Victorio Nemenzo, Mabini Yarcia, Percy Zosimo,
Angelito delos Reyes, Advincula Elmedulan, Gorgonio Boloran, Alan
Monin, Jessie Pacalingga and Michael Daclag.
SO ORDERED.7
Their motion for reconsideration having been denied, petitioners filed a petition
for certiorari with the Court of Appeals, arguing that the NLRC acted with grave
abuse of discretion in not finding Galaxie guilty of unfair labor practice and of
violating petitioners’ right to notice of closure, and in deleting the award of
separation pay.
In the assailed decision,8 the Court of Appeals upheld the NLRC decision and
accordingly denied petitioners’ petition for certiorari as it did their motion for
reconsideration.
Hence, the present petition for review which raises the following issues:
Petitioners contend that the Court of Appeals erred in not finding that Galaxie’s
closure of business operations was motivated not by serious business losses but
by their anti-union stance.
It is settled that this Court is not a trier of facts, a rule which applies with greater
force in labor cases where the findings of fact of the NLRC are accorded respect
and even finality, as long as they are supported by substantial evidence from
which an independent evaluation of the facts may be made.9 In this case, the
Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in ruling that
Galaxie’s closure or cessation of business operations was due to serious
business losses or financial reverses, and not because of any alleged anti-union
position. This Court finds no reason to modify such finding.
In any event, petitioners contend that Galaxie did not serve written notices of the
closure of business operations upon its employees, it having merely posted a
notice on the company bulletin board. Hence, petitioners conclude, following the
doctrine in Serrano v. National Labor Relations Commission,10 Galaxie should be
liable for backwages from the date of dismissal until finality of the decision in the
case.
Further, petitioners contend that the appellate court’s upholding of the deletion by
the NLRC of separation pay is contrary to the ruling in Banco Filipino Savings
and Mortgage Bank v. National Labor Relations Commission11 which held that
separation pay is proper in cases where closure or cessation of business
operations is due to serious business losses or financial reverses.
The NLRC’s finding on the legality of the closure should be upheld for it
is supported by substantial evidence consisting of the audited financial
statements showing that Galaxie continuously incurred losses from 1997
up to mid-1999, to wit: P65,753,480.65 in 1997, P48,429,785.89 in 1998,
and P13,204,389.97 in 1999; and of the various demand notices of
payments from creditor banks. Besides, the petitioners had not presented
evidence to the contrary; nor did they establish that the closure was
motivated by Galaxie’s anti-union stance. True, the union was seeking the
holding of a certification election at the time that Galaxie closed its
business operation, but that, without more, was not sufficient to attribute
anti-unionism against Galaxie. (Underscoring supplied)
Upon the other hand, petitioners failed to present concrete evidence supporting
their claim of unfair labor practice. Unfair labor practice refers to acts that violate
the workers’ right to organize,12 and are defined in Articles 248 and 261 of the
Labor Code. The prohibited acts relate to the workers’ right to self-organization
and to the observance of Collective Bargaining Agreement without which relation
the acts, no matter how unfair, are not deemed unfair labor practices.13
Respecting petitioners’ claim for separation pay, Article 283 of the Labor Code
provides:
Explaining the policy distinction in Article 283 of the Labor Code, this Court,
in Cama v. Joni’s Food Services, Inc., declared:16
The denial of petitioners’ claim for separation pay was thus in order.
Finally, with regard to the notice requirement, the Labor Arbiter found, and it was
upheld by the NLRC and the Court of Appeals, that the written notice of closure
or cessation of Galaxie’s business operations was posted on the company
bulletin board one month prior to its effectivity. The mere posting on the company
bulletin board does not, however, meet the requirement under Article 283 of
"serving a written notice on the workers." The purpose of the written notice is to
inform the employees of the specific date of termination or closure of business
operations, and must be served upon them at least one month before the date of
effectivity to give them sufficient time to make the necessary arrangements.17 In
order to meet the foregoing purpose, service of the written notice must be
made individually upon each and every employee of the company.
Under the facts and circumstances attendant to the case, this Court finds the
amount of P20,000 in nominal damages sufficient to vindicate each petitioner’s
right to due process.
WHEREFORE, the assailed Decision dated March 26, 2004 and Resolution
dated October 19, 2004 issued by the Court of Appeals in CA-G.R. SP No.
68669 are AFFIRMED with the MODIFICATION that respondent Galaxie Steel
Corporation is ORDERED to PAY each of the individual petitioners the amount
of P20,000.00 as nominal damages for non-compliance with statutory due
process.
G.R. No. L-19187 February 28, 1963
LABRADOR, J.:
Loreta C. Sol charged the herein petitioners Sterling Products International and
its Radio Director V. San Pedro with having committed an unfair labor practice
act. In her complaint she alleged among others that she has been a regular
Radio Monitor of respondents-petitioners; that on January 8, 1960, she filed a
complaint against the said firm for underpayment, money equivalent of her
vacation leave from 1952 to 1959, and Christmas bonus for 1959, equivalent to
one month salary. The complaint resulted in her dismissal, without just cause, on
December 16, 1960.
In their answer petitioners herein denied the charges and by way of affirmative
defenses, alleged that complainant is an independent contractor whose services
were retained by petitioners to submit reports of radio monitoring work performed
outside of their (petitioners') office; that petitioners no longer required
complainant's services and therefore, it gave her notice of termination, as it did in
fact terminate her services, as an independent contractor; that petitioners
terminated the services of complainant-respondent for good and justifiable
reasons and in accordance with business requirements; that the complaint states
no cause of action and that petitioners did not and are not engaged in unfair
labor practice acts against the complainant within the meaning of Sec. 4(a),
subsection 5 of the Industrial Peace Act.
The court further found that the company's control over respondent's work is
shown by the fact that she can not listen to broadcasts other than those that were
contained in the schedule given to her by the company. Supervision and control
of her work could be done by checking or verifying the contents of her reports on
said broadcasts, said the court.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
admitted and approved by this Honorable Court, without prejudice to the parties
adducing other evidence to prove their case not covered by this stipulation of
facts.1äw phï1.ñët
In the case at bar, the company not only hired and fired Mrs. Sol, without
third party intervention, but also reserved to itself, possessed and
exercised its right to control 'the end' to be achieved and 'the means' to be
used in reaching such end, namely, the schedule and other instructions by
which the monitor shall be guided, and the reports with specifications by
which the company observes and verifies the performance of her work.
In consequence the court held that the respondent was an employee. It also
found that the petitioners herein are guilty of unfair labor practice, so it ordered
petitioners to reinstate respondent Loreta C. Sol, with back wages from the date
of her dismissal until her reinstatement. Two judges dissented to this decision.
In the petition now brought to Us by certiorari it is urged that respondent Sol was
an independent contractor because in the performance of her work, the elements
of control and direction are lacking, hence, no relationship of employer and
employee must have existed, citing in support of this contention Section 3, 35
Am. Jur. 445-446; and that since respondent was employed to work according to
her own methods and without being subject to control except as to its final result,
she may not be considered as an employee. (Ibid.) We cannot accept this
argument. Respondent Sol was directed to listen to certain broadcasts, directing
her, in the instructions given her, when to listen and what to listen, petitioners
herein naming the stations to be listened to, the hours of broadcasts, and the
days when listening was to be done. Respondent Sol had to follow these
directions. The mere fact that while performing the duties assigned to her she
was not under the supervision of the petitioners does not render her a contractor,
because what she has to do, the hours that she has to work and the report that
she has to submit all — these are according to instructions given by the
employer. It is not correct to say, therefore, that she was an independent
contractor, for an independent contractor is one who does not receive
instructions as to what to do, how to do, without specific instructions.
Finally, the very act of respondent Sol in demanding vacation leave, Christmas
bonus and additional wages shows that she considered herself an employee. A
contractor is not entitled to a vacation leave or to a bonus nor to a minimum
wage. This act of hers in demanding these privileges are inconsistent with the
claim that she was an independent contractor.
The next point at issue is whether or not the petitioners herein are guilty of unfair
labor practice. Petitioners claim that under the decision rendered by Us in the
case of Royal Interocean Lines, et al. vs. Court of Industrial Relations, et al., G.R.
No. L-11745, Oct. 31, 1960, as respondent Sol was merely an employee and
was not connected with any labor union, the company cannot be considered as
having committed acts constituting unfair labor practice as defined in the
Industrial Peace Act, Rep. Act 875. We find this contention to be well-founded.
The term unfair labor practice has been defined as any of those acts listed in
See. 4 of the Act. The respondent Sol has never been found to commit any of the
acts mentioned in paragraph (a) of Sec. 4. Respondent Sol was not connected
with any labor organization, nor has she ever attempted to join a labor
organization, or to assist, or contribute to a labor organization. The company
cannot, therefore, be considered as having committed an unfair labor practice.
The court below found that there is an employment contract (Exhibit "3") between
petitioners and respondent Sol in which it was expressly agreed that Sol could be
dismissed upon fifteen days' advance notice, if petitioners herein desire.
Respondent Sol was dismissed on January 13, 1959 and therefore the dismissal
should be governed by the provisions of Republic Act 1787, which took effect on
June 21, 1957. Section 1 of the Act provides:
1. By the employer —
The contract between the petitioners and the respondent Sol providing that the
respondent Sol can be dismissed upon fifteen days' notice is therefore null and
void. Inasmuch as respondent Sol was employed since the year 1952 and was in
the employment of the petitioners from that time up to 1959, or a period of seven
years, she is entitled to three and one-half months pay in accordance with the
above quoted section 1 of the Act.
WHEREFORE, that portion of the decision finding the petitioners herein guilty of
unfair labor practice and sentencing petitioners to reinstate respondent Sol in her
former work is hereby set aside, and the petitioners are sentenced to pay, as
separation pay, three and one-half months' pay to respondent Sol. In all other
respects the decision is affirmed. No costs.
G.R. No. 186605 November 17, 2010
DECISION
MENDOZA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules
of Court filed by petitioner Central Azucarera De Bais Employees Union-National
Federation of Labor (CABEU-NFL) seeking to reverse and set aside: (1) the
September 26, 2008 Decision1 of the Court of Appeals (CA), in CA-G.R. SP No.
03238, which reversed the July 18, 2007 Decision2 and September 28, 2007
Resolution3 of the National Labor Relations
Commission (NLRC)and reinstated the July 13, 2006 Decision4 of the Labor
Arbiter (LA); and (2) its January 21, 2009 Resolution5denying the Motion for
Reconsideration of CABEU-NFL.
THE FACTS
On March 27, 2004, CAB responded with a counter-proposal7 to the effect that
the production bonus incentive and special production bonus and incentives be
maintained. In addition, respondent CAB agreed to execute a pro-rated increase
of wages every time the government would mandate an increase in the minimum
wage. CAB, however, did not agree to grant additional and separate Christmas
bonuses.
On May 21, 2004, CAB received an Amended Union Proposal8 sent by CABEU-
NFL reducing its previous demand regarding wages and bonuses. CAB,
however, maintained its position on the matter. Thus, the collective bargaining
negotiations resulted in a deadlock.
CAB replied through its June 14, 2005 Letter11 (letter-response) to NCMB
Regional Director of Dumaguete City Isidro Cepeda, which reads:
At the outset, it observed that the letter signed by Mr. Pablito Saguran who is no
longer an employee of the Central for he was one of those lawfully terminated
due to an authorized cause x x x.
More importantly, the declared purpose of the requested conciliation meeting has
already been rendered moot and academic because: (1) the Union which Mr.
Saguran purportedly represents has already lost its majority status by reason of
the disauthorization and withdrawal of support thereto by more than 90% of the
rank and file employees in the bargaining unit of Central sometime in January,
2005, and (2) the workers themselves, acting as principal, after disauthorizing the
previous agent CABEU-NFL have organized themselves into a new Union known
as Central Azucarera de Bais Employees Labor Association (CABELA) and after
obtaining their registration certificate and making due representation that it is a
duly organized union representing almost all the rank and file workers in the
Central, had concluded a new collective bargaining agreement with the Central
on April 21, 2005 in Dumaguete City. The aforesaid CBA had been duly ratified
by the rank and file workers constituting 91% of the collective bargaining unit x x
x.
Clearly, therefore, the request for further conciliation conference will serve no
lawful and practical purpose. In view of the foregoing, and for the sake of
continued industrial peace prevailing in the Central, we beseech the Honorable
Office to disregard the aforesaid request.
It appears that the NCMB failed to act on the letter-response of CAB. Neither did
it convene CAB and CABEU-NFL to continue the negotiations between them.
Reacting from the letter-response of CAB, CABEU-NFL filed a Complaint for
Unfair Labor Practice12 for the former’s refusal to bargain with it.
On July 13, 2006, the LA dismissed the complaint.13 Pertinent portions of the LA
decision read:
The procedure in the discharge of the duty to bargain collectively is provided for
in Article 250 of the Labor Code: (1) the party who desires to negotiate an
agreement shall serve a written notice upon the other party with a statement of
proposals; (2) the other party shall make a reply thereto not later than ten (10)
days from receipt of notice; (3) if the dispute is unsettled resulting in a deadlock,
the NCMB shall intervene upon the request or at its own initiative and call the
parties to conciliation Meeting x x x (4) if the NCMB fails to effect an agreement,
the Board shall exert all efforts to settle disputes amicably and encourage the
parties to submit their case to a voluntary arbitrator; (5) the parties may also go
on strike or declare a lockout as the case may be after complying with legal
requirements. Subject, of course, to the plenary power of the Secretary of Labor
and Employment to assume jurisdiction over the dispute or to certify the same to
the NLRC for compulsory arbitration.
In the case at bar, the record shows that respondent CAB replied to the
complainant Union’s CBA proposals with its own set of counterproposals x x x.
Likewise, respondent CAB responded to the Union’s subsequent
counterproposals x x x. Record further shows that respondent CAB participated
in a series of CBA negotiations conducted by the parties at the plant level as well
as in the conciliation/mediation proceedings conducted by the NCMB.
Unfortunately, both exercises resulted in a deadlock.
We do not agree that respondent CAB committed an unfair labor practice act in
questioning the capacity of Mr. Pablito Saguran to represent complainant union
in the CBA negotiations because Mr. Pablito Saguran was no longer an
employee of respondent CAB at that time having been separated from
employment on the ground of redundancy and having received the
corresponding separation benefits. x x x.
So also, we do not find respondent CAB guilty of unfair labor practice by its act of
writing the NCMB Director in a letter dated June 24, 2005, stating its legal
position on complainant’s request for further conciliation to the effect that since
almost [all] of the rank and file employees, the principals in a principal-agent
relationship, have withdrawn their support to the complainant union and that in
fact they have already organized themselves into a DOLE-registered labor union
known as CABELA, any further conciliation will serve no lawful and practical
purpose. x x x.
At this juncture, it was incumbent upon the NCMB to make a ruling on the
request of the complainant union as well as upon the corresponding comment of
respondent CAB. If the NCMB chose not to pursue further negotiation between
the parties, respondent CAB should not be faulted therefor. x x x.
Under the facts obtaining, when the conciliation/mediation by the NCMB has not
been officially concluded, we find the instant complaint for unfair labor practice
not only without merit but also premature.
SO ORDERED.
On appeal, the NLRC in its July 18, 2007 Decision14 reversed the LA’s decision
and found CAB guilty of unfair labor practice. The NLRC explained:
With respect to respondent’s observation that the request for conciliation meeting
was signed by one who is not eligible and authorized to represent any union with
the company since he is no longer an employee, suffice it to state that at the time
the request was made, such employee has questioned the validity of his
dismissal with then NLRC. X x x.
SO ORDERED.
CAB moved for a reconsideration but the motion was denied by the NLRC in its
resolution dated September 28, 2007.15
Unsatisfied, CAB elevated the matter to the CA by way of a petition for certiorari
under Rule 65 alleging grave abuse of discretion on the part of the NLRC in
reversing the LA decision and issuing the questioned resolution.
On September 26, 2008, the CA found CAB’s petition meritorious and reversed
the NLRC decision and resolution. The CA pointed out:
First. This Court has acquired jurisdiction over the person of private respondent
CABEU-NFL. Through its counsel of record, CABEU-NFL already filed its
extensive comment on the instant petition. Hence, it is now useless to contend
that it was denied notice of the same and the opportunity to be heard on it. x x x.
Second. Petitioner CAB was not shown to have violated the rule requiring parties
to certify in their initiatory pleadings against forum shopping. Private respondent
CABEU-NFL alleges in its comment that the two cases are pending before this
Court: CA-G.R. No. 03132 and CA-G.R. No. 03017 involving the same parties as
in the case at bar. Unfortunately, CABEU-NFL did not explain how the issues in
those pending cases are related to or similar to those involved in this proceeding.
x x x.
In the case at bar, private respondent CABEU-NFL failed in its burden of proof to
present substantial evidence to support the allegation of unfair labor practice.
The assailed Decision and Resolution of public respondent referred merely to
two (2) circumstances which allegedly support the conclusion that the
presumption of good faith had been rebutted and that bad faith was extant in
petitioner’s actions. To recall, these circumstances are: (a) the execution of a
supposed collective bargaining agreement with another labor union, CABELA;
and (b) CAB’s sending of the letter dated June 14, 2005 to NCMB seeking to call
off the collective bargaining negotiations. These, however, are not enough to
ascribe the very serious offense of unfair labor practice upon petitioner. x x x.
x x x petitioner CAB was not scuttling the ongoing negotiations towards a new
collective bargaining agreement. It was simply propounding a position to the
NCMB for the latter to rule on. That the negotiations did not push through was
not the result of CAB management’s intransigence because there was none – at
least so far as the case record confirms. There is nothing that establishes
petitioner’s predetermined resolve not to budge from an initial position – perhaps
stubbornness of some ambiguous sort but not the absence of good faith to
pursue collective bargaining. x x x.
SO ORDERED.
CABEU-NFL moved for a reconsideration but its motion was denied by the CA in
its Resolution dated January 21, 2009.16
ISSUES
In sum, the petition raises three (3) issues for the Court’s consideration which are
whether or not the CA erred: (1) in giving due course to the petition
for certiorari despite service of the copy of the petition to CABEU-NFL’s counsel
and not to itself ; (2) in giving due course to the petition for certiorari despite the
failure of CAB to indicate the address of CABEU-NFL in the petition; and (3) in
absolving CAB of unfair labor practice.
CABEU-NFL insists that the CA erred in giving due course to the petition
for certiorari because respondent CAB served a copy of its CA petition to
CABEU-NFL’s counsel and not to CABEU-NFL itself. CABEU-NFL, likewise,
harps on the failure of CAB to indicate CABEU-NFL’s full address in the said
petition as required in petitions for certiorari, citing Section 1, Rule 6520 in relation
to Section 3, Rule 46.21
In its Memorandum,24 CAB claims that service of the copy of the petition
for certiorari to CABEU-NFL’s counsel was sufficient. It vehemently denies its
alleged failure to indicate CABEU-NFL’s name and address in its petition. CAB
also stresses that CA-G.R. SP No. 033132 and CA-G.R. SP No. 03017 "were
initiated exclusively by members of CABEU and by CABEU itself, respectively,
and not by CAB."25 CAB further argues that there was no identity of issues or
causes of action between the two abovementioned cases and this case.
On the issue of unfair labor practice, CAB counters that in view of the
disassociation of more than 90% of rank-and-file workers from CABEU-NFL, it
was constrained to negotiate and conclude in good faith a new CBA with
CABELA, the newly established union by workers who disassociated from
CABEU-NFL. CAB emphasizes that it declined further negotiations with CABEU-
NFL in good faith because to continue with it would serve no practical purpose.
Considering that the NCMB has yet to resolve CAB’s query in its letter-response,
CAB was left without any choice but accede to the demands of CABELA. In
concluding a CBA with CABELA, CAB claims that it acted in the best interest of
the rank-and-file workers which belied bad faith.
THE COURT’S RULING
On the technical issues, CABEU-NFL’s insistence that service of the copy of the
CA petition should have been made to it, rather than to its counsel, is unavailing.
With respect to the alleged failure of CAB to indicate the address of CABEU-NFL
in the CA petition, it appears that CABEU-NFL is misleading the Court. A perusal
of the petition27 filed before the CA reveals that CAB indeed indicated both the
name28 and address29 of CABEU-NFL. Moreover, the indication in said petition by
CAB that CABEU-NFL could be served with court processes through its counsel
was substantial compliance with the Rules.30
In the case at bench, CABEU-NFL merely raised the fact of the pendency of CA-
G.R. SP No. 033132 and CA-G.R. SP No. 03017 in its comment on the petition
for certiorari32 filed before the CA without demonstrating any similarity in the
causes of action between the said cases and the present case. The CA, citing
the ruling in T’boli Agro-Industrial Development, Inc. v. Solilapsi33 as authority,
points out that:
This Court cannot take judicial notice of what CA-G.R. No. 03132 and CA-G.R.
No. 03017 involve because:
"As a general rule, courts are not authorized to take judicial notice in the
adjudication of cases pending before them of the contents of other cases even
when such cases have been tried or are pending in the same court and
notwithstanding the fact that both cases may have been tried or are actually
pending before the same judge. Courts may be required to take judicial notice of
the decisions of the appellate courts but not of the decisions of the coordinate
trial courts, or even of a decision or the facts involved in another case tried by the
same court itself, unless the parties introduce the same in evidence or the court,
as a matter of convenience, decides to do so. Besides, judicial notice of matters
which ought to be known to judges because of their judicial functions is only
discretionary upon the court. It is not mandatory."
In the absence of evidence to show that the issues involved in these cases are
the same, this Court cannot give credence to private respondent’s claim of forum
shopping.
The Court now proceeds to determine whether or not respondent CAB was guilty
of acts constituting unfair labor practice by refusing to bargain collectively.
The concept of unfair labor practice is provided in Article 247 of the Labor Code
which states:
Article 247. Concept of Unfair Labor Practice and Procedure for Prosecution
thereof. -- Unfair labor practices violate the constitutional right of workers and
employees to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-
management relations.
The Labor Code, likewise, enumerates the acts constituting unfair labor practices
of the employer, thus:
For a charge of unfair labor practice to prosper, it must be shown that CAB was
motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy, and, of course, that
social humiliation, wounded feelings or grave anxiety resulted x x x" in
suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEU-
NFL was no longer the representative of the workers.34 It just wanted to foster
industrial peace by bowing to the wishes of the overwhelming majority of its rank
and file workers and by negotiating and concluding in good faith a CBA with
CABELA."35 Such actions of CAB are nowhere tantamount to anti-unionism, the
evil sought to be punished in cases of unfair labor practices.
Furthermore, basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same. By imputing bad faith to the
actuations of CAB, CABEU-NFL has the burden of proof to present substantial
evidence to support the allegation of unfair labor practice.36 Apparently, CABEU-
NFL refers only to the circumstances mentioned in the letter-response, namely,
the execution of the supposed CBA between CAB and CABELA and the request
to suspend the negotiations, to conclude that bad faith attended CAB’s actions.
The Court is of the view that CABEU-NFL, in simply relying on the said letter-
response, failed to substantiate its claim of unfair labor practice to rebut the
presumption of good faith.
Moreover, as correctly determined by the LA, the filing of the complaint for unfair
labor practice was premature inasmuch as the issue of collective bargaining
is still pending before the NCMB.
In the resolution of labor cases, this Court has always been guided by the State
policy enshrined in the Constitution that the rights of workers and the promotion
of their welfare shall be protected. The Court is, likewise, guided by the goal of
attaining industrial peace by the proper application of the law. Thus, it cannot
favor one party, be it labor or management, in arriving at a just solution to a
controversy if the party has no valid support to its claims. It is not within this
Court’s power to rule beyond the ambit of the law.
G.R. Nos. L-30632-33 April 11, 1972
VILLAMOR, J.:p
This is an appeal by the Caltex Filipino Managers and Supervisors' Association from the resolution en banc dated May 16, 1969 of the Court
of Industrial Relations affirming the decision dated February 26, 1969 of Associate Judge Emiliano C. Tabigne, Associate Judge Ansberto P.
Paredes dissented from the resolution of the majority on the ground that the Industrial Court in a representation case cannot take cognizance
of the issue of illegality of a strike and proceed to declare the loss of the employee status of employees inasmuch as that matter ought to be
processed as an unfair labor practice case. Judge Tabigne's decision covers two cases, namely, Case No. 1484-MC (1) in which he declared
the strike staged on April 22, 1965 by the Association as illegal with the consequent forfeiture of the employee status of three employees
(Jose J. Mapa, President of the Association; Dominador Mangalino, Vice-President and Herminigildo Mandanas) and Case No. 4344-ULP
against Caltex (Philippines), Inc., Ben F. Edwards W.E. Menefee which Judge Tabigne dismissed for lack of merit and substantial evidence.
On March 29, 1965, during the hearing of the certification proceedings, Judge
Tabigne cautioned the parties to maintain the status quo; he specifically advised
the employees not to go on strike, making it clear, however, that in the presence
of unfair labor practices they could go on strike even without any notice.2
On the basis of the strike notice filed on March 8, 1965 and in view of acts
committed by the Company which the Association considered as constituting
unfair labor practice, the Association struck on April 22, 1965, after the efforts
exerted by the Bureau of Labor Relations to settle the differences between the
parties failed. Then, through an "Urgent Petition" dated April 26, 1965 filed as
Case No. 1484-MC(1), or as an incident of the certification election proceedings
(Case No. 1484-MC), the Company prayed as follows:
5. The damages that petitioner has suffered and will suffer up to the
trial of this action be ascertained and judgment be rendered against
respondent association, its officers, members and representatives
jointly and severally for the amount thereof.
Petitioner prays for such other and further relief as this Honorable
Court may deem just and equitable in the premises. (Annex "D",
Petition)
Such urgent petition was frontally met by the Association with a motion to dismiss
questioning the jurisdiction of the industrial court. The motion to dismiss was
opposed by the Company and on May 17, 1965 the trial court denied the same.
Not satisfied with the order of May 17, 1965, the Association moved for its
reconsideration before respondent court en banc.
Because of the settlement between the parties on May 30, 1965 of some of their
disputes, the Association filed with respondent court under date of June 3, 1965
a manifestation (to which was attached a copy of the return-to-work agreement
signed by the parties on May 30, 1965), to the effect that the issues in Case No.
1484-MC (1) had become moot and academic. Under date of June 15, 1965 the
Company filed a counter-manifestation disputing the representations of the
Association on the effect of the return-to-work agreement. On the basis of the
manifestation and counter-manifestation, respondent court en banc issued a
resolution on August 24, 1965 allowing the withdrawal of the Association's motion
for reconsideration against the order of May 17, 1965, on the theory that there
was justification for such withdrawal.
Relative to the resolution of August 24, 1965 the Company filed a motion for
clarification which the Association opposed on September 22, 1965, for it
contended that such motion was in reality a motion for reconsideration and as
such filed out of time. But respondent court brushed aside the Association's
opposition and proceeded to clarify the resolution of August 24, 1965 to mean
that the Company was not barred from continuing with Case No. 1484-MC(1).
At the hearing on September 1, 1965 of Case No. 1484-MC(1) the Association
insisted that the incident had become moot and academic and must be
considered dismissed and, at the same time, it offered to present evidence, if still
necessary, in order to support its contention. Respondent court thereupon
decided to secure evidence from the parties to enlighten it on the interpretation of
the provisions of the return-to-work agreement relied upon by the Association as
rendering the issues raised in Case No. 1484-MC(1) already moot and academic.
Evidence having been received, the trial court ruled in its order of February 15,
1966 that under the return-to-work agreement the Company had reserved its
rights to prosecute Case No. 1484-MC(1) and, accordingly, directed that the case
be set for hearing covering the alleged illegality of the strike. Within the
prescribed period the Association filed a motion for reconsideration of the
February 15, 1966 order to which motion the Company filed its opposition and, in
due course, respondent court en banc issued its resolution dated March 28, 1966
affirming the order. Appeal from the interlocutory order was elevated by the
Association to this Court in G.R. No. L-25955, but the corresponding petition for
review was summarily "DISMISSED for being premature" under this court's
resolution of May 13, 1966.
Considering the interrelation of the issues involved in the two cases and by
agreement of the parties, the two cases were heard jointly. This explains why
only one decision was rendered by respondent court covering both Case No.
1484-MC(1), relating to the illegality of the strike as contended by the Company,
and Case No. 4344-ULP, referring to the unfair labor practice case filed by the
Association against the Company, W.E. Menefee and B.F. Edwards.
II
III
IV
VII
VIII
IX
XI
1. whether or not the Court of Industrial Relations has jurisdiction over Case No.
1484-MC(1);
2. Whether or not the strike staged by the Association on April 22, 1965 is illegal
and, incident thereto, whether respondent court correctly terminated the
employee status of Jose Mapa, Dominador Mangalino and Herminigildo
Mandanas and reprimanded and admonished the other officers of the
Association; and
It is well known that the scheme in Republic Act No. 875 for achieving industrial
peace rests essentially on a free and private agreement between the employer
and his employees as to the terms and conditions under which the employer is to
give work and the employees are to furnish labor, unhampered as far as possible
by judicial or administrative intervention. On this premise the lawmaking body
has virtually prohibited the issuance of injunctive relief involving or growing out of
labor disputes.
With respect to the alleged "illegality of the strike," as claimed by the Company,
and the consequent forfeiture of the employee status of the strikers, we believe
these matters which are neither pertinent to nor connected with a certification
case as opined by Judge Paredes, to which we agree. Respondent court,
therefore, initially erred in entertaining this issue in Case No. 1484-MC(1). No
prejudice, however, has resulted since, as correctly pointed out by respondent
court, the illegality for the strike was squarely raised by the Company as a
defense in Case No. 4344-ULP and, in any event, we observe that the
Association was given all the opportunity to put forward its evidence.
We now come to the important issue as to whether the strike staged by the
Association on April 22, 1965 is illegal. From an examination of the records, we
believe that the lower court erred in its findings in this regard.
To begin with, we view the return-to-work agreement of May 30, 1965 as in the
nature of a partial compromise between the parties and, more important, a labor
contract; consequently, in the latter aspect the same "must yield to the common
good" (Art. 1700, Civil Code of the Philippines) and "(I)n case of doubt ... shall be
construed in favor of the safety and decent living for the laborer" (Art. 1702, ibid).
To our mind when the Company unqualifiedly bound itself in the return-to-work
agreement that all employees will be taken back "with the same employee status
prior to April 22, 1965," the Company thereby made manifest its intention and
conformity not to proceed with Case No. 1484-MC, (c) relating the illegality of the
strike incident. For while it is true that there is a reservation in the return-to-work
agreement as follows:
6. The parties agree that all Court cases now pending shall continue,
including CIR Case No. 1484-MC.
we think the same is to be construed bearing in mind the conduct and intention of
the parties. The failure to mention Case No. 1484-MC(1) while specifically
mentioning Case No. 1484-MC, in our opinion, bars the Company from
proceeding with the former especially in the light of the additional specific
stipulation that the strikers would be taken back with the same employee status
prior to the strike on April 22, 1965. The records disclose further that, according
to Atty. Domingo E. de Lara when he testified on October 9, 1965, and this is not
seriously disputed by private respondents, the purpose of Paragraph 10 of the
return-to-work agreement was, to quote in part from this witness, "to secure the
tenure of employees after the return-to-work agreement considering that as I
understand there were demotions and suspensions of one or two employees
during the strike and, moreover, there was this incident Case No. 1484-MC(1)"
(see Brief for the Petition pp. 41-42). To borrow the language of Justice J.B.L.
Reyes in Citizens Labor Union Pandacan Chapter vs. Standard Vacuum Oil
Company (G.R. No. L-7478, May 6, 1955), in so far as the illegality of the strike is
concerned in this proceeding and in the light of the records.
... the matter had become moot. The parties had both abandoned
their original positions and come to a virtual compromise and agreed
to resume unconditionally their former relations. To proceed with the
declaration of illegality would not only breach this understanding,
freely arrived at, but to unnecessarily revive animosities to the
prejudice of industrial peace. (Emphasis supplied)
Conceding arguendo that the illegality incident had not become moot and
academic, we find ourselves unable to agree with respondent court to the effect
that the strike staged by the Association on April 22, 1965 was unjustified,
unreasonable and unwarranted that it was declared in open defiance of an order
in Case No. 1484-MC not to strike; and that the Association resorted to means
beyond the pale of the law in the prosecution of the strike. As adverted to above,
the Association filed its notice to strike on March 8, 1965, giving reasons therefor
any one of which is a valid ground for a strike.
Besides, one of the important rights recognized by the Magna Carta of Labor is
the right to self-organization and we do not hesitate to say that is the cornerstone
of this monumental piece of labor legislation. Indeed, because of occasional
delays incident to a certification proceeding usually attributable to dilatory tactics
employed by the employer, to a certain extent a union may be justified in
resorting to a strike. We should not be understood here as advocating a strike in
order to secure recognition of a union by the employer. On the whole we are
satisfied from the records that it is incorrect to say that the strike of the
Association was mainly for the purpose of securing recognition as bargaining
agent.
As will be discussed hereinbelow, the charge of unfair labor practice against the
Company is well-taken. It is, therefore, clear error on the part of the Association
is unjust, unreasonable and unwarranted.
We said earlier that the advice of Judge Tabigne to maintain the status
quo cannot be considered as a lawful order within the contemplation of the
Magna Carta of Labor, particularly Section 10 thereof; to so regard it as an order
would be to grant respondent court authority to forbid a strike in an uncertified
case which it is not empowered to do. The fact that the strike was not staged until
April 22, 1965 is eloquent proof enough of the desire of the Association and its
officers and members to respect the advice of Judge Tabigne. However, as
shown in this case during the pendency of the certification proceedings unfair
labor practices were committed by the Company; hence, the Association was
justified in staging a strike and certainly this is not in violation of the advice of
Judge Tabigne on March 29, 1965.
Respondent court picked out a number of incidents, taking place during the
strike, to support its conclusion that the strikers resorted to means beyond the
pale of the law in the prosecution of a strike. Thus, it made mention of the
blocking by a banca manned by two striking supervisors by the name of
Dominador Mangalino and one Bonecillo of the Caltex M/V Estrella when it was
about to depart; the blocking at the refinery of the Company in Bauan, Batangas
of the LSCO WARA, the Hills Bros Pinatubo, and the Mobil Visayas so that they
could not dock; the blocking by the strikers of incoming vehicles, non-striking
supervisors, and rank-and-file workers to prevent them from entering the refinery
gate in Bauan, Batangas, at the Poro Terminal, at the Company's Padre Faura
office in Manila, and at the Pandacan Terminal; that at the Legaspi and
Mambulao Bulk Depots the striking supervisors refused to surrender to their
superiors the keys to the depots and storage tanks; and that also at the Legaspi
Depot the truck ignition keys were mixed up or thrown at the seats of the trucks
in violation of the Company regulations in order to create confusion and thus
prevent the trucks from being used.4 To refute these and similar findings of
respondent court the Association, drawing chiefly and abundantly from the
Company's own evidence,5 called attention to the exculpatory declarations of the
Company's own witnesses6 either establishing or tending to establish that the
picketing the strikers was generally peaceful and orderly. We find that such,
indeed, was the real situation during the strike and it would be the height of
injustice to rule otherwise in the face of the records before us.
(2) Not only must the party be given an opportunity to present his
case and to adduce evidence tending to establish the rights which
he asserts but the tribunal must consider the evidence presented.
(Chief Justice Hughes in Morgan vs. U.S., 298 U.S. 468, 56 S. Ct.
906, 80 Law Ed. 1288.) In the language of this Court in Edwards vs.
McCoy, 22 Phil., 598, "the right to adduce evidence, without the
corresponding duty on the part of the board to consider it, is vain.
Such right is conspicuously futile if the person or persons to whom
the evidence is presented can thrust it aside without notice or
consideration." (Ibid., p. 67)8
We are convinced from the records that on the whole the means employed by
the strikers during the strike, taking into account the activities of the Company
and the non-striking employees on the same occasion, cannot be labeled as
unlawful; in other words, the Company itself through the provocative, if not
unlawful, acts of the non-striking employees9 is not entirely blameless for the
isolated incidents relied upon by respondent court as tainting the picketing of the
strikers with illegality. As we said through Justice Fernando in Shell Oil Workers'
Union vs. Shell Company of the Philippines, Ltd.,
L-28607, May 31, 1971, 39 SCRA 276:
... Barely four months ago, in Insular Life Assurance Co., Ltd.
Employees' Association vs. Insular Life Assurance Co., Ltd., there is
the recognition by this Court, speaking through Justice Castro, of
picketing as such being "inherently explosive". It is thus clear that
not every form of violence suffices to affix the seal of illegality on a
strike or to cause the loss of employment of the guilty party. (Ibid.,
pp. 293-294; emphasis supplied)
In the cited case of Insular Life Assurance Co., Employees' Association-NATO,
FGU Insurance Group Workers & Employees Association-NATU and Insular Life
Building Employees Association-NATU vs. The Insular Life insurance Co., Ltd.,
FGU Insurance Group, et al., L-25291, January 30, 1971, 37 SCRA 244, we held
through Justice Castro, and this is here applicable to the contention of
theAssociation, as follows:
... Besides, under the circumstances the picketers not legally bound
to yield their grounds and withdraw from the picket lines. Being
where the law expects them to be in the legitimate exercise of their
rights, they had every reason to defend themselves and their rights
from any assault or unlawful transgression. ... (Ibid., p. 271)
In this cited case, by the way, we reversed and set aside the decision of the
Court of Industrial Relations and ordered the Company to reinstate the dismissed
workers backwages.
Let us now examine the charge of unfair labor practice which respondent court
dismissed for lack of merit and substantial evidence.
Under Sec. 14(c) of Republic Act No. 875, the parties themselves are required
"to participate fully and promptly in such meetings and conferences as the
(Conciliation) Service may undertake." In this case, the parties agreed to meet on
April 21, 1965 and yet, notwithstanding this definite agreement, the Company
sent no representatives. The Company's claim to bargaining in good faith cannot
be given credence in the face of the fact that W.E. Menefee the Company's
Managing Director, conveniently left Manila for Davao on April 17 or 18, 1965, as
admitted by W.E. Wilmarth. 10
Nowhere is there serious claim on the part of the Company that it entertains real
doubt as to the majority representation of the Association. Consider further that
admittedly the certification election proceeding for the Cebu Supervisors Union in
the Company had been pending for six (6) years already. From all appearances,
therefore, and bearing in mind the deliberate failure of the Company to attend the
conciliation meetings on April 19 and 21, 1965, it is clear that the Company
employed dilatory tactics doubtless to discredit CAFIMSA before the eyes of its
own members and prospective members as an effective bargaining agent,
postpone eventual recognition of the Association, and frustrate its efforts towards
securing favorable action on its economic demands.
It is likewise not disputed that on March 4, 1965, the Company issued its
statement of policy (Exh. B). At that time the Association was seeking recognition
as bargaining agent and has presented economic demands for the improvement
of the terms and conditions of employment of supervisors. The statement of
policy conveyed in unequivocal terms to all employees the following message:
An employee reading the foregoing would at once gain impression that there was
no need to join the Association. For he is free to present his grievances
regardless of whether or not he is represented by a labor organization.
The guilty conduct of the Company before, during after the strike of April 22,
1965 cannot escape the Court's attention. It will suffice to mention typical
instances by way of illustration. Long prior to the strike, the Company had
interferred with the Cebu Supervisors' Union by enticing Mapa into leaving the
Union under the guise of promotion in Manila; shortly before the strike, B.R.
Edwards, Manager-Operations, had inquired into the formation and organization
of the petitioner Association in this case. During the strike, in addition to the
culpable acts of the Company already narrated above, due significance must be
given to the inclusion initially of J.J. Mapa and A. Buenaventura, the
Association's President and Vice-President respectively, in 1965, in two coercion
cases filed at that time and their subsequent elimination from the charges the
initiative of the Company after the settlement of strike; 11 the cutting off of
telephone facilities extended Association members in the refinery; and the use of
a member of the Association to spy for the company. 12 The discriminatory acts
practiced by the Company against active unionists after the strike furnish further
evidence that Company committed unfair labor practices as charged. 13 Victims of
discrimination are J.J. Mapa, A.E. Buenaventura, E.F. Grey, Eulogio
Manaay,14 Pete Beltran, Jose Dizon, Cipriano Cruz, F.S. Miranda and many
others. The discrimination consisted in the Company's preferring non-members
of the Association in promotions to higher positions and humiliating active
unionists by either promoting junior supervisors over them or by reduction of their
authority compared to that assigned to them before the strike, or otherwise
downgrading their positions. 15
Then, effective July 1, 1969, the Company terminated the employment of J.J.
Mapa and Dominador Mangalino, President and Vice-President, respectively, of
the Association at that time. And this the Company did not hesitate to do
notwithstanding the Association's seasonable appeal from respondent court's
decision. We perceive in this particular action of the Company its anti-union
posture and attitude. In this connection, we find merit in the claim of petitioner
that the dismissal of Mapa and Mangalino was premature considering that
respondent court did not expressly provide that such dismissal might be effected
immediately despite the pendency of the appeal timely taken by the Association.
The situation would have been different had respondent court ordered the
dismissal of Mapa and Mangalino immediately. As the decision is silent on this
matter the dismissal of said officers of the Association ought to have been done
only upon the finality of the judgment. Because appeal was timely taken, the
Company's action is patently premature and is furthermore evidence of its desire
to punish said active unionists.
The Court takes judicial notice of the considerable efforts exerted by both parties
in the prosecution of respective cases and the incidents thereof both before lower
court and this Court since 1965 to date. Under the circumstances and in
conformity with Art. 2208, No. 11, the Civil Code of the Philippines, it is but just,
fair and equitable that the Association be permitted to recover attorney's fees as
claimed in its tenth assignment of error.
1. In Case No. 1484-MC(1), the Court declares the strike of the Caltex Filipino
Managers and Supervisors' Association as legal in all respects and,
consequently, the forfeit of the employee status of J.J. Mapa, Dominador
Mangalino and Herminigildo Mandanas is set aside. The Company is hereby
ordered to reinstate J.J. Mapa and Dominador Mangalino to their former
positions without loss of seniority and privileges, with backwages from the time of
dismissal on July 1, 1969. Since Herminigildo Mandanas appears to have
voluntarily left the Company, no reinstatement is ordered as to him.
2. In Case No. 4344-ULP, the Court finds the Company B.F. Edwards and W.E.
Menefee guilty of unfair labor practices and they are therefore ordered to cease
and desist from the same. In this connection, the Company is furthermore
directed to pay backwages to the striking employees from April 22, 1965 to May
30, 1965 and to pay attorney's fees which are hereby fixed at P20,000.00.
G.R. No. L-20303 September 27, 1967
CASTRO, J.:
The vital issue in this case is whether the dismissal of the eight (8) respondent
employees by the petitioner Republic Bank (hereinafter referred to as the Bank)
constituted an unfair labor practice within the meaning and intendment of the
Industrial Peace Act (Republic Act 875). The Court of Industrial Relations (CIR)
found it did and its decision is now on appeal before us. The Bank maintains that
the discharge was for cause.
The Bank had in its employ the respondents Rosendo T. Resuello, Benjamin
Jara, Florencio Allasas, Domingo B. Jola, Diosdado S. Mendiola, Teodoro de la
Cruz, Narciso Macaraeg and Mauro A. Rovillos. On July 12, 1958 it discharged
Jola and, a few days after (July 18, 1958), the rest of respondents, for having
written and published "a patently libelous letter . . . tending to cause the dishonor,
discredit or contempt not only of officers and employees of this bank, but also of
your employer, the bank itself."
The letter referred to was a letter-charge which the respondents had written to
the bank president, demanding his resignation on the grounds of immorality,
nepotism in the appointment and favoritism as well as discrimination in the
promotion of bank employees. The letter, dated July 9, 1958, is hereunder
reproduced in full:
The Bank moved for the dismissal of the complaint, contending that respondents
were discharged not for union activities but for having written and published a
libelous letter against the bank president. The court denied the motion on the
basis of its decision in another case1 in which it ruled that section 4(a) (5) applies
to cases in which an employee is dismissed or discriminated against for having
filed "any charges against his employer." Whereupon the case was heard.
In 1960, however, this Court overruled the decision of the CIR in the Royal
Interocean case and held that "the charge, the filing of which is the cause of the
dismissal of the employee, must be related to his right to self-organization in
order to give rise to unfair labor practice on the part of the employer," because
"under subsection 5 of section 4(a), the employee's (1) having filed charges or
(2) having given testimony or (3) being about to give testimony, are modified by
'under this Act' appearing after the last item."2The Bank therefore renewed its
motion to dismiss, but the court held the motion in abeyance and proceeded with
the hearing.
On July 4, 1962 the court rendered a decision finding the Bank guilty of unfair
labor practice and ordering it to reinstate the respondents, with full back wages
and without loss of seniority and other privileges. This decision was affirmed by
the court en banc on August 9, 1962.
Relying upon Royal Interocean Lines v. CIR,3 and Lakas ng Pagkakaisa sa Peter
Paul v. CIR,4 the Bank argues that the court should have dismissed the complaint
because the discharge of the respondents had nothing to do with their union
activities as the latter in fact admitted at the hearing that the writing of the letter-
charge was not a "union action" but merely their "individual" act.
It will avail the Bank none to gloat over this admission of the respondents.
Assuming that the latter acted in their individual capacities when they wrote the
letter-charge they were nonetheless protected for they were engaged in
concerted activity, in the exercise of their right of self-organization that includes
concerted activity for mutual aid and protection,5 interference with which
constitutes an unfair labor practice under section 4(a)(1). This is the view of
some members of this Court. For, as has been aptly stated, the joining in
protests or demands, even by a small group of employees, if in furtherance of
their interests as such, is a concerted activity protected by the Industrial Peace
Act. It is not necessary that union activity be involved or that collective bargaining
be contemplated.6
In many respects, the case at bar is similar to National Labor Relations Board v.
Phoenix Mutual Life Insurance Co.7 The issue in that case was whether an
insurance company was guilty of an unfair labor practice in interfering with this
right of concerted activity by discharging two agents employed in a branch office.
The cashier of that office had resigned. The ten agents employed there held a
meeting and agreed to join in a letter to the home office objecting to the transfer
to their branch office of a cashier from another branch office to fill the position.
They discussed also the question whether to recommend the promotion of the
assistant cashier of their office as the proper alternative. They then chose one of
their number to compose a draft of the letter and submit it to them for further
discussion, approval and signature. The agent selected to write the letter and
another were discharged for their activities in this respect as being, so their
notices stated, completely unpleasant and far beyond the periphery of their
responsibility. In holding the company liable for unfair labor practice, the Circuit
Court of Appeals said:
A proper construction is that the employees shall have the right to engage
in concerted activities for their mutual aid or protection even though no
union activity be involved, for collective bargaining be contemplated. Here
Davis and Johnson and other salesmen were properly concerned with the
identity and capability of the new cashier. Conceding they had no authority
to appoint a new cashier or even recommend anyone for the appointment,
they had a legitimate interest in acting concertedly in making known their
views to management without being discharged for that interest. The
moderate conduct of Davis and Johnson and the others bore a reasonable
relation to conditions of their employment. It was therefore an unfair labor
practice for respondent to interfere with the exercise of the right of Davis
and Johnson and the other salesmen to engage in concerted activities for
their mutual aid or protection.
Other members of this Court agreed with the CIR that the Bank's conduct
violated section 4(a) (5) which makes it an unfair labor practice for an employer
to dismiss an employee for having filed charges under the Act.
Instead of stifling criticism, the Bank should have allowed the respondents to air
their grievances. Good faith bargaining required of the Bank an open mind and a
sincere desire to negotiate over grievances.11 The grievance committee, created
in the collective bargaining agreements, would have been an appropriate forum
for such negotiation. Indeed, the grievance procedure is a part of the continuous
process of collective bargaining.12 It is intended to promote, as it were, a friendly
dialogue between labor and management as a means of maintaining industrial
peace.
The Bank defends its action by invoking its right to discipline for what it calls the
respondents' libel in giving undue publicity to their letter-charge. To be sure, the
right of self-organization of employees is not unlimited,13 as the right of an
employer to discharge for cause14 is undenied. The Industrial Peace Act does not
touch the normal exercise of the right of an employer to select his employees or
to discharge them. It is directed solely against the abuse of that right by
interfering with the countervailing right of self-organization.15 But the difficulty
arises in determining whether in fact the discharges are made because of such a
separable cause or because of some other activities engaged in by employees
for the purpose of collective bargaining.16
It is for the CIR, in the first instance, to make the determination, "to weigh the
employer's expressed motive in determining the effect on the employees of
management's otherwise equivocal act."17 For the Act does not undertake the
impossible task of specifying in precise and unmistakable language each incident
which constitutes an unfair labor practice. Rather, it leaves to the court the work
of applying the Act's general prohibitory language in the light of infinite
combinations of events which may be charged as violative of its terms. 18 As the
Circuit Court of Appeals puts it:
What we have just essayed underscores at once the difference between Royal
Interocean and Lakas ng Pagkakaisa on the one hand and this case on the
other. In Royal Interocean, the employee's letter to the home office, for writing
which she was dismissed, complained of the local manager's "inconsiderate and
untactful attitude"20 — a grievance which, the court found, "had nothing to do with
or did not arise from her union activities." Nor did the court find evidence of
discriminatory discharge in Lakas ng Pagkakaisa as the letter, which the
employee wrote to the mother company in violation of the local company's rule,
denounced "wastage of company funds." In contrast, the express finding of the
court in this case was that the dismissal of the respondents was made on
account of the letter they had written, in which they demanded the resignation of
the bank president for a number of reasons touching labor-management relations
— reasons which not even the Bank's judgment that the respondents had
committed libel could excuse it for making summary discharges21 in disregard of
its duty to bargain collectively.
In final sum and substance, this Court is in unanimity that the Bank's conduct,
identified as an interference with the employees' right of self-organization, or as a
retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair
labor practice within the meaning and intendment of section 4(a) of the Industrial
Peace Act.
Separate Opinions
The opinion of the Court in this highly significant unfair labor practice case, one
of first impression, easily commends itself for approval. The relevant facts are set
forth in all fullness and with due care. The position of the Court united as it is on
an unfair labor practice having been committed, but not quite fully agreed as to
which particular subsection of the legal provision was violated, is delineated with
precision. With the explicit acknowledgement there made that some members of
the Court are of the belief that what was done by the Republic Bank here
amounted to "interference" and with the writer being of the persuasion that it
could be categorized in line with the statute as "interference, restraint or
coercion," a few words as to why this view is entertained may not be
inappropriate.
No one can doubt that we are in the process of evolving an indigenous labor
jurisprudence. Notwithstanding the clearly American background of the Industrial
Peace Act, based as it is mainly on the Wagner Act,1 labor relations in the
Philippines with their peculiar problems and the ingenuity of Filipino lawyers have
resulted in a growing body of decisions notable for their suitability to local
condition and their distinctly local flavor. This is as it should be.
The present case affords one such instance. The wealth of adjudication by both
judicial and administrative agencies in the United States notwithstanding the
diligent and earnest search for a ruling based on a similar fact-situation yielded
no case precisely in point. What does it signify? At the very least, it may indicate
that while the problem posed could have arisen there, this particular response of
labor was quite unique. On the assumption which I have here hypothetically
made that there was indeed a valid cause for grievance, a more diplomatic
approach could have been attempted. Or at the very least the procedure
indicated for the adjustment of a grievance could have been followed. That was
not done. What respondents did was to issue an ultimatum.
Collective bargaining whether in its formative stage preparatory to a labor
contract or in the adjustment of a labor problem in accordance with the procedure
set forth in an existing agreement presupposes the give-and-take of discussion.
No party adopts, at least in its initial stages, a hard-line position, from which there
can be no retreat. That was not the situation here. Respondents as labor leaders
appeared adamantine in their attitude to terminate the services of the then
president of the Republic Savings Bank. Nor did they mince words in describing
his alleged misdeeds. They were quite certain that he had offended most
grievously. They wanted him out. There was no room for discussion.
Nonetheless, concurrence with the decision arrived at by the Court is called for in
view of their mass dismissal. Under the circumstances, the supervisors union,
the Republic Savings Bank employees union, the Republic Savings Bank
security guards union, and the Republic Savings Bank supervisors union were
left leaderless. For collective bargaining to be meaningful, there must be two
parties, one representing management and the other representing the union. Nor
could management select who would represent the latter or with whom to deal,
otherwise in effect there would be only one party. Obviously there would then be
no bargaining. 1aw phîl.nèt
PANGANIBAN, J.:
Although the employers have shown that respondents performed work that was
seasonal in nature, they failed to prove that the latter worked only for the duration
of one particular season. In fact, petitioners do not deny that these workers have
served them for several years already. Hence, they are regular — not seasonal
— employees.
The Case
Before the Court is a Petition for Review under Rule 45 of the Rules of Court,
seeking to set aside the February 20, 2001 Decision of the Court of
Appeals 1 (CA) in CA-GR SP No. 51033. The dispositive part of the Decision
reads:
The Facts
"Indeed, it would appear that respondents did not look with favor workers'
having organized themselves into a union. Thus, when complainant union
was certified as the collective bargaining representative in the certification
elections, respondents under the pretext that the result was on appeal,
refused to sit down with the union for the purpose of entering into a
collective bargaining agreement. Moreover, the workers including
complainants herein were not given work for more than one month. In
protest, complainants staged a strike which was however settled upon the
signing of a Memorandum of Agreement which stipulated among others
that:
'a) The parties will initially meet for CBA negotiations on the 11th day
of January 1991 and will endeavor to conclude the same within thirty
(30) days.
'b) The management will give priority to the women workers who are
members of the union in case work relative . . . or amount[ing] to
gahit and [dipol] arises.
'c) Ariston Eruela Jr. will be given back his normal work load which is
six (6) days in a week.
'd) The management will provide fifteen (15) wagons for the workers
and that existing workforce prior to the actual strike will be given
priority. However, in case the said workforce would not be enough,
the management can hire additional workers to supplement them.
'e) The management will not anymore allow the scabs, numbering
about eighteen (18) workers[,] to work in the hacienda; and
'f) The union will immediately lift the picket upon signing of this
agreement.'
'Whereas parties to the present dispute agree to settle the case amicably
once and for all;
'1. That the list of the names of affected union members hereto
attached and made part of this agreement shall be referred to the
Hacienda payroll of 1990 and determine whether or not this
concerned Union members are hacienda workers;
"Pursuant thereto, the parties subsequently met and the Minutes of the
Conciliation Meeting showed as follows:
'The meeting started at 10:00 A.M. A list of employees was
submitted by Atty. Tayko based on who received their 13th month
pay. The following are deemed not considered employees:
1. Luisa Rombo
2. Ramona Rombo
3. Bobong Abrega
4. Boboy Silva
"But for all their persistence, the risk they had to undergo in conducting a
strike in the face of overwhelming odds, complainants in an ironic twist of
fate now find themselves being accused of 'refusing to work and being
choosy in the kind of work they have to perform'." 5 (Citations omitted)
The CA affirmed that while the work of respondents was seasonal in nature, they
were considered to be merely on leave during the off-season and were therefore
still employed by petitioners. Moreover, the workers enjoyed security of tenure.
Any infringement upon this right was deemed by the CA to be tantamount to
illegal dismissal.
The appellate court found neither "rhyme nor reason in petitioner's argument that
it was the workers themselves who refused to or were choosy in their work." As
found by the NLRC, the record of this case is "replete with complainants'
persistence and dogged determination in going back to work." 6
The CA likewise concurred with the NLRC's finding that petitioners were guilty of
unfair labor practice.
Issues
"A. Whether or not the Court of Appeals erred in holding that respondents,
admittedly seasonal workers, were regular employees, contrary to the
clear provisions of Article 280 of the Labor Code, which categorically state
that seasonal employees are not covered by the definition of regular
employees under paragraph 1, nor covered under paragraph 2 which
refers exclusively to casual employees who have served for at least one
year.
"B. Whether or not the Court of Appeals erred in rejecting the ruling in
Mercado, . . . and relying instead on rulings which are not directly
applicable to the case at bench, viz, Philippine Tobacco, Bacolod-Murcia,
and Gaco, . . .
First Issue:
Regular Employment
At the outset, we must stress that only errors of law are generally reviewed by
this Court in petitions for review on certiorari of CA decisions. 9 Questions of fact
are not entertained. 10 The Court is not a trier of facts and, in labor cases, this
doctrine applies with greater force. 11 Factual questions are for labor tribunals to
resolve. 12 In the present case, these have already been threshed out by the
NLRC. Its findings were affirmed by the appellate court.
Contrary to petitioners' contention, the CA did not err when it held that
respondents were regular employees.
". . . [T]he fact that [respondents] do not work continuously for one whole
year but only for the duration of the . . . season does not detract from
considering them in regular employment since in a litany of cases this
Court has already settled that seasonal workers who are called to work
from time to time and are temporarily laid off during off-season are not
separated from service in said period, but merely considered on leave until
re-employed." 14
The CA did not err when it ruled that Mercado v. NLRC 15 was not applicable to
the case at bar. In the earlier case, the workers were required to perform phases
of agricultural work for a definite period of time, after which their services would
be available to any other farm owner. They were not hired regularly and
repeatedly for the same phase/s of agricultural work, but on and off for any single
phase thereof. On the other hand, herein respondents, having performed the
same tasks for petitioners every season for several years, are considered the
latter's regular employees for their respective tasks. Petitioners' eventual refusal
to use their services — even if they were ready, able and willing to perform their
usual duties whenever these were available — and hiring of other workers to
perform the tasks originally assigned to respondents amounted to illegal
dismissal of the latter.
The Court finds no reason to disturb the CA's dismissal of what petitioners claim
was their valid exercise of a management prerogative. The sudden changes in
work assignments reeked of bad faith. These changes were implemented
immediately after respondents had organized themselves into a union and
started demanding collective bargaining. Those who were union members were
effectively deprived of their jobs. Petitioners' move actually amounted to
unjustified dismissal of respondents, in violation of the Labor Code.
"Where there is no showing of clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and the
burden is on the employer to prove that the termination was for a valid and
authorized cause." 16 In the case at bar, petitioners failed to prove any such
cause for the dismissal of respondents who, as discussed above, are regular
employees.
Second Issue:
The NLRC also found herein petitioners guilty of unfair labor practice. It ruled as
follows:
We uphold the CA's affirmation of the above findings. Indeed, factual findings of
labor officials, who are deemed to have acquired expertise in matters within their
respective jurisdictions, are generally accorded not only respect but even finality.
Their findings are binding on the Supreme Court. 18 Verily, their conclusions are
accorded great weight upon appeal, especially when supported by substantial
evidence. 19 Consequently, the Court is not duty-bound to delve into the accuracy
of their factual findings, in the absence of a clear showing that these were
arbitrary and bereft of any rational basis." 20
The finding of unfair labor practice done in bad faith carries with it the sanction of
moral and exemplary damages." 21
CASTRO, J.:
Two of the lawyers of the Unions then were Felipe Enaje and Ramon Garcia; the
latter was formerly the secretary-treasurer of the FFW and acting president of the
Insular Life/FGU unions and the Insular Life Building Employees Association.
Garcia, as such acting president, in a circular issued in his name and signed by
him, tried to dissuade the members of the Unions from disaffiliating with the FFW
and joining the National Association of Trade Unions (NATU), to no avail.
Enaje and Garcia soon left the FFW and secured employment with the Anti-
Dummy Board of the Department of Justice. Thereafter, the Companies hired
Garcia in the latter part of 1956 as assistant corporate secretary and legal
assistant in their Legal Department, and he was soon receiving P900 a month, or
P600 more than he was receiving from the FFW. Enaje was hired on or about
February 19, 1957 as personnel manager of the Companies, and was likewise
made chairman of the negotiating panel for the Companies in the collective
bargaining with the Unions.
In a letter dated September 16, 1957, the Unions jointly submitted proposals to
the Companies for a modified renewal of their respective collective bargaining
contracts which were then due to expire on September 30, 1957. The parties
mutually agreed and to make whatever benefits could be agreed upon
retroactively effective October 1, 1957.
From April 25 to May 6, 1958, the parties negotiated on the labor demands but
with no satisfactory result due to a stalemate on the matter of salary increases.
On May 13, 1958 the Unions demanded from the Companies final counter-
proposals on their economic demands, particularly on salary increases. Instead
of giving counter-proposals, the Companies on May 15, 1958 presented facts
and figures and requested the Unions to submit a workable formula which would
justify their own proposals, taking into account the financial position of the former.
Forthwith the Unions voted to declare a strike in protest against what they
considered the Companies' unfair labor practices.
On May 20, 1958 the Unions went on strike and picketed the offices of the
Insular Life Building at Plaza Moraga.
On May 21, 1958 the Companies through their acting manager and president,
the respondent Jose M. Olbes (hereinafter referred to as the respondent Olbes),
sent to each of the strikers a letter (exhibit A) quoted verbatim as follows:
The Unions, however, continued on strike, with the exception of a few unionists
who were convinced to desist by the aforesaid letter of May 21, 1958.
From the date the strike was called on May 21, 1958, until it was called off on
May 31, 1958, some management men tried to break thru the Unions' picket
lines. Thus, on May 21, 1958 Garcia, assistant corporate secretary, and Vicente
Abella, chief of the personnel records section, respectively of the Companies,
tried to penetrate the picket lines in front of the Insular Life Building. Garcia, upon
approaching the picket line, tossed aside the placard of a picketer, one Paulino
Bugay; a fight ensued between them, in which both suffered injuries. The
Companies organized three bus-loads of employees, including a photographer,
who with the said respondent Olbes, succeeded in penetrating the picket lines in
front of the Insular Life Building, thus causing injuries to the picketers and also to
the strike-breakers due to the resistance offered by some picketers.
Alleging that some non-strikers were injured and with the use of photographs as
evidence, the Companies then filed criminal charges against the strikers with the
City Fiscal's Office of Manila. During the pendency of the said cases in the
fiscal's office, the Companies likewise filed a petition for injunction with damages
with the Court of First Instance of Manila which, on the basis of the pendency of
the various criminal cases against striking members of the Unions, issued on
May 31, 1958 an order restraining the strikers, until further orders of the said
court, from stopping, impeding, obstructing, etc. the free and peaceful use of the
Companies' gates, entrance and driveway and the free movement of persons
and vehicles to and from, out and in, of the Companies' building.
On the same date, the Companies, again through the respondent Olbes, sent
individually to the strikers a letter (exhibit B), quoted hereunder in its entirety:
Our position remains unchanged and the strike has made us even
more convinced of our decision.
We do not know how long you intend to stay out, but we cannot hold
your positions open for long. We have continued to operate and will
continue to do so with or without you.
So it is now.
Incidentally, all of the more than 120 criminal charges filed against the members
of the Unions, except three (3), were dismissed by the fiscal's office and by the
courts. These three cases involved "slight physical injuries" against one striker
and "light coercion" against two others.
At any rate, because of the issuance of the writ of preliminary injunction against
them as well as the ultimatum of the Companies giving them until June 2, 1958 to
return to their jobs or else be replaced, the striking employees decided to call off
their strike and to report back to work on June 2, 1958.
However, before readmitting the strikers, the Companies required them not only
to secure clearances from the City Fiscal's Office of Manila but also to be
screened by a management committee among the members of which were
Enage and Garcia. The screening committee initially rejected 83 strikers with
pending criminal charges. However, all non-strikers with pending criminal
charges which arose from the breakthrough incident were readmitted
immediately by the Companies without being required to secure clearances from
the fiscal's office. Subsequently, when practically all the strikers had secured
clearances from the fiscal's office, the Companies readmitted only some but
adamantly refused readmission to 34 officials and members of the Unions who
were most active in the strike, on the ground that they committed "acts inimical to
the interest of the respondents," without however stating the specific acts
allegedly committed. Among those who were refused readmission are Emiliano
Tabasondra, vice president of the Insular Life Building Employees' Association-
NATU; Florencio Ibarra, president of the FGU Insurance Group Workers &
Employees Association-NATU; and Isagani Du Timbol, acting president of the
Insular Life Assurance Co., Ltd. Employees Association-NATU. Some 24 of the
above number were ultimately notified months later that they were being
dismissed retroactively as of June 2, 1958 and given separation pay checks
computed under Rep. Act 1787, while others (ten in number) up to now have not
been readmitted although there have been no formal dismissal notices given to
them.
On July 29, 1958 the CIR prosecutor filed a complaint for unfair labor practice
against the Companies under Republic Act 875. The complaint specifically
charged the Companies with (1) interfering with the members of the Unions in the
exercise of their right to concerted action, by sending out individual letters to
them urging them to abandon their strike and return to work, with a promise of
comfortable cots, free coffee and movies, and paid overtime, and, subsequently,
by warning them that if they did not return to work on or before June 2, 1958,
they might be replaced; and (2) discriminating against the members of the
Unions as regards readmission to work after the strike on the basis of their union
membership and degree of participation in the strike.
On August 4, 1958 the Companies filed their answer denying all the material
allegations of the complaint, stating special defenses therein, and asking for the
dismissal of the complaint.
After trial on the merits, the Court of Industrial Relations, through Presiding
Judge Arsenio Martinez, rendered on August 17, 1965 a decision dismissing the
Unions' complaint for lack of merit. On August 31, 1965 the Unions seasonably
filed their motion for reconsideration of the said decision, and their supporting
memorandum on September 10, 1965. This was denied by the Court of Industrial
Relations en banc in a resolution promulgated on October 20, 1965.
Hence, this petition for review, the Unions contending that the lower court erred:
I. The respondents contend that the sending of the letters, exhibits A and B,
constituted a legitimate exercise of their freedom of speech. We do not agree.
The said letters were directed to the striking employees individually — by
registered special delivery mail at that — without being coursed through the
Unions which were representing the employees in the collective bargaining.
Indeed, some such similar actions are illegal as constituting unwarranted acts of
interference. Thus, the act of a company president in writing letters to the
strikers, urging their return to work on terms inconsistent with their union
membership, was adjudged as constituting interference with the exercise of his
employees' right to collective bargaining (Lighter Publishing, CCA 7th, 133 F2d
621). It is likewise an act of interference for the employer to send a letter to all
employees notifying them to return to work at a time specified therein, otherwise
new employees would be engaged to perform their jobs. Individual solicitation of
the employees or visiting their homes, with the employer or his representative
urging the employees to cease union activity or cease striking, constitutes unfair
labor practice. All the above-detailed activities are unfair labor practices because
they tend to undermine the concerted activity of the employees, an activity to
which they are entitled free from the employer's molestation.1
Indeed, when the respondents offered reinstatement and attempted to "bribe" the
strikers with "comfortable cots," "free coffee and occasional movies," "overtime"
pay for "work performed in excess of eight hours," and "arrangements" for their
families, so they would abandon the strike and return to work, they were guilty of
strike-breaking and/or union-busting and, consequently, of unfair labor practice. It
is equivalent to an attempt to break a strike for an employer to offer
reinstatement to striking employees individually, when they are represented by a
union, since the employees thus offered reinstatement are unable to determine
what the consequences of returning to work would be.
Likewise violative of the right to organize, form and join labor organizations are
the following acts: the offer of a Christmas bonus to all "loyal" employees of a
company shortly after the making of a request by the union to bargain; wage
increases given for the purpose of mollifying employees after the employer has
refused to bargain with the union, or for the purpose of inducing striking
employees to return to work; the employer's promises of benefits in return for the
strikers' abandonment of their strike in support of their union; and the employer's
statement, made about 6 weeks after the strike started, to a group of strikers in a
restaurant to the effect that if the strikers returned to work, they would receive
new benefits in the form of hospitalization, accident insurance, profit-sharing, and
a new building to work in.2
Citing paragraph 5 of the complaint filed by the acting prosecutor of the lower
court which states that "the officers and members of the complainant unions
decided to call off the strike and return to work on June 2, 1958 by reason of the
injunction issued by the Manila Court of First Instance," the respondents contend
that this was the main cause why the strikers returned to work and not the letters,
exhibits A and B. This assertion is without merit. The circumstance that the
strikers later decided to return to work ostensibly on account of the injunctive writ
issued by the Court of First Instance of Manila cannot alter the intrinsic quality of
the letters, which were calculated, or which tended, to interfere with the
employees' right to engage in lawful concerted activity in the form of a strike.
Interference constituting unfair labor practice will not cease to be such simply
because it was susceptible of being thwarted or resisted, or that it did not
proximately cause the result intended. For success of purpose is not, and should
not, be the criterion in determining whether or not a prohibited act constitutes
unfair labor practice.
picketers criminal charges, only three of which were not dismissed, and these
three only for slight misdemeanors. As a result of these criminal actions, the
respondents were able to obtain an injunction from the court of first instance
restraining the strikers from stopping, impeding, obstructing, etc. the free and
peaceful use of the Companies' gates, entrance and driveway and the free
movement of persons and vehicles to and from, out and in, of the Companies'
buildings. On the same day that the injunction was issued, the letter, Exhibit B,
was sent — again individually and by registered special delivery mail — to the
strikers, threatening them with dismissal if they did not report for work on or
before June 2, 1958. But when most of the petitioners reported for work, the
respondents thru a screening committee — of which Ramon Garcia was a
member — refused to admit 63 members of the Unions on the ground of
"pending criminal charges." However, when almost all were cleared of criminal
charges by the fiscal's office, the respondents adamantly refused admission to 34
officials and union members. It is not, however, disputed that all-non-strikers with
pending criminal charges which arose from the breakthrough incident of May 23,
1958 were readmitted immediately by the respondents. Among the non-strikers
with pending criminal charges who were readmitted were Generoso Abella,
Enrique Guidote, Emilio Carreon, Antonio Castillo, Federico Barretto, Manuel
Chuidian and Nestor Cipriano. And despite the fact that the fiscal's office found
no probable cause against the petitioning strikers, the Companies adamantly
refused admission to them on the pretext that they committed "acts inimical to the
interest of the respondents," without stating specifically the inimical acts allegedly
committed. They were soon to admit, however, that these alleged inimical acts
were the same criminal charges which were dismissed by the fiscal and by the
courts..
Verily, the above actuations of the respondents before and after the issuance of
the letters, exhibit A and B, yield the clear inference that the said letters formed
of the respondents scheme to preclude if not destroy unionism within them.
To justify the respondents' threat to dismiss the strikers and secure replacements
for them in order to protect and continue their business, the CIR held the
petitioners' strike to be an economic strike on the basis of exhibit 4 (Notice of
Strike) which states that there was a "deadlock in collective bargaining" and on
the strength of the supposed testimonies of some union men who did not actually
know the very reason for the strike. It should be noted that exhibit 4, which was
filed on January 27, 1958, states, inter alia:
Thirty (30) days from receipt of this notice by the Office, this [sic]
unions intends to go on strike against
THE INSULAR LIFE ASSURANCE CO., LTD.
Plaza Moraga, Manila
However, the employees did not stage the strike after the thirty-day period,
reckoned from January 27, 1958. This simply proves that the reason for the strike
was not the deadlock on collective bargaining nor any lack of economic
concessions. By letter dated April 15, 1958, the respondents categorically stated
what they thought was the cause of the "Notice of Strike," which so far as
material, reads:
3. Because you did not see fit to agree with our position on the union
shop, you filed a notice of strike with the Bureau of Labor Relations
on 27 January 1958, citing `deadlock in collective bargaining' which
could have been for no other issue than the union shop." (exhibit 8,
letter dated April 15, 1958.)
The strike took place nearly four months from the date the said notice of strike
was filed. And the actual and main reason for the strike was, "When it became
crystal clear the management double crossed or will not negotiate in good faith, it
is tantamount to refusal collectively and considering the unfair labor practice in
the meantime being committed by the management such as the sudden
resignation of some unionists and [who] became supervisors without increase in
salary or change in responsibility, such as the coercion of employees, decided to
declare the strike." (tsn., Oct. 14, 1958, p. 14.) The truth of this assertion is amply
proved by the following circumstances: (1) it took the respondents six (6) months
to consider the petitioners' proposals, their only excuse being that they could not
go on with the negotiations if the petitioners did not drop the demand for union
shop (exh. 7, respondents' letter dated April 7, 1958); (2) when the petitioners
dropped the demand for union shop, the respondents did not have a counter-
offer to the petitioners' demands. Sec. 14 of Rep. Act 875 required the
respondents to make a reply to the petitioners' demands within ten days from
receipt thereof, but instead they asked the petitioners to give a "well reasoned,
workable formula which takes into account the financial position of the group
companies." (tsn., Sept. 8, 1958, p. 62; tsn., Feb. 26, 1969, p. 49.)
II. Exhibit H imposed three conditions for readmission of the strikers, namely: (1)
the employee must be interested in continuing his work with the group
companies; (2) there must be no criminal charges against him; and (3) he must
report for work on June 2, 1958, otherwise he would be replaced. Since the
evidence shows that all the employees reported back to work at the respondents'
head office on June 2, 1953, they must be considered as having complied with
the first and third conditions.
Our point of inquiry should therefore be directed at whether they also complied
with the second condition. It is not denied that when the strikers reported for work
on June 2, 1958, 63 members of the Unions were refused readmission because
they had pending criminal charges. However, despite the fact that they were able
to secure their respective clearances 34 officials and union members were still
refused readmission on the alleged ground that they committed acts inimical to
the Companies. It is beyond dispute, however, that non-strikers who also had
criminal charges pending against them in the fiscal's office, arising from the same
incidents whence the criminal charges against the strikers evolved, were readily
readmitted and were not required to secure clearances. This is a clear act of
discrimination practiced by the Companies in the process of rehiring and is
therefore a violation of sec. 4(a) (4) of the Industrial Peace Act.
The respondents did not merely discriminate against all the strikers in general.
They separated the active from the less active unionists on the basis of their
militancy, or lack of it, on the picket lines. Unionists belonging to the first category
were refused readmission even after they were able to secure clearances from
the competent authorities with respect to the criminal charges filed against them.
It is significant to note in this connection that except for one union official who
deserted his union on the second day of the strike and who later participated in
crashing through the picket lines, not a single union officer was taken back to
work. Discrimination undoubtedly exists where the record shows that the union
activity of the rehired strikers has been less prominent than that of the strikers
who were denied reinstatement.
Equally significant is the fact that while the management and the members of the
screening committee admitted the discrimination committed against the strikers,
they tossed back and around to each other the responsibility for the
discrimination. Thus, Garcia admitted that in exercising for the management the
authority to screen the returning employees, the committee admitted the non-
strikers but refused readmission to the strikers (tsn., Feb. 6, 1962, pp. 15-19, 23-
29). Vicente Abella, chairman of the management's screening committee, while
admitting the discrimination, placed the blame therefor squarely on the
management (tsn., Sept. 20, 1960, pp. 7-8, 14-18). But the management,
speaking through the respondent Olbes, head of the Companies, disclaimed
responsibility for the discrimination. He testified that "The decision whether to
accept or not an employee was left in the hands of that committee that had been
empowered to look into all cases of the strikers." (tsn., Sept. 6, 1962, p. 19.)
This will confirm the termination of your employment with the Insular
Life-FGU Insurance Group as of 2 June 1958.
The termination of your employment was due to the fact that you
committed acts of misconduct while picketing during the last strike.
Because this may not constitute sufficient cause under the law to
terminate your employment without pay, we are giving you the
amount of P1,930.32 corresponding to one-half month pay for every
year of your service in the Group Company.
(Sgd.) JOSE M.
OLBES
President,
Insurance Life
Acting President,
FGU.
Indeed, the individual cases of dismissed officers and members of the striking
unions do not indicate sufficient basis for dismissal.
At any rate, it has been held that mere failure to report for work after notice to
return, does not constitute abandonment nor bar reinstatement. In one case, the
U.S. Supreme Court held that the taking back of six of eleven men constituted
discrimination although the five strikers who were not reinstated, all of whom
were prominent in the union and in the strike, reported for work at various times
during the next three days, but were told that there were no openings. Said the
Court:
... The Board found, and we cannot say that its finding is
unsupported, that, in taking back six union men, the respondent's
officials discriminated against the latter on account of their union
activities and that the excuse given that they did not apply until after
the quota was full was an afterthought and not the true reason for
the discrimination against them. (NLRB v. Mackay Radio &
Telegraph Co., 304 U.S. 333, 58 Sup. Ct. 904, 82 L. Ed. 1381)
(Mathews, Labor Relations and the Law, p. 725, 728)
The respondents' allegation that Tabasondra should have returned after being
refused readmission on June 2, 1958, is not persuasive. When the employer puts
off reinstatement when an employee reports for work at the time agreed, we
consider the employee relieved from the duty of returning further.
Sixto Tongos was dismissed allegedly because he revealed that despite the fact
that the Companies spent more than P80,000 for the vacation trips of officials,
they refused to grant union demands; hence, he betrayed his trust as an auditor
of the Companies. We do not find this allegation convincing. First, this accusation
was emphatically denied by Tongos on the witness stand. Gonzales, president of
one of the respondent Companies and one of the officials referred to, took a trip
abroad in 1958. Exchange controls were then in force, and an outgoing traveller
on a combined business and vacation trip was allowed by the Central Bank, per
its Circular 52 (Notification to Authorized Agent Banks) dated May 9, 1952, an
allocation of $1,000 or only P2,000, at the official rate of two pesos to the dollar,
as pocket money; hence, this was the only amount that would appear on the
books of the Companies. It was only on January 21, 1962, per its Circular 133
(Notification to Authorized Agent Banks), that the Central Bank lifted the
exchange controls. Tongos could not therefore have revealed an amount bigger
than the above sum. And his competence in figures could not be doubted
considering that he had passed the board examinations for certified public
accountants. But assuming arguendo that Tongos indeed revealed the true
expenses of Gonzales' trip — which the respondents never denied or tried to
disprove — his statements clearly fall within the sphere of a unionist's right to
discuss and advertise the facts involved in a labor dispute, in accordance with
section 9(a)(5) of Republic Act 875 which guarantees the untramelled exercise
by striking employees of the right to give "publicity to the existence of, or the fact
involved in any labor dispute, whether by advertising, speaking, patrolling or by
any method not involving fraud or violence." Indeed, it is not only the right, it is as
well the duty, of every unionist to advertise the facts of a dispute for the purpose
of informing all those affected thereby. In labor disputes, the combatants are
expected to expose the truth before the public to justify their respective demands.
Being a union man and one of the strikers, Tongos was expected to reveal the
whole truth on whether or not the respondent Companies were justified in
refusing to accede to union demands. After all, not being one of the supervisors,
he was not a part of management. And his statement, if indeed made, is but an
expression of free speech protected by the Constitution.
Free speech on both sides and for every faction on any side of the
labor relation is to me a constitutional and useful right. Labor is free
... to turn its publicity on any labor oppression, substandard wages,
employer unfairness, or objectionable working conditions. The
employer, too, should be free to answer and to turn publicity on the
records of the leaders of the unions which seek the confidence of his
men ... (Concurring opinion of Justice Jackson in Thomas v. Collins,
323 U.S. 516, 547, 65 Sup. Ct. 315, 89 L. Ed. 430.) (Mathews, Labor
Relations and the Law, p. 591.)
Pacifico Ner, Paulino Bugay, Jose Garcia, Narciso Daño, Vicente Alsol and
Hermenigildo Ramirez, opined the lower court, were constructively dismissed by
non-readmission allegedly because they not only prevented Ramon Garcia,
assistant corporate secretary, and Vicente Abella, chief of the personnel records
section of the Companies, from entering the Companies' premises on May 21,
1958, but they also caused bruises and abrasions on Garcia's chest and
forehead — acts considered inimical to the interest of the respondents. The
Unions, upon the other hand, insist that there is complete lack of evidence that
Ner took part in pushing Garcia; that it was Garcia who elbowed his way through
the picket lines and therefore Ner shouted "Close up," which the picketers did;
and that Garcia tossed Paulino Bugay's placard and a fight ensued between
them in which both suffered injuries. But despite these conflicting versions of
what actually happened on May 21, 1958, there are grounds to believe that the
picketers are not responsible for what happened. The picketing on May 21,
lâw phî1.ñèt
1958, as reported in the police blotter, was peaceful (see Police blotter report,
exh. 3 in CA-G.R. No. 25991-R of the Court of Appeals, where Ner was
acquitted). Moreover, although the Companies during the strike were holding
offices at the Botica Boie building at Escolta, Manila; Tuason Building at San
Vicente Street, Manila; and Ayala, Inc. offices at Makati, Rizal, Garcia, the
assistant corporate secretary, and Abella, the chief of the personnel records
section, reported for work at the Insular Life Building. There is therefore a
reasonable suggestion that they were sent to work at the latter building to create
such an incident and have a basis for filing criminal charges against the
petitioners in the fiscal's office and applying for injunction from the court of first
instance. Besides, under the circumstances the picketers were not legally bound
to yield their grounds and withdraw from the picket lines. Being where the law
expects them to be in the legitimate exercise of their rights, they had every
reason to defend themselves and their rights from any assault or unlawful
transgression. Yet the police blotter, about adverted to, attests that they did not
resort to violence.
The heated altercations and occasional blows exchanged on the picket line do
not affect or diminish the right to strike. Persuasive on this point is the following
commentary: .
We think it must be conceded that some disorder is unfortunately
quite usual in any extensive or long drawn out strike. A strike is
essentially a battle waged with economic weapons. Engaged in it
are human beings whose feelings are stirred to the depths. Rising
passions call forth hot words. Hot words lead to blows on the picket
line. The transformation from economic to physical combat by those
engaged in the contest is difficult to prevent even when cool heads
direct the fight. Violence of this nature, however much it is to be
regretted, must have been in the contemplation of the Congress
when it provided in Sec. 13 of Act 29 USCA Sec. 163, that nothing
therein should be construed so as to interfere with or impede or
diminish in any way the right to strike. If this were not so, the rights
afforded to employees by the Act would indeed be illusory. We
accordingly recently held that it was not intended by the Act that
minor disorders of this nature would deprive a striker of the
possibility of reinstatement. (Republic Steel Corp. v. N. L. R. B., 107
F2d 472, cited in Mathews, Labor Relations and the Law, p. 378)
Hence the incident that occurred between Ner, et al. and Ramon Garcia was but
a necessary incident of the strike and should not be considered as a bar to
reinstatement. Thus it has been held that:
In cases involving misdemeanors the board has generally held that unlawful acts
are not bar to reinstatement. (Teller, Labor Disputes and Collective
Bargaining, Id., p. 854, citing Ford Motor Company, 23 NLRB No. 28.)
Finally, it is not disputed that despite the pendency of criminal charges against
non-striking employees before the fiscal's office, they were readily admitted, but
those strikers who had pending charges in the same office were refused
readmission. The reinstatement of the strikers is thus in order.
Lastly, the lower Court justified the constructive dismissal of Florencio Ibarra
allegedly because he committed acts inimical to the interest of the respondents
when, as president of the FGU Workers and Employees Association-NATU, he
advised the strikers that they could use force and violence to have a successful
picket and that picketing was precisely intended to prevent the non-strikers and
company clients and customers from entering the Companies' buildings. Even if
this were true, the record discloses that the picket line had been generally
peaceful, and that incidents happened only when management men made
incursions into and tried to break the picket line. At any rate, with or without the
advice of Ibarra, picketing is inherently explosive. For, as pointed out by one
author, "The picket line is an explosive front, charged with the emotions and
fierce loyalties of the union-management dispute. It may be marked by colorful
name-calling, intimidating threats or sporadic fights between the pickets and
those who pass the line." (Mathews, Labor Relations and the Law, p. 752). The
picket line being the natural result of the respondents' unfair labor practice,
Ibarra's misconduct is at most a misdemeanor which is not a bar to
reinstatement. Besides, the only evidence presented by the Companies
regarding Ibarra's participation in the strike was the testimony of one Rodolfo
Encarnacion, a former member of the board of directors of the petitioner FGU
Insurance Group Workers and Employees Union-NATU, who became a
"turncoat" and who likewise testified as to the union activities of Atty. Lacsina,
Ricardo Villaruel and others (annex C, Decision, p. 27) — another matter which
emphasizes the respondents' unfair labor practice. For under the circumstances,
there is good ground to believe that Encarnacion was made to spy on the
actvities of the union members. This act of the respondents is considered
unjustifiable interference in the union activities of the petitioners and is unfair
labor practice.
IV. The lower court should have ordered the reinstatement of the officials and
members of the Unions, with full back wages from June 2, 1958 to the date of
their actual reinstatement to their usual employment. Because all too clear from
the factual and environmental milieu of this case, coupled with settled decisional
law, is that the Unions went on strike because of the unfair labor practices
committed by the respondents, and that when the strikers reported back for work
— upon the invitation of the respondents — they were discriminatorily dismissed.
The members and officials of the Unions therefore are entitled to reinstatement
with back pay.
And it is not a defense to reinstatement for the respondents to allege that the
positions of these union members have already been filled by replacements.
A corollary issue to which we now address ourselves is, from what date should
the backpay payable to the unionists be computed? It is now a settled doctrine
that strikers who are entitled to reinstatement are not entitled to back pay during
the period of the strike, even though it is caused by an unfair labor practice.
However, if they offer to return to work under the same conditions just before the
strike, the refusal to re-employ or the imposition of conditions amounting to unfair
labor practice is a violation of section 4(a) (4) of the Industrial Peace Act and the
employer is liable for backpay from the date of the offer (Cromwell Commercial
Employees and Laborers Union vs. Court of Industrial Relations, L-19778,
Decision, Sept. 30, 1964, 12 SCRA 124; Id., Resolution on motion for
reconsideration, 13 SCRA 258; see also Mathews, Labor Relations and the Law,
p. 730 and the cited cases). We have likewise ruled that discriminatorily
dismissed employees must receive backpay from the date of the act of
discrimination, that is, from the date of their discharge (Cromwell Commercial
Employees and Laborers Union vs. Court of Industrial Relations, supra).
The respondents notified the petitioner strikers to report back for work on June 2,
1958, which the latter did. A great number of them, however, were refused
readmission because they had criminal charges against them pending before the
fiscal's office, although non-strikers who were also facing criminal indictments
were readily readmitted. These strikers who were refused readmission on June
2, 1958 can thus be categorized as discriminatorily dismissed employees and are
entitled to backpay from said date. This is true even with respect to the
petitioners Jose Pilapil, Paulino Bugay, Jr. and Jose Garcia, Jr. who were found
guilty only of misdemeanors which are not considered sufficient to bar
reinstatement (Teller, Labor Disputes and Collective Bargaining, p. 854),
especially so because their unlawful acts arose during incidents which were
provoked by the respondents' men. However, since the employees who were
denied readmission have been out of the service of the Companies (for more
than ten years) during which they may have found other employment or other
means of livelihood, it is only just and equitable that whatever they may have
earned during that period should be deducted from their back wages to mitigate
somewhat the liability of the company, pursuant to the equitable principle that no
one is allowed to enrich himself at the expense of another (Macleod & Co. of the
Philippines v. Progressive Federation of Labor, 97 Phil. 205 [1955]).
The lower court gave inordinate significance to the payment to and acceptance
by the dismissed employees of separation pay. This Court has ruled that while
employers may be authorized under Republic Act 1052 to terminate employment
of employees by serving the required notice, or, in the absence thereof, by
paying the required compensation, the said Act may not be invoked to justify a
dismissal prohibited by law, e.g., dismissal for union activities.
Finally, we do not share the respondents' view that the findings of fact of the
Court of Industrial Relations are supported by substantial and credible proof. This
Court is not therefore precluded from digging deeper into the factual milieu of the
case (Union of Philippine Education Employees v. Philippine Education
Company, 91 Phil. 93; Lu Do & Lu Ym Corporation v. Philippine-Land-Air-Sea
Labor Union, 11 SCRA 134 [1964]).
V. The petitioners (15 of them) ask this Court to cite for contempt the respondent
Presiding Judge Arsenio Martinez of the Court of Industrial Relations and the
counsels for the private respondents, on the ground that the former wrote the
following in his decision subject of the instant petition for certiorari, while the
latter quoted the same on pages 90-91 of the respondents' brief: .
The two pertinent paragraphs in the above-cited decision * which contained the
underscored portions of the above citation read however as follows:
It is plain to the naked eye that the 60 un-underscored words of the paragraph
quoted by the respondent Judge do not appear in the pertinent paragraph of this
Court's decision in L-20179-81. Moreover, the first underscored sentence in the
quoted paragraph starts with "For it is settled ..." whereas it reads, "For it must be
remembered ...," in this Court's decision. Finally, the second and last underlined
sentence in the quoted paragraph of the respondent Judge's decision, appears
not in the same paragraph of this Court's decision where the other sentence is,
but in the immediately succeeding paragraph.
This apparent error, however, does not seem to warrant an indictment for
contempt against the respondent Judge and the respondents' counsels. We are
inclined to believe that the misquotation is more a result of clerical ineptitude than
a deliberate attempt on the part of the respondent Judge to mislead. We fully
realize how saddled with many pending cases are the courts of the land, and it is
not difficult to imagine that because of the pressure of their varied and
multifarious work, clerical errors may escape their notice. Upon the other hand,
the respondents' counsels have the prima facie right to rely on the quotation as it
appears in the respondent Judge's decision, to copy it verbatim, and to
incorporate it in their brief. Anyway, the import of the underscored sentences of
the quotation in the respondent Judge's decision is substantially the same as,
and faithfully reflects, the particular ruling in this Court's decision, i.e., that "[N]ot
even the acquittal of an employee, of the criminal charges against him, is a bar to
the employer's right to impose discipline on its employees, should the act upon
which the criminal charges were based constitute nevertheless an activity
inimical to the employer's interest."
Be that as it may, we must articulate our firm view that in citing this Court's
decisions and rulings, it is the bounden duty of courts, judges and lawyers to
reproduce or copy the same word-for-word and punctuation mark-for-punctuation
mark. Indeed, there is a salient and salutary reason why they should do this.
Only from this Tribunal's decisions and rulings do all other courts, as well as
lawyers and litigants, take their bearings. This is because the decisions referred
to in article 8 of the Civil Code which reads, "Judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal system of
the Philippines," are only those enunciated by this Court of last resort. We said in
no uncertain terms in Miranda, et al. vs. Imperial, et al. (77 Phil. 1066) that
"[O]nly the decisions of this Honorable Court establish jurisprudence or doctrines
in this jurisdiction." Thus, ever present is the danger that if not faithfully and
exactly quoted, the decisions and rulings of this Court may lose their proper and
correct meaning, to the detriment of other courts, lawyers and the public who
may thereby be misled. But if inferior courts and members of the bar meticulously
discharge their duty to check and recheck their citations of authorities culled not
only from this Court's decisions but from other sources and make certain that
they are verbatim reproductions down to the last word and punctuation mark,
appellate courts will be precluded from acting on misinformation, as well as be
saved precious time in finding out whether the citations are correct.
Happily for the respondent Judge and the respondents' counsels, there was no
substantial change in the thrust of this Court's particular ruling which they cited. It
is our view, nonetheless, that for their mistake, they should be, as they are
hereby, admonished to be more careful when citing jurisprudence in the future.
ACCORDINGLY, the decision of the Court of Industrial Relations dated August
17, 1965 is reversed and set aside, and another is entered, ordering the
respondents to reinstate the dismissed members of the petitioning Unions to their
former or comparatively similar positions, with backwages from June 2, 1958 up
to the dates of their actual reinstatements. Costs against the respondents.
G.R. No. L-20303 September 27, 1967
CASTRO, J.:
The vital issue in this case is whether the dismissal of the eight (8) respondent
employees by the petitioner Republic Bank (hereinafter referred to as the Bank)
constituted an unfair labor practice within the meaning and intendment of the
Industrial Peace Act (Republic Act 875). The Court of Industrial Relations (CIR)
found it did and its decision is now on appeal before us. The Bank maintains that
the discharge was for cause.
The Bank had in its employ the respondents Rosendo T. Resuello, Benjamin
Jara, Florencio Allasas, Domingo B. Jola, Diosdado S. Mendiola, Teodoro de la
Cruz, Narciso Macaraeg and Mauro A. Rovillos. On July 12, 1958 it discharged
Jola and, a few days after (July 18, 1958), the rest of respondents, for having
written and published "a patently libelous letter . . . tending to cause the dishonor,
discredit or contempt not only of officers and employees of this bank, but also of
your employer, the bank itself."
The letter referred to was a letter-charge which the respondents had written to
the bank president, demanding his resignation on the grounds of immorality,
nepotism in the appointment and favoritism as well as discrimination in the
promotion of bank employees. The letter, dated July 9, 1958, is hereunder
reproduced in full:
The Bank moved for the dismissal of the complaint, contending that respondents
were discharged not for union activities but for having written and published a
libelous letter against the bank president. The court denied the motion on the
basis of its decision in another case1 in which it ruled that section 4(a) (5) applies
to cases in which an employee is dismissed or discriminated against for having
filed "any charges against his employer." Whereupon the case was heard.
In 1960, however, this Court overruled the decision of the CIR in the Royal
Interocean case and held that "the charge, the filing of which is the cause of the
dismissal of the employee, must be related to his right to self-organization in
order to give rise to unfair labor practice on the part of the employer," because
"under subsection 5 of section 4(a), the employee's (1) having filed charges or
(2) having given testimony or (3) being about to give testimony, are modified by
'under this Act' appearing after the last item."2The Bank therefore renewed its
motion to dismiss, but the court held the motion in abeyance and proceeded with
the hearing.
On July 4, 1962 the court rendered a decision finding the Bank guilty of unfair
labor practice and ordering it to reinstate the respondents, with full back wages
and without loss of seniority and other privileges. This decision was affirmed by
the court en banc on August 9, 1962.
Relying upon Royal Interocean Lines v. CIR,3 and Lakas ng Pagkakaisa sa Peter
Paul v. CIR,4 the Bank argues that the court should have dismissed the complaint
because the discharge of the respondents had nothing to do with their union
activities as the latter in fact admitted at the hearing that the writing of the letter-
charge was not a "union action" but merely their "individual" act.
It will avail the Bank none to gloat over this admission of the respondents.
Assuming that the latter acted in their individual capacities when they wrote the
letter-charge they were nonetheless protected for they were engaged in
concerted activity, in the exercise of their right of self-organization that includes
concerted activity for mutual aid and protection,5 interference with which
constitutes an unfair labor practice under section 4(a)(1). This is the view of
some members of this Court. For, as has been aptly stated, the joining in
protests or demands, even by a small group of employees, if in furtherance of
their interests as such, is a concerted activity protected by the Industrial Peace
Act. It is not necessary that union activity be involved or that collective bargaining
be contemplated.6
In many respects, the case at bar is similar to National Labor Relations Board v.
Phoenix Mutual Life Insurance Co.7 The issue in that case was whether an
insurance company was guilty of an unfair labor practice in interfering with this
right of concerted activity by discharging two agents employed in a branch office.
The cashier of that office had resigned. The ten agents employed there held a
meeting and agreed to join in a letter to the home office objecting to the transfer
to their branch office of a cashier from another branch office to fill the position.
They discussed also the question whether to recommend the promotion of the
assistant cashier of their office as the proper alternative. They then chose one of
their number to compose a draft of the letter and submit it to them for further
discussion, approval and signature. The agent selected to write the letter and
another were discharged for their activities in this respect as being, so their
notices stated, completely unpleasant and far beyond the periphery of their
responsibility. In holding the company liable for unfair labor practice, the Circuit
Court of Appeals said:
A proper construction is that the employees shall have the right to engage
in concerted activities for their mutual aid or protection even though no
union activity be involved, for collective bargaining be contemplated. Here
Davis and Johnson and other salesmen were properly concerned with the
identity and capability of the new cashier. Conceding they had no authority
to appoint a new cashier or even recommend anyone for the appointment,
they had a legitimate interest in acting concertedly in making known their
views to management without being discharged for that interest. The
moderate conduct of Davis and Johnson and the others bore a reasonable
relation to conditions of their employment. It was therefore an unfair labor
practice for respondent to interfere with the exercise of the right of Davis
and Johnson and the other salesmen to engage in concerted activities for
their mutual aid or protection.
Other members of this Court agreed with the CIR that the Bank's conduct
violated section 4(a) (5) which makes it an unfair labor practice for an employer
to dismiss an employee for having filed charges under the Act.
Instead of stifling criticism, the Bank should have allowed the respondents to air
their grievances. Good faith bargaining required of the Bank an open mind and a
sincere desire to negotiate over grievances.11 The grievance committee, created
in the collective bargaining agreements, would have been an appropriate forum
for such negotiation. Indeed, the grievance procedure is a part of the continuous
process of collective bargaining.12 It is intended to promote, as it were, a friendly
dialogue between labor and management as a means of maintaining industrial
peace.
The Bank defends its action by invoking its right to discipline for what it calls the
respondents' libel in giving undue publicity to their letter-charge. To be sure, the
right of self-organization of employees is not unlimited,13 as the right of an
employer to discharge for cause14 is undenied. The Industrial Peace Act does not
touch the normal exercise of the right of an employer to select his employees or
to discharge them. It is directed solely against the abuse of that right by
interfering with the countervailing right of self-organization.15 But the difficulty
arises in determining whether in fact the discharges are made because of such a
separable cause or because of some other activities engaged in by employees
for the purpose of collective bargaining.16
It is for the CIR, in the first instance, to make the determination, "to weigh the
employer's expressed motive in determining the effect on the employees of
management's otherwise equivocal act."17 For the Act does not undertake the
impossible task of specifying in precise and unmistakable language each incident
which constitutes an unfair labor practice. Rather, it leaves to the court the work
of applying the Act's general prohibitory language in the light of infinite
combinations of events which may be charged as violative of its terms. 18 As the
Circuit Court of Appeals puts it:
What we have just essayed underscores at once the difference between Royal
Interocean and Lakas ng Pagkakaisa on the one hand and this case on the
other. In Royal Interocean, the employee's letter to the home office, for writing
which she was dismissed, complained of the local manager's "inconsiderate and
untactful attitude"20 — a grievance which, the court found, "had nothing to do with
or did not arise from her union activities." Nor did the court find evidence of
discriminatory discharge in Lakas ng Pagkakaisa as the letter, which the
employee wrote to the mother company in violation of the local company's rule,
denounced "wastage of company funds." In contrast, the express finding of the
court in this case was that the dismissal of the respondents was made on
account of the letter they had written, in which they demanded the resignation of
the bank president for a number of reasons touching labor-management relations
— reasons which not even the Bank's judgment that the respondents had
committed libel could excuse it for making summary discharges21 in disregard of
its duty to bargain collectively.
In final sum and substance, this Court is in unanimity that the Bank's conduct,
identified as an interference with the employees' right of self-organization, or as a
retaliatory action, and/or as a refusal to bargain collectively, constituted an unfair
labor practice within the meaning and intendment of section 4(a) of the Industrial
Peace Act.
Separate Opinions
The opinion of the Court in this highly significant unfair labor practice case, one
of first impression, easily commends itself for approval. The relevant facts are set
forth in all fullness and with due care. The position of the Court united as it is on
an unfair labor practice having been committed, but not quite fully agreed as to
which particular subsection of the legal provision was violated, is delineated with
precision. With the explicit acknowledgement there made that some members of
the Court are of the belief that what was done by the Republic Bank here
amounted to "interference" and with the writer being of the persuasion that it
could be categorized in line with the statute as "interference, restraint or
coercion," a few words as to why this view is entertained may not be
inappropriate.
No one can doubt that we are in the process of evolving an indigenous labor
jurisprudence. Notwithstanding the clearly American background of the Industrial
Peace Act, based as it is mainly on the Wagner Act,1 labor relations in the
Philippines with their peculiar problems and the ingenuity of Filipino lawyers have
resulted in a growing body of decisions notable for their suitability to local
condition and their distinctly local flavor. This is as it should be.
The present case affords one such instance. The wealth of adjudication by both
judicial and administrative agencies in the United States notwithstanding the
diligent and earnest search for a ruling based on a similar fact-situation yielded
no case precisely in point. What does it signify? At the very least, it may indicate
that while the problem posed could have arisen there, this particular response of
labor was quite unique. On the assumption which I have here hypothetically
made that there was indeed a valid cause for grievance, a more diplomatic
approach could have been attempted. Or at the very least the procedure
indicated for the adjustment of a grievance could have been followed. That was
not done. What respondents did was to issue an ultimatum.
Collective bargaining whether in its formative stage preparatory to a labor
contract or in the adjustment of a labor problem in accordance with the procedure
set forth in an existing agreement presupposes the give-and-take of discussion.
No party adopts, at least in its initial stages, a hard-line position, from which there
can be no retreat. That was not the situation here. Respondents as labor leaders
appeared adamantine in their attitude to terminate the services of the then
president of the Republic Savings Bank. Nor did they mince words in describing
his alleged misdeeds. They were quite certain that he had offended most
grievously. They wanted him out. There was no room for discussion.
Nonetheless, concurrence with the decision arrived at by the Court is called for in
view of their mass dismissal. Under the circumstances, the supervisors union,
the Republic Savings Bank employees union, the Republic Savings Bank
security guards union, and the Republic Savings Bank supervisors union were
left leaderless. For collective bargaining to be meaningful, there must be two
parties, one representing management and the other representing the union. Nor
could management select who would represent the latter or with whom to deal,
otherwise in effect there would be only one party. Obviously there would then be
no bargaining. 1aw phîl.nèt
DECISION
MENDOZA, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks
to review, reverse and set aside the October 20, 2005 Decision1 and the
February 21, 2006 Resolution2 of the Court of Appeals {CA), in CA-G.R. SP No.
68303, which affirmed the May 31, 2001 Resolution3 and the September 24,
2001 Order4 of the National Labor Relations Commission (NLRC) in Certified
Cases No. 000-185-00 and 000-191-00.
The Facts
On July 3, 2000, the initial conference was held where the Union clarified the
issues cited in the NOS. On July 5, 2000, the Union held its strike vote balloting
where the members voted in favor of a strike. On July 10, 2000, Bankard asked
the Office of the Secretary of Labor to assume jurisdiction over the labor dispute
or to certify the same to the NLRC for compulsory arbitration. On July 12, 2000,
Secretary Bienvenido Laguesma (Labor Secretary) of the Department of Labor
and Employment (DOLE) issued the order certifying the labor dispute to the
NLRC.6
On July 25, 2000, the Union declared a CBA bargaining deadlock. The following
day, the Union filed its second NOS, docketed as NS-07-265-00,7 alleging
bargaining in bad faith on the part of Bankard. Bankard then again asked the
Office of the Secretary of Labor to assume jurisdiction, which was granted. Thus,
the Order, dated August 9, 2000, certifying the labor dispute to the NLRC, was
issued.8
The Union, despite the two certification orders issued by the Labor Secretary
enjoining them from conducting a strike or lockout and from committing any act
that would exacerbate the situation, went on strike on August 11, 2000.9
During the conciliatory conferences, the parties failed to amicably settle their
dispute. Consequently, they were asked to submit their respective position
papers. Both agreed to the following issues:
2. Whether there was bad faith on the part of the management when it
bargained with the Union.10
As regards the first issue, it was Bankard’s position that job contractualization or
outsourcing or contracting-out of jobs was a legitimate exercise of management
prerogative and did not constitute unfair labor practice. It had to implement new
policies and programs, one of which was the Manpower Rationalization Program
(MRP) in December 1999, to further enhance its efficiency and be more
competitive in the credit card industry. The MRP was an invitation to the
employees to tender their voluntary resignation, with entitlement to separation
pay equivalent to at least two (2) months salary for every year of service. Those
eligible under the company’s retirement plan would still receive additional pay.
Thereafter, majority of the Phone Center and the Service Fulfilment Division
availed of the MRP. Thus, Bankard contracted an independent agency to handle
its call center needs.11
As to the second issue, Bankard denied that there was bad faith on its part in
bargaining with the Union. It came up with counter-offers to the Union’s
proposals, but the latter’s demands were far beyond what management could
give. Nonetheless, Bankard continued to negotiate in good faith until the
Memorandum of Agreement (MOA) re-negotiating the provisions of the 1997-
2002, Collective Bargaining Agreement (CBA) was entered into between
Bankard and the Union. The CBA was overwhelmingly ratified by the Union
members. For said reason, Bankard contended that the issue of bad faith in
bargaining had become moot and academic.12
On the other hand, the Union alleged that contractualization started in Bankard in
1995 in the Records Communications Management Division, particularly in the
mailing unit, which was composed of two (2) employees and fourteen (14)
messengers. They were hired as contractual workers to perform the functions of
the regular employees who had earlier resigned and availed of the
MRP.13 According to the Union, there were other departments in Bankard utilizing
messengers to perform work load considered for regular employees, like the
Marketing Department, Voice Authorizational Department, Computer Services
Department, and Records Retention Department. The Union contended that the
number of regular employees had been reduced substantially through the
management scheme of freeze-hiring policy on positions vacated by regular
employees on the basis of cost-cutting measures and the introduction of a more
drastic formula of streamlining its regular employees through the MRP.14
With regard to the second issue, the Union averred that Bankard’s proposals
were way below their demands, showing that the management had no intention
of reaching an agreement. It was a scheme calculated to force the Union to
declare a bargaining deadlock.15
On May 31, 2001, the NLRC issued its Resolution16 declaring that the
management committed acts considered as unfair labor practice (ULP) under
Article 248(c) of the Labor Code. It ruled that:
The NLRC, however, agreed with Bankard that the issue of bargaining in bad
faith was rendered moot and academic by virtue of the finalization and signing of
the CBA between the management and the Union.18
The Union, on the other hand, assailed the NLRC ruling on the issue of bad faith
bargaining.
On September 24, 2001, the NLRC issued the Order19 denying both parties'
motions for lack of merit.
On December 28, 2001, Bankard filed a petition for certiorari under Rule 65 with
the CA arguing that the NLRC gravely abused its discretion amounting to lack or
excess of jurisdiction when:
1. It issued the Resolution, dated May 31, 2001, particularly in finding that
Bankard committed acts of unfair labor practice; and,
2. It issued the Order dated September 24, 2001 denying Bankard's partial
motion for reconsideration.20
The Union filed two (2) comments, dated January 22, 2002, through its NCR
Director, Cornelio Santiago, and another, dated February 6, 2002, through its
President, Paulo Buenconsejo, both praying for the dismissal of the petition and
insisting that Bankard's resort to contractualization or outsourcing of contracts
constituted ULP. It further alleged that Bankard committed ULP when it
conducted CBA negotiations in bad faith with the Union.
The CA dismissed the petition, finding that the NLRC ruling was supported by
substantial evidence.
The CA agreed with Bankard that job contracting, outsourcing and/or contracting
out of jobs did not per se constitute ULP, especially when made in good faith and
for valid purposes. Despite Bankard's claim of good faith in resorting to job
contractualization for purposes of cost-efficient operations and its non-
interference with the employees' right to self-organization, the CA agreed with the
NLRC that Bankard's acts impaired the employees right to self-organization and
should be struck down as illegal and invalid pursuant to Article 248(c)21 of the
Labor Code. The CA thus, ruled in this wise:
We cannot agree more with public respondent. Incontrovertible is the fact that
petitioner's acts, particularly its promotion of the program enticing employees to
tender their voluntary resignation in exchange for financial packages, resulted to
a union dramatically reduced in numbers. Coupled with the management's policy
of "freeze-hiring" of regular employees and contracting out jobs to contractual
workers, petitioner was able to limit and prevent the growth of the Union, an act
that clearly constituted unfair labor practice.22
In its assailed decision, the CA affirmed the May 31, 2001 Resolution and the
September 24, 2001 Order of the NLRC.
Aggrieved, Bankard filed a motion for reconsideration. The CA subsequently
denied it for being a mere repetition of the grounds previously raised. Hence, the
present petition bringing up this lone issue:
Well-settled is the rule that "factual findings of labor officials, who are deemed to
have acquired expertise in matters within their jurisdiction, are generally
accorded not only respect but even finality by the courts when supported by
substantial evidence."24 Furthermore, the factual findings of the NLRC, when
affirmed by the CA, are generally conclusive on this Court.25 When the petitioner,
however, persuasively alleges that there is insufficient or insubstantial evidence
on record to support the factual findings of the tribunal or court a quo, then the
Court, exceptionally, may review factual issues raised in a petition under Rule 45
in the exercise of its discretionary appellate jurisdiction.26
Article 247. Concept of unfair labor practice and procedure for prosecution
thereof. -- Unfair labor practices violate the constitutional right of workers and
employees to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-
management relations. x x x
The Court has ruled that the prohibited acts considered as ULP relate to the
workers’ right to self-organization and to the observance of a CBA. It refers to
"acts that violate the workers’ right to organize."27 Without that element, the acts,
even if unfair, are not ULP.28 Thus, an employer may only be held liable for unfair
labor practice if it can be shown that his acts affect in whatever manner the right
of his employees to self-organize.29
In this case, the Union claims that Bankard, in implementing its MRP which
eventually reduced the number of employees, clearly violated Article 248(c) of
the Labor Code which states that:
xxxx
xxxx
Because of said reduction, Bankard subsequently contracted out the jobs held by
former employees to other contractual employees. The Union specifically alleges
that there were other departments in Bankard, Inc. which utilized messengers to
perform work load considered for regular employees like the Marketing
Department, Voice Authorizational Department, Computer Services Department,
and Records Retention Department.30 As a result, the number of union members
was reduced, and the number of contractual employees, who were never eligible
for union membership for lack of qualification, increased.
The general principle is that the one who makes an allegation has the burden of
proving it. While there are exceptions to this general rule, in ULP cases, the
1avv phi1
alleging party has the burden of proving the ULP;31 and in order to show that the
employer committed ULP under the Labor Code, substantial evidence is required
to support the claim.32 Such principle finds justification in the fact that ULP is
punishable with both civil and/or criminal sanctions.33
Aside from the bare allegations of the Union, nothing in the records strongly
proves that Bankard intended its program, the MRP, as a tool to drastically and
deliberately reduce union membership. Contrary to the findings and conclusions
of both the NLRC and the CA, there was no proof that the program was meant to
encourage the employees to disassociate themselves from the Union or to
restrain them from joining any union or organization. There was no showing that
it was intentionally implemented to stunt the growth of the Union or that Bankard
discriminated, or in any way singled out the union members who had availed of
the retirement package under the MRP. True, the program might have affected
the number of union membership because of the employees’ voluntary
resignation and availment of the package, but it does not necessarily follow that
Bankard indeed purposely sought such result. It must be recalled that the MRP
was implemented as a valid cost-cutting measure, well within the ambit of the so-
called management prerogatives. Bankard contracted an independent agency to
meet business exigencies. In the absence of any showing that Bankard was
motivated by ill will, bad faith or malice, or that it was aimed at interfering with its
employees’ right to self-organize, it cannot be said to have committed an act of
unfair labor practice.34
The employer’s right to conduct the affairs of its business, according to its own
discretion and judgment, is well-recognized.37 Management has a wide latitude to
conduct its own affairs in accordance with the necessities of its business.38 As the
Court once said:
This is so because the law on unfair labor practices is not intended to deprive
employers of their fundamental right to prescribe and enforce such rules as they
honestly believe to be necessary to the proper, productive and profitable
operation of their business.39
DECISION
On June 21, 1999, the Club and the Union entered into a Collective Bargaining
Agreement (CBA), which provided for a Union shop and maintenance of
membership shop.
The pertinent parts of the CBA included in Article II on Union Security read, as
follows:
ARTICLE II
UNION SECURITY
a) New regular rank-and-file employees of the Club shall join the UNION
within five (5) days from the date of their appointment as regular
employees as a condition for their continued employment during the
lifetime of this Agreement, otherwise, their failure to do so shall be a
ground for dismissal from the CLUB upon demand by the UNION.
b) The Club agrees to furnish the UNION the names of all new
probationary and regular employees covered by this Agreement not later
than three (3) days from the date of regular appointment showing the
positions and dates of hiring.
xxxx
(a) Failure to join the UNION within five (5) days from the time of
regularization;
(b) Resignation from the UNION, except within the period allowed by
law;
(e) Joining another UNION except within the period allowed by law;
It is understood that the UNION shall hold the CLUB free and harmless
[sic] from any liability or damage whatsoever which may be imposed upon
it by any competent judicial or quasi-judicial authority as a result of such
dismissal and the UNION shall reimburse the CLUB for any and all liability
or damage it may be adjudged.1 (Emphasis supplied.)
Subsequently, in July 2001, an election was held and a new set of officers was
elected. Soon thereafter, the new officers conducted an audit of the Union funds.
They discovered some irregularly recorded entries, unaccounted expenses and
disbursements, and uncollected loans from the Union funds. The Union notified
respondents Pizarro, Braza, and Castueras of the audit results and asked them
to explain the discrepancies in writing.2
Thereafter, on October 6, 2001, in a meeting called by the Union, respondents
Pizarro, Braza, and Castueras explained their side. Braza denied any
wrongdoing and instead asked that the investigation be addressed to Castueras,
who was the Union Treasurer at that time. With regard to his unpaid loans, Braza
claimed he had been paying through monthly salary deductions and said the
Union could continue to deduct from his salary until full payment of his loans,
provided he would be reimbursed should the result of the initial audit be proven
wrong by a licensed auditor. With regard to the Union expenses which were
without receipts, Braza explained that these were legitimate expenses for which
receipts were not issued, e.g. transportation fares, food purchases from small
eateries, and food and transportation allowances given to Union members with
pending complaints with the Department of Labor and Employment, the National
Labor Relations Commission (NLRC), and the fiscal's office. He explained that
though there were no receipts for these expenses, these were supported by
vouchers and itemized as expenses. Regarding his unpaid and unliquidated cash
advances amounting to almost PhP 20,000, Braza explained that these were not
actual cash advances but payments to a certain Ricardo Ricafrente who had
loaned PhP 200,000 to the Union.3
Pizarro, for his part, blamed Castueras for his unpaid and uncollected loan and
cash advances. He claimed his salaries were regularly deducted to pay his loan
and he did not know why these remained unpaid in the records. Nonetheless, he
likewise agreed to continuous salary deductions until all his accountabilities were
paid.4
Castueras also denied any wrongdoing and claimed that the irregular entries in
the records were unintentional and were due to inadvertence because of his
voluminous work load. He offered that his unpaid personal loan of PhP 27,500
also be deducted from his salary until the loans were fully paid. Without admitting
any fault on his part, Castueras suggested that his salary be deducted until the
unaccounted difference between the loans and the amount collected amounting
to a total of PhP 22,000 is paid.5
In a letter dated October 18, 2001, the Union, invoking the Security Clause of the
CBA, demanded that the Club dismiss respondents Pizarro, Braza, and
Castueras in view of their expulsion from the Union.8 The Club required the three
respondents to show cause in writing within 48 hours from notice why they
should not be dismissed. Pizarro and Castueras submitted their respective
written explanations on October 20, 2001, while Braza submitted his explanation
the following day.
During the last week of October 2001, the Club's general manager called
respondents Pizarro, Braza, and Castueras for an informal conference inquiring
about the charges against them. Said respondents gave their explanation and
asserted that the Union funds allegedly malversed by them were even over the
total amount collected during their tenure as Union officers-PhP 120,000 for
Braza, PhP 57,000 for Castueras, and PhP 10,840 for Pizarro, as against the
total collection from April 1996 to December 2001 of only PhP 102,000. They
claimed the charges are baseless. The general manager announced he would
conduct a formal investigation.
Nonetheless, after weighing the verbal and written explanations of the three
respondents, the Club concluded that said respondents failed to refute the
validity of their expulsion from the Union. Thus, it was constrained to terminate
the employment of said respondents. On December 26, 2001, said respondents
received their notices of termination from the Club.9
Respondents Pizarro, Braza, and Castueras challenged their dismissal from the
Club in an illegal dismissal complaint docketed as NLRC-NCR Case No. 30-01-
00130-02 filed with the NLRC, National Capital Region Arbitration Branch. In his
January 27, 2003 Decision,10 the Labor Arbiter ruled in favor of the Club, and
found that there was justifiable cause in terminating said respondents. He
dismissed the complaint for lack of merit.
On February 26, 2004, the NLRC rendered a Decision11 granting the appeal,
the fallo of which reads:
SO ORDERED.
The NLRC ruled that there was no justifiable cause for the termination of
respondents Pizarro, Braza, and Castueras. The commissioners relied heavily on
Section 2, Rule XVIII of the Rules Implementing Book V of the Labor Code. Sec.
2 provides:
SEC. 2. Actions arising from Article 241 of the Code. - Any action arising
from the administration or accounting of union funds shall be filed and
disposed of as an intra-union dispute in accordance with Rule XIV of this
Book.
According to the NLRC, said respondents' expulsion from the Union was illegal
since the DOLE had not yet made any definitive ruling on their liability regarding
the administration of the Union's funds.
The Club then filed a motion for reconsideration which the NLRC denied in its
June 20, 2004 Resolution.13
Aggrieved by the Decision and Resolution of the NLRC, the Club filed a Petition
for Certiorari which was docketed as CA-G.R. SP No. 86171 with the Court of
Appeals (CA).
On July 5, 2005, the appellate court rendered a Decision,14 denying the petition
and upholding the Decision of the NLRC. The CA's Decision focused mainly on
the Club's perceived failure to afford due process to the three respondents. It
found that said respondents were not given the opportunity to be heard in a
separate hearing as required by Sec. 2(b), Rule XXIII, Book V of the Omnibus
Rules Implementing the Labor Code, as follows:
The CA also said the dismissal of the three respondents was contrary to the
doctrine laid down in Malayang Samahan ng mga Manggagawa sa M. Greenfield
v. Ramos (Malayang Samahan), where this Court ruled that even on the
assumption that the union had valid grounds to expel the local union officers, due
process requires that the union officers be accorded a separate hearing by the
employer company.15
In a Resolution16 dated October 20, 2005, the CA denied the Club's motion for
reconsideration.
The Club now comes before this Court with these issues for our resolution,
summarized as follows:
2. Whether or not the CA erred in not finding that the NLRC committed
grave abuse of discretion amounting to lack or excess of jurisdiction when
it ruled that respondents Pizarro, Braza, and Castueras were illegally
expelled from the Union.
3. Whether the case of Agabon vs. NLRC17 should be applied to this case.
4. Whether that in the absence of bad faith and malice on the part of the
Club, the Union is solely liable for the termination from employment of said
respondents.
The main issue is whether the three respondents were illegally dismissed and
whether they were afforded due process.
The Club avers that the dismissal of the three respondents was in accordance
with the Union security provisions in their CBA. The Club also claims that the
three respondents were afforded due process, since the Club conducted an
investigation separate and independent from that conducted by the Union.
Respondents Pizarro, Braza, and Castueras, on the other hand, contend that the
Club failed to conduct a separate hearing as prescribed by Sec. 2(b), Rule XXIII,
Book V of the implementing rules of the Code.
First, we resolve the legality of the three respondents' dismissal from the Club.
Under the Labor Code, an employee may be validly terminated on the following
grounds: (1) just causes under Art. 282; (2) authorized causes under Art. 283; (3)
termination due to disease under Art. 284; and (4) termination by the employee
or resignation under Art. 285.
The language of Art. II of the CBA that the Union members must maintain their
membership in good standing as a condition sine qua non for their continued
employment with the Club is unequivocal. It is also clear that upon demand by
the Union and after due process, the Club shall terminate the employment of a
regular rank-and-file employee who may be found liable for a number of
offenses, one of which is malversation of Union funds.20
Below is the letter sent to respondents Pizarro, Braza, and Castueras, informing
them of their termination:
On October 18, 2001, the Club received a letter from the Board of
Directors of the Alabang Country Club Independent Employees' Union
("Union") demanding your dismissal from service by reason of your alleged
commission of act of dishonesty, specifically malversation of union funds.
In support thereof, the Club was furnished copies of the following
documents:
Be guided accordingly.21
Gleaned from the above, the three respondents were expelled from and by the
Union after due investigation for acts of dishonesty and malversation of Union
funds. In accordance with the CBA, the Union properly requested the Club,
through the October 18, 2001 letter22 signed by Mario Orense, the Union
President, and addressed to Cynthia Figueroa, the Club's HRD Manager, to
enforce the Union security provision in their CBA and terminate said
respondents. Then, in compliance with the Union's request, the Club reviewed
the documents submitted by the Union, requested said respondents to submit
written explanations, and thereafter afforded them reasonable opportunity to
present their side. After it had determined that there was sufficient evidence that
said respondents malversed Union funds, the Club dismissed them from their
employment conformably with Sec. 4(f) of the CBA.
Were respondents Pizarro, Braza, and Castueras accorded due process before
their employments were terminated?
We rule that the Club substantially complied with the due process requirements
before it dismissed the three respondents.
The three respondents aver that the Club violated their rights to due process as
enunciated in Malayang Samahan,23 when it failed to conduct an independent
and separate hearing before they were dismissed from service.
The CA, in dismissing the Club's petition and affirming the Decision of the NLRC,
also relied on the same case. We explained in Malayang Samahan:
x x x Although this Court has ruled that union security clauses embodied in
the collective bargaining agreement may be validly enforced and that
dismissals pursuant thereto may likewise be valid, this does not erode the
fundamental requirements of due process. The reason behind the
enforcement of union security clauses which is the sanctity and inviolability
of contracts cannot override one's right to due process.24
In the above case, we pronounced that while the company, under a maintenance
of membership provision of the CBA, is bound to dismiss any employee expelled
by the union for disloyalty upon its written request, this undertaking should not be
done hastily and summarily. The company acts in bad faith in dismissing a
worker without giving him the benefit of a hearing.25 We cautioned in the same
case that the power to dismiss is a normal prerogative of the employer; however,
this power has a limitation. The employer is bound to exercise caution in
terminating the services of the employees especially so when it is made upon the
request of a labor union pursuant to the CBA. Dismissals must not be arbitrary
and capricious. Due process must be observed in dismissing employees
because the dismissal affects not only their positions but also their means of
livelihood. Employers should respect and protect the rights of their employees,
which include the right to labor.26
The CA and the three respondents err in relying on Malayang Samahan, as its
ruling has no application to this case. In Malayang Samahan, the union members
were expelled from the union and were immediately dismissed from the company
without any semblance of due process. Both the union and the company did not
conduct administrative hearings to give the employees a chance to explain
themselves. In the present case, the Club has substantially complied with due
process. The three respondents were notified that their dismissal was being
requested by the Union, and their explanations were heard. Then, the Club,
through its President, conferred with said respondents during the last week of
October 2001. The three respondents were dismissed only after the Club
reviewed and considered the documents submitted by the Union vis-à-vis the
written explanations submitted by said respondents. Under these circumstances,
we find that the Club had afforded the three respondents a reasonable
opportunity to be heard and defend themselves.
On the applicability of Agabon, the Club points out that the CA ruled that the
three respondents were illegally dismissed primarily because they were not
afforded due process. We are not unaware of the doctrine enunciated
in Agabon that when there is just cause for the dismissal of an employee, the
lack of statutory due process should not nullify the dismissal, or render it illegal or
ineffectual, and the employer should indemnify the employee for the violation of
his statutory rights.27 However, we find that we could not apply Agabon to this
case as we have found that the three respondents were validly dismissed and
were actually afforded due process.
Finally, the issue that since there was no bad faith on the part of the Club, the
Union is solely liable for the termination from employment of the three
respondents, has been mooted by our finding that their dismissal is valid.
WHEREFORE, premises considered, the Decision dated July 5, 2005 of the CA
and the Decision dated February 26, 2004 of the NLRC are
hereby REVERSED and SET ASIDE. The Decision dated January 27, 2003 of
the Labor Arbiter in NLRC-NCR Case No. 30-01-00130-02 is
hereby REINSTATED.
G.R. No. 158620 October 11, 2006
DECISION
TINGA, J.:
The main issue for resolution herein is whether there was sufficient cause for the
dismissal of a rank-and-file employee effectuated through the enforcement of a
closed-shop provision in the Collective Bargaining Agreement (CBA) between the
employer and the union.
Timbal filed an Answer before the Disloyalty Board, denying the allegations in the
complaint and the averments in Artajo's Affidavit. She further alleged that her
husband, Modesto Timbal, had filed a complaint against Artajo for collection of a
sum of money on 17 March 1993, or just six (6) days before Artajo executed her
affidavit. She noted that the allegations against her were purportedly committed
nearly two (2) years earlier, and that Artajo's act was motivated by hate and
revenge owing to the filing of the aforementioned civil action.4
Nevertheless, the ALU Disloyalty Board concluded that Timbal was guilty of acts
or conduct inimical to the interests of ALU, through a Resolution dated 7 May
1993.5 It found that the acts imputed to Timbal were partisan activities, prohibited
since the "freedom period" had not yet commenced as of that time. Thus, the
Disloyalty Board recommended the expulsion of Timbal from membership in
ALU, and likewise her dismissal from Del Monte in accordance with the Union
Security Clause in the existing CBA between ALU and Del Monte. The Disloyalty
Board also reached the same conclusions as to the co-employees, expressed in
separate resolutions also recommending their expulsion from ALU.6
Timbal and her co-employees filed separate complaints against Del Monte and/or
its Personnel Manager Warfredo C. Balandra and ALU with the Regional
Arbitration Branch (RAB) of the National Labor Relations Commission (NLRC) for
illegal dismissal, unfair labor practice and damages.11 The complaints were
consolidated and heard before Labor Arbiter Irving Pedilla. The Labor Arbiter
affirmed that all five (5) were illegally dismissed and ordered Del Monte to
reinstate complainants, including Timbal, to their former positions and to pay their
full backwages and other allowances, though the other claims and charges were
dismissed for want of basis.12
Only Del Monte interposed an appeal with the NLRC.13 The NLRC reversed the
Labor Arbiter and ruled that all the complainants were validly dismissed.14 On
review, the Court of Appeals ruled that only Timbal was illegally dismissed.15 At
the same time, the appellate court found that Del Monte had failed to observe
procedural due process in dismissing the co-employees, and thus ordered the
company to pay P30,000.00 to each of the co-employees as penalties. The co-
employees sought to file a Petition for Review16 with this Court assailing the
ruling of the Court of Appeals affirming their dismissal, but the petition was
denied because it was not timely filed.17
On the other hand, Del Monte, through the instant petition, assails the Court of
Appeals decision insofar as it ruled that Timbal was illegally dismissed. Notably,
Del Monte does not assail in this petition the award of P30,000.00 to each of the
co-employees, and the ruling of the Court of Appeals in that regard should now
be considered final.
The Labor Arbiter, in his favorable ruling to the dismissed employees, had noted
that "complainant Timbal['s] x x x accuser has an axe to grind against her for an
unpaid debt so that her testimony cannot be given credit."19 The NLRC, in
reversing the Labor Arbiter, did not see it fit to mention the circumstances of the
apparent feud between Timbal and Artajo, except in the course of narrating
Timbal's allegations.
However, in the present petition, Del Monte utilizes a new line of argument in
justifying Timbal's dismissal. While it does not refute the contemporaneous ill-will
between Timbal and Artajo, it nonetheless alleges that there was a second
witness, Paz Piquero, who testified against Timbal before the Disloyalty
Board.20 Piquero had allegedly corroborated Artajo's allegations and positively
identified Timbal as among those present during the seminar of the NFL
conducted on 14 July 1992 and as having given her transportation money after
the seminar was finished. Del Monte asserts that Piquero was a disinterested
witness against Timbal.21
Del Monte also submits two (2) other grounds for review. It argues that the
decision of the Labor Arbiter, which awarded Timbal full backwages and other
allowances, was inconsistent with jurisprudence which held that an employer
who acted in good faith in dismissing employees on the basis of a closed-shop
provision is not liable to pay full backwages.22 Finally, Del Monte asserts that it
had, from the incipience of these proceedings consistently prayed that in the
event that it were found with finality that the dismissal of Timbal and the others is
illegal, ALU should be made liable to Del Monte pursuant to the CBA. The Court
of Appeals is faulted for failing to rule upon such claim.
For her part, Timbal observes that Piquero's name was mentioned for the first
time in Del Monte's Motion for Partial Reconsideration of the decision of the
Court of Appeals.23 She claims that both Piquero and Artajo were not in good
terms with her after she had won a civil suit for the collection of a sum of money
against their immediate superior, one Virgie Condeza.24
The legality of Timbal's dismissal is obviously the key issue in this case. We are
particularly called upon to determine whether at this late stage, the Court may
still give credence to the purported testimony of Piquero and justify Timbal's
dismissal based on such testimony.
It bears elaboration that Timbal's dismissal is not predicated on any of the just or
authorized causes for dismissal under Book Six, Title I of the Labor Code,25 but
on the union security clause in the CBA between Del Monte and ALU.
Stipulations in the CBA authorizing the dismissal of employees are of equal
import as the statutory provisions on dismissal under the Labor Code, since "[a]
CBA is the law between the company and the union and compliance therewith is
mandated by the express policy to give protection to labor."26 The CBA, which
covers all regular hourly paid employees at the pineapple plantation in
Bukidnon,27 stipulates that all present and subsequent employees shall be
required to become a member of ALU as a condition of continued employment.
Sections 4 and 5, Article II of the CBA further state:
ARTICLE II
Section 5. Upon request of [ALU], [Del Monte] shall dismiss from its
service in accordance with law, any member of the bargaining unit who
loses his membership in [ALU] pursuant to the provisions of the preceding
section. [ALU] assumes full responsibility for any such termination and
hereby agrees to hold [Del Monte] free from any liability by judgment of a
competent authority for claims arising out of dismissals made upon
demand of [ALU], and [the] latter shall reimburse the former of such sums
as it shall have paid therefor. Such reimbursement shall be deducted from
union dues and agency fees until duly paid.28
Timbal's expulsion from ALU was premised on the ground of disloyalty to the
union, which under Section 4(3), Article II of the CBA, also stands as a ground for
her dismissal from Del Monte. Indeed, Section 5, Article II of the CBA enjoins Del
Monte to dismiss from employment those employees expelled from ALU for
disloyalty, albeit with the qualification "in accordance with law."
Article 279 of the Labor Code ordains that "in cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause
or when authorized by [Title I, Book Six of the Labor Code]." Admittedly, the
enforcement of a closed-shop or union security provision in the CBA as a ground
for termination finds no extension within any of the provisions under Title I, Book
Six of the Labor Code. Yet jurisprudence has consistently recognized, thus: "It is
State policy to promote unionism to enable workers to negotiate with
management on an even playing field and with more persuasiveness than if they
were to individually and separately bargain with the employer. For this reason,
the law has allowed stipulations for 'union shop' and 'closed shop' as means of
encouraging workers to join and support the union of their choice in the
protection of their rights and interests vis-a-vis the employer."31
It might be suggested that since Timbal was expelled from ALU on the ground of
disloyalty, Del Monte had no choice but to implement the CBA provisions and
cause her dismissal. Similarly, it might be posited that any tribunal reviewing
such dismissal is precluded from looking beyond the provisions of the CBA in
ascertaining whether such dismissal was valid. Yet deciding the problem from
such a closed perspective would virtually guarantee unmitigated discretion on the
part of the union in terminating the employment status of an individual employee.
What the Constitution does recognize is that all workers, whether union members
or not, are "entitled to security of tenure."32The guarantee of security of tenure
itself is implemented through legislation, which lays down the proper standards in
determining whether such right was violated.33
Agabon v. NLRC34 did qualify that constitutional due process or security of tenure
did not shield from dismissal an employee found guilty of a just cause for
termination even if the employer failed to render the statutory notice and hearing
requirement. At the same time, it should be understood that in the matter of
determining whether cause exists for termination, whether under Book Six, Title I
of the Labor Code or under a valid CBA, substantive due process must be
observed as a means of ensuring that security of tenure is not infringed.
Agabon observed that due process under the Labor Code comprised of two
aspects: "substantive, i.e., the valid and authorized causes of employment
termination under the Labor Code; and procedural, i.e., the manner of
dismissal."35 No serious dispute arose in Agabon over the observance of
substantive due process in that case, or with the conclusion that the petitioners
therein were guilty of abandonment of work, one of the just causes for dismissal
under the Labor Code. The controversy in Agabon centered on whether the
failure to observe procedural due process, through the non-observance of the
two-notice rule, should lead to the invalidation of the dismissals. The Court ruled,
over the dissents of some Justices, that the failure by the employer to observe
procedural due process did not invalidate the dismissals for just cause of the
petitioners therein. However, Agabon did not do away with the requirement of
substantive due process, which is essentially the existence of just cause
provided by law for a valid dismissal. Thus, Agabon cannot be invoked to validate
a dismissal wherein substantive due process, or the proper determination of just
cause, was not observed.
It is necessary to emphasize these principles since the immutable truth under our
constitutional and labor laws is that no employee can be dismissed without
cause. Agabon may have tempered the procedural due process requirements if
just cause for dismissal existed, but in no way did it eliminate the existence of a
legally prescribed cause as a requisite for any dismissal. The fact that a CBA
may provide for additional grounds for dismissal other than those established
under the Labor Code does not detract from the necessity to duly establish the
existence of such grounds before the dismissal may be validated. And even if the
employer or, in this case, the collective bargaining agent, is satisfied that cause
has been established to warrant the dismissal, such satisfaction will be of no
consequence if, upon legal challenge, they are unable to establish before the
NLRC or the courts the presence of such causes.
In the matter at bar, the Labor Arbiter—the proximate trier of facts—and the
Court of Appeals both duly appreciated that the testimony of Artajo against
Timbal could not be given credence, especially in proving Timbal's disloyalty to
ALU. This is due to the prior animosity between the two engendered by the
pending civil complaint filed by Timbal's husband against Artajo. Considering that
the civil complaint was filed just six (6) days prior to the execution of Artajo's
affidavit against Timbal, it would be plainly injudicious to presume that Artajo
possessed an unbiased state of mind as she executed that affidavit. Such
circumstance was considered by the Labor Arbiter, and especially the Court of
Appeals, as they rendered a favorable ruling to Timbal. The NLRC may have
decided against Artajo, but in doing so, it failed to provide any basis as to why
Artajo's testimony should be believed, instead of disbelieved. No credible
disputation was offered by the NLRC to the claim that Artajo was biased against
Timbal; hence, we should adjudge the findings of the Labor Arbiter and the Court
of Appeals as more cogent on that point.
Before this Court, Del Monte does not even present any serious argument that
Artajo's testimony against Timbal was free from prejudice. Instead, it posits that
Piquero's alleged testimony against Timbal before the Disloyalty Board should be
given credence, and that taken with Artajo's testimony, should sufficiently
establish the ground of disloyalty for which Timbal should be dismissed.
The Court sees the danger to jurisprudence and the rights of workers in acceding
to Del Monte's position. The dismissal for cause of employees must be justified
by substantial evidence, as appreciated by an impartial trier of facts. None of the
trier of facts below—the Labor Arbiter, the NLRC and the Court of Appeals—saw
fit to accord credence to Piquero's testimony, even assuming that such testimony
was properly contained in the record. Even the NLRC decision, which was
adverse to Timbal, made no reference at all to Piquero's alleged testimony.
Del Monte is able to point to only one instance wherein Piquero's name and
testimony appears on the record. It appears that among the several attachments
to the position paper submitted by the ALU before the NLRC-RAB was a copy of
the raw stenographic notes transcribed, apparently on 17 April 1993, during a
hearing before the Disloyalty Board. The transcription is not wholly legible, but
there appears to be references therein to the name "Paz Piquero," and her
apparent testimony before the Disloyalty Board. We are unable to reproduce with
accuracy, based on the handwritten stenographic notes, the contents of this
seeming testimony of Piquero, although Del Monte claims before this Court that
Piquero had corroborated Artajo's claims during such testimony, "positively
identified [Timbal's] presence in the NFL seminar on 14 July 1992," and
"confirmed that Timbal gave Artajo P500.00 for recruiting participants in the NFL
seminar."37
There are evident problems on our part, at this late stage, in appreciating these
raw stenographic notes adverting to the purported testimony of Piquero,
especially as a means of definitively concluding that Timbal was guilty of
disloyalty. Certainly, these notes cannot be appreciated as entries in the official
record, which are presumed prima facie evidence of the facts therein stated,38 as
such records can only be made by a public officer of the Philippines or by a
person in the performance of a duty specially enjoined by law. These transcripts
were not taken during a hearing conducted by any public office in the Philippines,
but they were committed in the course of an internal disciplinary mechanism
devised by a privately organized labor union. Unless the authenticity of these
notes is duly proven before, and appreciated by the triers of fact, we cannot
accord them any presumptive or conclusive value.
Moreover, despite the fact that the apparent record of Piquero's testimony was
appended to ALU's position paper, the position paper itself does not make any
reference to such testimony, or even to Piquero's name for that matter. The
position paper observes that "[t]his testimony of [Artajo] was directly corroborated
by her actual attendance on July 14, 1992 at the agreed [venue]," but no mention
is made that such testimony was also "directly corroborated" by Piquero. Then
again, it was only Artajo, and not Piquero, who executed an affidavit recounting
the allegations against Timbal.
In order for the Court to be able to appreciate Piquero's testimony as basis for
finding Timbal guilty of disloyalty, it is necessary that the fact of such testimony
must have been duly established before the NLRC-RAB, the NLRC, or at the
very least, even before the Court of Appeals. It is only after the fact of such
testimony has been established that the triers of fact can come to any conclusion
as to the veracity of the allegations in the testimony.
It should be mentioned that the Disloyalty Board, in its Resolution finding Timbal
guilty of disloyalty, did mention that Artajo's testimony "was corroborated by Paz
Piquero who positively identified and testified that Nena Timbal was engaged in
recruitment of ALU members at [Del Monte] to attend NFL seminars."39
The Disloyalty Board may have appreciated Piquero's testimony in its own finding
that Timbal was guilty, yet the said board cannot be considered as a wholly
neutral or dispassionate tribunal since it was constituted by the very organization
that stood as the offended party in the disloyalty charge. Without impugning the
integrity of ALU and the mechanisms it has employed for the internal discipline of
its members, we nonetheless hold that in order that the dismissal of an employee
may be validated by this Court, it is necessary that the grounds for dismissal are
justified by substantial evidence as duly appreciated by an impartial trier of
facts.40 The existence of Piquero's testimony was appreciated only by the
Disloyalty Board, but not by any of the impartial tribunals which heard Timbal's
case. The appreciation of such testimony by the Disloyalty Board without any
similar affirmation or concurrence by the NLRC-RAB, the NLRC, or the Court of
Appeals, cannot satisfy the substantive due process requirement as a means of
upholding Timbal's dismissal.
All told, we see no error on the part of the Court of Appeals when it held that
Timbal was illegally dismissed.
We now turn to the second issue raised, whether the Labor Arbiter correctly
awarded full backwages to Timbal.
Del Monte cites a jurisprudential rule that an employer who acted in good faith in
dismissing employees on the basis of a closed- shop provision may not be
penalized even if the dismissal were illegal. Such a doctrine is admittedly
supported by the early case of National Labor Union v. Zip Venetian Blind41 and
the later decision in 1989 of Soriano v. Atienza,42 wherein the Court affirmed the
disallowance of backwages or "financial assistance" in dismissals under the
aforementioned circumstance.
However, the Court now recognizes that this doctrine is inconsistent with Article
279 of the Labor Code, as amended by Republic Act No. 6715, which took effect
just five (5) days after Soriano was promulgated. It is now provided in the Labor
Code that "[a]n employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up
to the time of his actual reinstatement." Thus, where reinstatement is adjudged,
the award of backwages and other benefits continues beyond the date of the
labor arbiter's decision ordering reinstatement and extends up to the time said
order of reinstatement is actually carried out.43
Rep. Act No. 6715 effectively mitigated previous jurisprudence which had limited
the extent to which illegally dismissed employees could claim for backwages. We
explained in Ferrer v. NLRC:44
With the passage of Republic Act No. 6715 which took effect on March 21,
1989, Article 279 of the Labor Code was amended to read as follows:
The Labor Arbiter's ruling, which entitled Timbal to claim full backwages and
other allowances, "without qualifications and diminutions, computed from the time
[she was] illegally dismisse[d] up to the time [she] will be actually reinstated,"
conforms to Article 279 of the Labor Code. Hence, the Court of Appeals was
correct in affirming the Labor Arbiter insofar as Timbal was concerned.
Finally, we address the claim that the Court of Appeals erred when it did not rule
on Del Monte's claim for reimbursement against ALU. We do observe that
Section 5 of the CBA stipulated that "[ALU] assumes full responsibility of any
such termination [of any member of the bargaining unit who loses his
membership in ALU] and hereby agrees to hold [Del Monte] free from any liability
by judgment of a competent authority for claims arising out of dismissals made
upon demand of [ALU], and latter shall reimburse the former of such sums as it
shall have paid therefore."46
This stipulation does present a cause of action in Del Monte's favor should it be
held financially liable for the dismissal of an employee by reason of expulsion
from ALU. Nothing in this decision should preclude the operation of this provision
in the CBA. At the same time, we are unable to agree with Del Monte that the
Court of Appeals, or this Court, can implement this provision of the CBA and
accordingly directly condemn ALU to answer for the financial remuneration due
Timbal.
Before the Labor Arbiter, Del Monte had presented its cross-claim against ALU
for reimbursement should it be made liable for illegal dismissal or unfair labor
practice, pursuant to the CBA. The Labor Arbiter had actually passed upon this
claim for reimbursement, stating that "[as] for the cross-claims of respondent
DMPI and Tabusuares against the respondent ALU-TUCP, this Branch cannot
validly entertain the same in the absence of employer-employee relationship
between the former and the latter."47 We have examined Article 217 of the Labor
Code,48 which sets forth the original jurisdiction of the Labor Arbiters. Article
217(c) states:
Cases arising from the interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and
voluntary arbitration as may be provided in said agreements. [Emphasis
supplied.]
In contrast, Article 261 of the Labor Code indubitably vests on the Voluntary
Arbitrator or panel of Voluntary Arbitrators the "original and exclusive jurisdiction
to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement."49 Among those areas of
conflict traditionally within the jurisdiction of Voluntary Arbitrators are contract-
interpretation and contract-implementation,50the questions precisely involved in
Del Monte's claim seeking enforcement of the CBA provision mandating
restitution by ALU should the company be held financially liable for dismissals
pursuant to the union security clause.
In reconciling the grants of jurisdiction vested under Articles 261 and 217 of the
Labor Code, the Court has pronounced that "the original and exclusive
jurisdiction of the Labor Arbiter under Article 217(c) for money claims is limited
only to those arising from statutes or contracts other than a Collective Bargaining
Agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have
original and exclusive jurisdiction over money claims 'arising from the
interpretation or implementation of the Collective Bargaining Agreement and,
those arising from the interpretation or enforcement of company personnel
policies', under Article 261."51
Our conclusion that the Labor Arbiter in the instant case could not properly pass
judgment on the cross-claim is further strengthened by the fact that Del Monte
and ALU expressly recognized the jurisdiction of Voluntary Arbitrators in the
CBA. Section 2, Article XXXI of the CBA provides:
Should the parties fail to agree on the arbitrator, the same shall be drawn
by lottery from a list of arbitrators furnished by the Bureau of Labor
Relations of the Department of Labor and Employment.
xxxx
Thus, as the law indubitably precludes the Labor Arbiter from enforcing money
claims arising from the implementation of the CBA, the CBA herein
complementarily recognizes that it is the Voluntary Arbitrators which have
jurisdiction to hear the claim. The Labor Arbiter correctly refused to exercise
jurisdiction over Del Monte's cross-claim, and the Court of Appeals would have
no basis had it acted differently. At the same time, even as we affirm the award
of backwages against Del Monte, our ruling should not operate to prejudice in
any way whatever causes of action Del Monte may have against ALU, in
accordance with the CBA.
DECISION
May a corporation invoke its merger with another corporation as a valid ground to
exempt its "absorbed employees" from the coverage of a union shop clause
contained in its existing Collective Bargaining Agreement (CBA) with its own
certified labor union? That is the question we shall endeavor to answer in this
petition for review filed by an employer after the Court of Appeals decided in
favor of respondent union, which is the employees’ recognized collective
bargaining representative.
At the outset, we should call to mind the spirit and the letter of the Labor Code
provisions on union security clauses, specifically Article 248 (e), which states, "x
x x Nothing in this Code or in any other law shall stop the parties from requiring
membership in a recognized collective bargaining agent as a condition for
employment, except those employees who are already members of another
union at the time of the signing of the collective bargaining agreement."1 This
case which involves the application of a collective bargaining agreement with a
union shop clause should be resolved principally from the standpoint of the clear
provisions of our labor laws, and the express terms of the CBA in question, and
not by inference from the general consequence of the merger of corporations
under the Corporation Code, which obviously does not deal with and, therefore,
is silent on the terms and conditions of employment in corporations or juridical
entities.
This issue must be resolved NOW, instead of postponing it to a future time when
the CBA is renegotiated as suggested by the Honorable Justice Arturo D. Brion
because the same issue may still be resurrected in the renegotiation if the
absorbed employees insist on their privileged status of being exempt from any
union shop clause or any variant thereof.
We find it significant to note that it is only the employer, Bank of the Philippine
Islands (BPI), that brought the case up to this Court via the instant petition for
review; while the employees actually involved in the case did not pursue the
same relief, but had instead chosen in effect to acquiesce to the decision of the
Court of Appeals which effectively required them to comply with the union shop
clause under the existing CBA at the time of the merger of BPI with Far East
Bank and Trust Company (FEBTC), which decision had already become final
and executory as to the aforesaid employees. By not appealing the decision of
the Court of Appeals, the aforesaid employees are bound by the said Court of
Appeals’ decision to join BPI’s duly certified labor union. In view of the apparent
acquiescence of the affected FEBTC employees in the Court of Appeals’
decision, BPI should not have pursued this petition for review. However, even
assuming that BPI may do so, the same still cannot prosper.
What is before us now is a petition for review under Rule 45 of the Rules of Court
of the Decision2 dated September 30, 2003 of the Court of Appeals, as reiterated
in its Resolution3 of June 9, 2004, reversing and setting aside the Decision4 dated
November 23, 2001 of Voluntary Arbitrator Rosalina Letrondo-Montejo, in CA-
G.R. SP No. 70445, entitled BPI Employees Union-Davao Chapter-Federation of
Unions in BPI Unibank v. Bank of the Philippine Islands, et al.
On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of
Merger executed on January 20, 2000 by and between BPI, herein petitioner,
and FEBTC.5 This Article and Plan of Merger was approved by the Securities and
Exchange Commission on April 7, 2000.6
Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC
were transferred to and absorbed by BPI as the surviving corporation. FEBTC
employees, including those in its different branches across the country, were
hired by petitioner as its own employees, with their status and tenure recognized
and salaries and benefits maintained.
The parties both advert to certain provisions of the existing CBA, which are
quoted below:
ARTICLE I
Section 1. Recognition and Bargaining Unit – The BANK recognizes the UNION
as the sole and exclusive collective bargaining representative of all the regular
rank and file employees of the Bank offices in Davao City.
Section 2. Exclusions
ARTICLE II
Section 2. Union Shop - New employees falling within the bargaining unit as
defined in Article I of this Agreement, who may hereafter be regularly
employed by the Bank shall, within thirty (30) days after they become regular
employees, join the Union as a condition of their continued employment. It is
understood that membership in good standing in the Union is a condition of their
continued employment with the Bank.8 (Emphases supplied.)
After the meeting called by the Union, some of the former FEBTC employees
joined the Union, while others refused. Later, however, some of those who
initially joined retracted their membership.9
Respondent Union then sent notices to the former FEBTC employees who
refused to join, as well as those who retracted their membership, and called them
to a hearing regarding the matter. When these former FEBTC employees refused
to attend the hearing, the president of the Union requested BPI to implement the
Union Shop Clause of the CBA and to terminate their employment pursuant
thereto.10
Respondent Union filed a Motion for Reconsideration, but the Voluntary Arbitrator
denied the same in an Order dated March 25, 2002.13
This Court agrees with the voluntary arbitrator that the ABSORBED employees
are distinct and different from NEW employees BUT only in so far as their
employment service is concerned. The distinction ends there. In the case at bar,
the absorbed employees’ length of service from its former employer is tacked
with their employment with BPI. Otherwise stated, the absorbed employees
service is continuous and there is no gap in their service record.
This Court is persuaded that the similarities of "new" and "absorbed" employees
far outweighs the distinction between them. The similarities lies on the following,
to wit: (a) they have a new employer; (b) new working conditions; (c) new terms
of employment and; (d) new company policy to follow. As such, they should be
considered as "new" employees for purposes of applying the provisions of the
CBA regarding the "union-shop" clause.
To rule otherwise would definitely result to a very awkward and unfair situation
wherein the "absorbed" employees shall be in a different if not, better situation
than the existing BPI employees. The existing BPI employees by virtue of the
"union-shop" clause are required to pay the monthly union dues, remain as
members in good standing of the union otherwise, they shall be terminated from
the company, and other union-related obligations. On the other hand, the
"absorbed" employees shall enjoy the "fruits of labor" of the petitioner-union and
its members for nothing in exchange. Certainly, this would disturb industrial
peace in the company which is the paramount reason for the existence of the
CBA and the union.
The Supreme Court in the case of Manila Mandarin Employees Union vs. NLRC
(G.R. No. 76989, September 29, 1987) rule, to quote:
"This Court has held that a valid form of union security, and such a provision in a
collective bargaining agreement is not a restriction of the right of freedom of
association guaranteed by the Constitution.
Hence, the voluntary arbitrator erred in construing the CBA literally at the
expense of industrial peace in the company.
With the foregoing ruling from this Court, necessarily, the alternative prayer of the
petitioner to require the individual respondents to become members or if they
refuse, for this Court to direct respondent BPI to dismiss them, follows.15
II
In essence, the sole issue in this case is whether or not the former FEBTC
employees that were absorbed by petitioner upon the merger between FEBTC
and BPI should be covered by the Union Shop Clause found in the existing CBA
between petitioner and respondent Union.
Petitioner is of the position that the former FEBTC employees are not new
employees of BPI for purposes of applying the Union Shop Clause of the CBA,
on this note, petitioner points to Section 2, Article II of the CBA, which provides:
New employees falling within the bargaining unit as defined in Article I of this
Agreement, who may hereafter be regularly employed by the Bank shall, within
thirty (30) days after they become regular employees, join the Union as a
condition of their continued employment. It is understood that membership in
good standing in the Union is a condition of their continued employment with the
Bank.17 (Emphases supplied.)
Petitioner argues that the term "new employees" in the Union Shop Clause of the
CBA is qualified by the phrases "who may hereafter be regularly employed" and
"after they become regular employees" which led petitioner to conclude that the
"new employees" referred to in, and contemplated by, the Union Shop Clause of
the CBA were only those employees who were "new" to BPI, on account of
having been hired initially on a temporary or probationary status for possible
regular employment at some future date. BPI argues that the FEBTC employees
absorbed by BPI cannot be considered as "new employees" of BPI for purposes
of applying the Union Shop Clause of the CBA.18
We do not agree.
Section 2, Article II of the CBA is silent as to how one becomes a "regular
employee" of the BPI for the first time. There is nothing in the said provision
which requires that a "new" regular employee first undergo a temporary or
probationary status before being deemed as such under the union shop clause of
the CBA.
In the case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.,20 we ruled
that:
All employees in the bargaining unit covered by a Union Shop Clause in their
CBA with management are subject to its terms. However, under law and
jurisprudence, the following kinds of employees are exempted from its
coverage, namely, employees who at the time the union shop agreement takes
effect are bona fide members of a religious organization which prohibits its
members from joining labor unions on religious grounds;21 employees already in
the service and already members of a union other than the majority at the
time the union shop agreement took effect;22 confidential employees who are
excluded from the rank and file bargaining unit;23 and employees excluded from
the union shop by express terms of the agreement.
When certain employees are obliged to join a particular union as a requisite for
continued employment, as in the case of Union Security Clauses, this condition is
a valid restriction of the freedom or right not to join any labor organization
because it is in favor of unionism. This Court, on occasion, has even held that a
union security clause in a CBA is not a restriction of the right of freedom of
association guaranteed by the Constitution.24
Indeed, the situation of the former FEBTC employees in this case clearly does
not fall within the first three exceptions to the application of the Union Shop
Clause discussed earlier. No allegation or evidence of religious exemption or
prior membership in another union or engagement as a confidential employee
was presented by both parties. The sole category therefore in which petitioner
may prove its claim is the fourth recognized exception or whether the former
FEBTC employees are excluded by the express terms of the existing CBA
between petitioner and respondent.
To reiterate, petitioner insists that the term "new employees," as the same is
used in the Union Shop Clause of the CBA at issue, refers only to employees
hired by BPI as non-regular employees who later qualify for regular employment
and become regular employees, and not those who, as a legal consequence of a
merger, are allegedly automatically deemed regular employees of BPI. However,
the CBA does not make a distinction as to how a regular employee attains such a
status. Moreover, there is nothing in the Corporation Law and the merger
agreement mandating the automatic employment as regular employees by the
surviving corporation in the merger.
It is apparent that petitioner hinges its argument that the former FEBTC
employees were absorbed by BPI merely as a legal consequence of a merger
based on the characterization by the Voluntary Arbiter of these absorbed
employees as included in the "assets and liabilities" of the dissolved corporation -
assets because they help the Bank in its operation and liabilities because
redundant employees may be terminated and company benefits will be paid to
them, thus reducing the Bank’s financial status. Based on this ratiocination, she
ruled that the same are not new employees of BPI as contemplated by the CBA
at issue, noting that the Certificate of Filing of the Articles of Merger and Plan of
Merger between FEBTC and BPI stated that "x x x the entire assets and liabilities
of FAR EASTERN BANK & TRUST COMPANY will be transferred to
and absorbed by the BANK OF THE PHILIPPINE ISLANDS x x x (underlining
supplied)."26 In sum, the Voluntary Arbiter upheld the reasoning of petitioner that
the FEBTC employees became BPI employees by "operation of law" because
they are included in the term "assets and liabilities."
In legal parlance, however, human beings are never embraced in the term
"assets and liabilities." Moreover, BPI’s absorption of former FEBTC employees
was neither by operation of law nor by legal consequence of contract. There was
no government regulation or law that compelled the merger of the two banks or
the absorption of the employees of the dissolved corporation by the surviving
corporation. Had there been such law or regulation, the absorption of employees
of the non-surviving entities of the merger would have been mandatory on the
surviving corporation.27 In the present case, the merger was voluntarily entered
into by both banks presumably for some mutually acceptable consideration. In
fact, the Corporation Code does not also mandate the absorption of the
employees of the non-surviving corporation by the surviving corporation in the
case of a merger. Section 80 of the Corporation Code provides:
Significantly, too, the Articles of Merger and Plan of Merger dated April 7, 2000
did not contain any specific stipulation with respect to the employment contracts
of existing personnel of the non-surviving entity which is FEBTC. Unlike the
Voluntary Arbitrator, this Court cannot uphold the reasoning that the general
stipulation regarding transfer of FEBTC assets and liabilities to BPI as set forth in
the Articles of Merger necessarily includes the transfer of all FEBTC employees
into the employ of BPI and neither BPI nor the FEBTC employees allegedly could
do anything about it. Even if it is so, it does not follow that the absorbed
employees should not be subject to the terms and conditions of
employment obtaining in the surviving corporation.
The rule is that unless expressly assumed, labor contracts such as employment
contracts and collective bargaining agreements are not enforceable against a
transferee of an enterprise, labor contracts being in personam, thus binding only
between the parties. A labor contract merely creates an action in personam and
does not create any real right which should be respected by third parties. This
conclusion draws its force from the right of an employer to select his employees
and to decide when to engage them as protected under our Constitution, and the
same can only be restricted by law through the exercise of the police power.28
Furthermore, this Court believes that it is contrary to public policy to declare the
former FEBTC employees as forming part of the assets or liabilities of FEBTC
that were transferred and absorbed by BPI in the Articles of Merger. Assets and
liabilities, in this instance, should be deemed to refer only to property rights and
obligations of FEBTC and do not include the employment contracts of its
personnel. A corporation cannot unilaterally transfer its employees to another
employer like chattel. Certainly, if BPI as an employer had the right to choose
who to retain among FEBTC’s employees, FEBTC employees had the
concomitant right to choose not to be absorbed by BPI. Even though FEBTC
employees had no choice or control over the merger of their employer with BPI,
they had a choice whether or not they would allow themselves to be absorbed by
BPI. Certainly nothing prevented the FEBTC’s employees from resigning or
retiring and seeking employment elsewhere instead of going along with the
proposed absorption.
There appears to be no dispute that with respect to FEBTC employees that BPI
chose not to employ or FEBTC employees who chose to retire or be separated
from employment instead of "being absorbed," BPI’s assumed liability to these
employees pursuant to the merger is FEBTC’s liability to them in terms of
separation pay,29retirement pay30 or other benefits that may be due them
depending on the circumstances.
In Carver v Brien (1942) 315 Ill App 643, 43 NE2d 597, the shop work of three
formerly separate railroad corporations, which had previously operated separate
facilities, was consolidated in the shops of one of the roads. Displaced
employees of the other two roads were given preference for the new jobs created
in the shops of the railroad which took over the work. A controversy arose
between the employees as to whether the displaced employees were entitled to
carry with them to the new jobs the seniority rights they had accumulated with
their prior employers, that is, whether the rosters of the three corporations, for
seniority purposes, should be "dovetailed" or whether the transferring employees
should go to the bottom of the roster of their new employer. Labor
representatives of the various systems involved attempted to work out an
agreement which, in effect, preserved the seniority status obtained in the prior
employment on other roads, and the action was for specific performance of this
agreement against a demurring group of the original employees of the railroad
which was operating the consolidated shops. The relief sought was denied, the
court saying that, absent some specific contract provision otherwise, seniority
rights were ordinarily limited to the employment in which they were earned, and
concluding that the contract for which specific performance was sought was not
such a completed and binding agreement as would support such equitable relief,
since the railroad, whose concurrence in the arrangements made was essential
to their effectuation, was not a party to the agreement.
Where the provisions of a labor contract provided that in the event that a
trucker absorbed the business of another private contractor or common carrier,
or was a party to a merger of lines, the seniority of the employees absorbedor
affected thereby should be determined by mutual agreement between the trucker
and the unions involved, it was held in Moore v International Brotherhood of
Teamsters, etc. (1962, Ky) 356 SW2d 241, that the trucker was not required to
absorb the affected employees as well as the business, the court saying that they
could find no such meaning in the above clause, stating that it dealt only with
seniority, and not with initial employment. Unless and until the absorbing
company agreed to take the employees of the company whose business was
being absorbed, no seniority problem was created, said the court, hence the
provision of the contract could have no application. Furthermore, said the court, it
did not require that the absorbing company take these employees, but only that if
it did take them the question of seniority between the old
and new employees would be worked out by agreement or else be submitted to
the grievance procedure.31 (Emphasis ours.)
Indeed, from the tenor of local and foreign authorities, in voluntary mergers,
absorption of the dissolved corporation’s employees or the recognition of the
absorbed employees’ service with their previous employer may be demanded
from the surviving corporation if required by provision of law or contract. The
dissent of Justice Arturo D. Brion tries to make a distinction as to the terms and
conditions of employment of the absorbed employees in the case of a corporate
merger or consolidation which will, in effect, take away from corporate
management the prerogative to make purely business decisions on the hiring of
employees or will give it an excuse not to apply the CBA in force to the prejudice
of its own employees and their recognized collective bargaining agent. In this
regard, we disagree with Justice Brion.
Justice Brion takes the position that because the surviving corporation continues
the personality of the dissolved corporation and acquires all the latter’s rights and
obligations, it is duty-bound to absorb the dissolved corporation’s employees,
even in the absence of a stipulation in the plan of merger. He proposes that this
interpretation would provide the necessary protection to labor as it spares
workers from being "left in legal limbo."
Moreover, assuming for the sake of argument that there is an obligation to hire or
absorb all employees of the non-surviving corporation, there is still no basis to
conclude that the terms and conditions of employment under a valid collective
bargaining agreement in force in the surviving corporation should not be made to
apply to the absorbed employees.
The Corporation Code and the Subject Merger Agreement are Silent on Efficacy,
Terms and Conditions of Employment Contracts
Even assuming we accept Justice Brion’s theory that in a merger situation the
surviving corporation should be compelled to absorb the dissolved corporation’s
employees as a legal consequence of the merger and as a social justice
consideration, it bears to emphasize his dissent also recognizes that the
employee may choose to end his employment at any time by voluntarily
resigning. For the employee to be "absorbed" by BPI, it requires the employees’
implied or express consent. It is because of this human element in employment
contracts and the personal, consensual nature thereof that we cannot agree that,
in a merger situation, employment contracts are automatically transferable from
one entity to another in the same manner that a contract pertaining to purely
proprietary rights – such as a promissory note or a deed of sale of property – is
perfectly and automatically transferable to the surviving corporation.
That BPI is the same entity as FEBTC after the merger is but a legal fiction
intended as a tool to adjudicate rights and obligations between and among the
merged corporations and the persons that deal with them. Although in a merger it
is as if there is no change in the personality of the employer, there is in reality a
change in the situation of the employee. Once an FEBTC employee is absorbed,
there are presumably changes in his condition of employment even if his
previous tenure and salary rate is recognized by BPI. It is reasonable to assume
that BPI would have different rules and regulations and company practices than
FEBTC and it is incumbent upon the former FEBTC employees to obey these
new rules and adapt to their new environment. Not the least of the changes in
employment condition that the absorbed FEBTC employees must face is the fact
that prior to the merger they were employees of an unorganized establishment
and after the merger they became employees of a unionized company that had
an existing collective bargaining agreement with the certified union. This
presupposes that the union who is party to the collective bargaining agreement is
the certified union that has, in the appropriate certification election, been shown
to represent a majority of the members of the bargaining unit.
Likewise, with respect to FEBTC employees that BPI chose to employ and who
also chose to be absorbed, then due to BPI’s blanket assumption of liabilities and
obligations under the articles of merger, BPI was bound to respect the years of
service of these FEBTC employees and to pay the same, or commensurate
salaries and other benefits that these employees previously enjoyed with FEBTC.
As the Union likewise pointed out in its pleadings, there were benefits under
the CBA that the former FEBTC employees did not enjoy with their
previous employer. As BPI employees, they will enjoy all these CBA benefits
upon their "absorption." Thus, although in a sense BPI is continuing FEBTC’s
employment of these absorbed employees, BPI’s employment of these absorbed
employees was not under exactly the same terms and conditions as stated in the
latter’s employment contracts with FEBTC. This further strengthens the view that
BPI and the former FEBTC employees voluntarily contracted with each other for
their employment in the surviving corporation.
In any event, it is of no moment that the former FEBTC employees retained the
regular status that they possessed while working for their former employer upon
their absorption by petitioner. This fact would not remove them from the scope of
the phrase "new employees" as contemplated in the Union Shop Clause of the
CBA, contrary to petitioner’s insistence that the term "new employees" only refers
to those who are initially hired as non-regular employees for possible regular
employment.
The Union Shop Clause in the CBA simply states that "new employees" who
during the effectivity of the CBA "may be regularly employed" by the Bank must
join the union within thirty (30) days from their regularization. There is nothing in
the said clause that limits its application to only new employees who possess
non-regular status, meaning probationary status, at the start of their employment.
Petitioner likewise failed to point to any provision in the CBA expressly excluding
from the Union Shop Clause new employees who are "absorbed" as regular
employees from the beginning of their employment. What is indubitable from the
Union Shop Clause is that upon the effectivity of the CBA, petitioner’s new
regular employees (regardless of the manner by which they became employees
of BPI) are required to join the Union as a condition of their continued
employment.
The dissenting opinion of Justice Brion dovetails with Justice Carpio’s view only
in their restrictive interpretation of who are "new employees" under the CBA. To
our dissenting colleagues, the phrase "new employees" (who are covered by the
union shop clause) should only include new employees who were hired as
probationary during the life of the CBA and were later granted regular status.
They propose that the former FEBTC employees who were deemed regular
employees from the beginning of their employment with BPI should be treated as
a special class of employees and be excluded from the union shop clause.
Justice Brion himself points out that there is no clear, categorical definition of
"new employee" in the CBA. In other words, the term "new employee" as used in
the union shop clause is used broadly without any qualification or distinction.
However, the Court should not uphold an interpretation of the term "new
employee" based on the general and extraneous provisions of the Corporation
Code on merger that would defeat, rather than fulfill, the purpose of the union
shop clause. To reiterate, the provision of the Article 248(e) of the Labor Code in
point mandates that nothing in the said Code or any other law should stop the
parties from requiring membership in a recognized collective bargaining agent as
a condition of employment.
Significantly, petitioner BPI never stretches its arguments so far as to state that
the absorbed employees should be deemed "old employees" who are not
covered by the Union Shop Clause. This is not surprising.
By law and jurisprudence, a merger only becomes effective upon approval by the
Securities and Exchange Commission (SEC) of the articles of merger. In
Associated Bank v. Court of Appeals,33 we held:
In other words, even though BPI steps into the shoes of FEBTC as the surviving
corporation, BPI does so at a particular point in time, i.e., the effectivity of the
merger upon the SEC’s issuance of a certificate of merger. In fact, the articles of
merger themselves provided that both BPI and FEBTC will continue their
respective business operations until the SEC issues the certificate of merger and
in the event SEC does not issue such a certificate, they agree to hold each other
blameless for the non-consummation of the merger.
Considering the foregoing principle, BPI could have only become the employer of
the FEBTC employees it absorbed after the approval by the SEC of the merger.
If the SEC did not approve the merger, BPI would not be in the position to absorb
the employees of FEBTC at all. Indeed, there is evidence on record that BPI
made the assignments of its absorbed employees in BPI effective April 10, 2000,
or after the SEC’s approval of the merger.34 In other words, BPI became the
employer of the absorbed employees only at some point after the effectivity of
the merger, notwithstanding the fact that the absorbed employees’ years of
service with FEBTC were voluntarily recognized by BPI.
Even assuming for the sake of argument that we consider the absorbed FEBTC
employees as "old employees" of BPI who are not members of any union (i.e., it
is their date of hiring by FEBTC and not the date of their absorption that is
considered), this does not necessarily exclude them from the union security
clause in the CBA. The CBA subject of this case was effective from April 1, 1996
until March 31, 2001. Based on the allegations of the former FEBTC employees
themselves, there were former FEBTC employees who were hired by FEBTC
after April 1, 1996 and if their date of hiring by FEBTC is considered as their
date of hiring by BPI, they would undeniably be considered "new employees" of
BPI within the contemplation of the Union Shop Clause of the said CBA.
Otherwise, it would lead to the absurd situation that we would discriminate not
only between new BPI employees (hired during the life of the CBA) and former
FEBTC employees (absorbed during the life of the CBA) but also among the
former FEBTC employees themselves. In other words, we would be treating
employees who are exactly similarly situated (i.e., the group of absorbed FEBTC
employees) differently. This hardly satisfies the demands of equality and justice.
Petitioner limited itself to the argument that its absorbed employees do not fall
within the term "new employees" contemplated under the Union Shop Clause
with the apparent objective of excluding all, and not just some, of the former
FEBTC employees from the application of the Union Shop Clause.
However, in law or even under the express terms of the CBA, there is no special
class of employees called "absorbed employees." In order for the Court to apply
or not apply the Union Shop Clause, we can only classify the former FEBTC
employees as either "old" or "new." If they are not "old" employees, they are
necessarily "new" employees. If they are new employees, the Union Shop
Clause did not distinguish between new employees who are non-regular at their
hiring but who subsequently become regular and new employees who are
"absorbed" as regular and permanent from the beginning of their employment.
The Union Shop Clause did not so distinguish, and so neither must we.
Verily, we agree with the Court of Appeals that there are no substantial
differences between a newly hired non-regular employee who was regularized
weeks or months after his hiring and a new employee who was absorbed from
another bank as a regular employee pursuant to a merger, for purposes of
applying the Union Shop Clause. Both employees were hired/employed only after
the CBA was signed. At the time they are being required to join the Union, they
are both already regular rank and file employees of BPI. They belong to the
same bargaining unit being represented by the Union. They both enjoy benefits
that the Union was able to secure for them under the CBA. When they both
entered the employ of BPI, the CBA and the Union Shop Clause therein were
already in effect and neither of them had the opportunity to express their
preference for unionism or not. We see no cogent reason why the Union Shop
Clause should not be applied equally to these two types of new employees, for
they are undeniably similarly situated.
It is but fair that similarly situated employees who enjoy the same privileges of a
CBA should be likewise subject to the same obligations the CBA imposes upon
them. A contrary interpretation of the Union Shop Clause will be inimical to
industrial peace and workers’ solidarity. This unfavorable situation will not be
sufficiently addressed by asking the former FEBTC employees to simply pay
agency fees to the Union in lieu of union membership, as the dissent of Justice
Carpio suggests. The fact remains that other new regular employees, to whom
the "absorbed employees" should be compared, do not have the option to simply
pay the agency fees and they must join the Union or face termination.
Petitioner’s restrictive reading of the Union Shop Clause could also inadvertently
open an avenue, which an employer could readily use, in order to dilute the
membership base of the certified union in the collective bargaining unit (CBU). By
entering into a voluntary merger with a non-unionized company that employs
more workers, an employer could get rid of its existing union by the simple
expedient of arguing that the "absorbed employees" are not new employees, as
are commonly understood to be covered by a CBA’s union security clause. This
could then lead to a new majority within the CBU that could potentially threaten
the majority status of the existing union and, ultimately, spell its demise as the
CBU’s bargaining representative. Such a dreaded but not entirely far-fetched
scenario is no different from the ingenious and creative "union-busting" schemes
that corporations have fomented throughout the years, which this Court has
foiled time and again in order to preserve and protect the valued place of labor in
this jurisdiction consistent with the Constitution’s mandate of insuring social
justice.
There is nothing in the Labor Code and other applicable laws or the CBA
provision at issue that requires that a new employee has to be of probationary or
non-regular status at the beginning of the employment relationship. An employer
may confer upon a new employee the status of regular employment even at the
onset of his engagement. Moreover, no law prohibits an employer from
voluntarily recognizing the length of service of a new employee with a previous
employer in relation to computation of benefits or seniority but it should not
unduly be interpreted to exclude them from the coverage of the CBA which is a
binding contractual obligation of the employer and employees.
The union shop clause offers protection to the certified bargaining agent by
ensuring that future regular employees who (a) enter the employ of the company
during the life of the CBA; (b) are deemed part of the collective bargaining unit;
and (c) whose number will affect the number of members of the collective
bargaining unit will be compelled to join the union. Such compulsion has legal
effect, precisely because the employer by voluntarily entering in to a union shop
clause in a CBA with the certified bargaining agent takes on the responsibility of
dismissing the new regular employee who does not join the union.
Without the union shop clause or with the restrictive interpretation thereof as
proposed in the dissenting opinions, the company can jeopardize the majority
status of the certified union by excluding from union membership all new regular
employees whom the Company will "absorb" in future mergers and all new
regular employees whom the Company hires as regular from the beginning of
their employment without undergoing a probationary period. In this manner, the
Company can increase the number of members of the collective bargaining unit
and if this increase is not accompanied by a corresponding increase in union
membership, the certified union may lose its majority status and render it
vulnerable to attack by another union who wishes to represent the same
bargaining unit.35
Or worse, a certified union whose membership falls below twenty percent (20%)
of the total members of the collective bargaining unit may lose its status as a
legitimate labor organization altogether, even in a situation where there is no
competing union.36 In such a case, an interested party may file for the
cancellation of the union’s certificate of registration with the Bureau of Labor
Relations.37
Plainly, the restrictive interpretation of the union shop clause would place the
certified union’s very existence at the mercy and control of the
employer. Relevantly, only BPI, the employer appears to be interested in
pursuing this case. The former FEBTC employees have not joined BPI in this
appeal.
For the foregoing reasons, Justice Carpio’s proposal to simply require the former
FEBTC to pay agency fees is wholly inadequate to compensate the certified
union for the loss of additional membership supposedly guaranteed by
compliance with the union shop clause. This is apart from the fact that treating
these "absorbed employees" as a special class of new employees does not
encourage worker solidarity in the company since another class of new
employees (i.e. those whose were hired as probationary and later regularized
during the life of the CBA) would not have the option of substituting union
membership with payment of agency fees.
Justice Brion, on the other hand, appears to recognize the inherent unfairness of
perpetually excluding the "absorbed" employees from the ambit of the union shop
clause. He proposes that this matter be left to negotiation by the parties in the
next CBA. To our mind, however, this proposal does not sufficiently address the
issue. With BPI already taking the position that employees "absorbed" pursuant
to its voluntary mergers with other banks are exempt from the union shop clause,
the chances of the said bank ever agreeing to the inclusion of such employees in
a future CBA is next to nil – more so, if BPI’s narrow interpretation of the union
shop clause is sustained by this Court.
Right of an Employee not to Join a Union is not Absolute and Must Give Way to
the Collective Good of All Members of the Bargaining Unit
The dissenting opinions place a premium on the fact that even if the former
FEBTC employees are not old employees, they nonetheless were employed as
regular and permanent employees without a gap in their service. However, an
employee’s permanent and regular employment status in itself does not
necessarily exempt him from the coverage of a union shop clause.
In the past this Court has upheld even the more stringent type of union security
clause, i.e., the closed shop provision, and held that it can be made applicable to
old employees who are already regular and permanent but have chosen not to
join a union. In the early case of Juat v. Court of Industrial Relations,38 the Court
held that an old employee who had no union may be compelled to join the union
even if the collective bargaining agreement (CBA) imposing the closed shop
provision was only entered into seven years after of the hiring of the said
employee. To quote from that decision:
xxxx
This Court had categorically held in the case of Freeman Shirt Manufacturing
Co., Inc., et al. vs. Court of Industrial Relations, et al., G.R. No. L-16561, Jan. 28,
1961, that the closed-shop proviso of a collective bargaining agreement entered
into between an employer and a duly authorized labor union is applicable not
only to the employees or laborers that are employed after the collective
bargaining agreement had been entered into but also to old employees who are
not members of any labor union at the time the said collective bargaining
agreement was entered into. In other words, if an employee or laborer is already
a member of a labor union different from the union that entered into a collective
bargaining agreement with the employer providing for a closed-shop, said
employee or worker cannot be obliged to become a member of that union which
had entered into a collective bargaining agreement with the employer as a
condition for his continued employment. (Emphasis and underscoring supplied.)
Although the present case does not involve a closed shop provision that included
even old employees, the Juat example is but one of the cases that laid down the
doctrine that the right not to join a union is not absolute. Theoretically, there is
nothing in law or jurisprudence to prevent an employer and a union from
stipulating that existing employees (who already attained regular and permanent
status but who are not members of any union) are to be included in the coverage
of a union security clause. Even Article 248(e) of the Labor Code only expressly
exempts old employees who already have a union from inclusion in a union
security clause.39
Contrary to the assertion in the dissent of Justice Carpio, Juat has not been
overturned by Victoriano v. Elizalde Rope Workers’ Union40 nor by Reyes v.
Trajano.41 The factual milieus of these three cases are vastly different.
In Victoriano, the issue that confronted the Court was whether or not employees
who were members of the Iglesia ni Kristo (INK) sect could be compelled to join
the union under a closed shop provision, despite the fact that their religious
beliefs prohibited them from joining a union. In that case, the Court was asked to
balance the constitutional right to religious freedom against a host of other
constitutional provisions including the freedom of association, the non-
establishment clause, the non-impairment of contracts clause, the equal
protection clause, and the social justice provision. In the end, the Court held that
"religious freedom, although not unlimited, is a fundamental personal right and
liberty, and has a preferred position in the hierarchy of values."42
However, Victoriano is consistent with Juat since they both affirm that the right to
refrain from joining a union is not absolute. The relevant portion of Victoriano is
quoted below:
If Juat exemplified an exception to the rule that a person has the right not to join
a union, Victoriano merely created an exception to the exception on the ground
of religious freedom.
Reyes, on the other hand, did not involve the interpretation of any union security
clause. In that case, there was no certified bargaining agent yet since the
controversy arose during a certification election. In Reyes, the Court highlighted
the idea that the freedom of association included the right not to associate or join
a union in resolving the issue whether or not the votes of members of the INK
sect who were part of the bargaining unit could be excluded in the results of a
certification election, simply because they were not members of the two
contesting unions and were expected to have voted for "NO UNION" in view of
their religious affiliation. The Court upheld the inclusion of the votes of the INK
members since in the previous case of Victoriano we held that INK members
may not be compelled to join a union on the ground of religious freedom and
even without Victoriano every employee has the right to vote "no union" in a
certification election as part of his freedom of association. However, Reyes is not
authority for Justice Carpio’s proposition that an employee who is not a member
of any union may claim an exemption from an existing union security clause
because he already has regular and permanent status but simply prefers not to
join a union.
The other cases cited in Justice Carpio’s dissent on this point are likewise
inapplicable. Basa v. Federacion Obrera de la Industria Tabaquera y Otros
Trabajadores de Filipinas,44 Anucension v. National Labor Union,45 and Gonzales
v. Central Azucarera de Tarlac Labor Union46 all involved members of the INK. In
line with Victoriano, these cases upheld the INK members’ claimed exemption
from the union security clause on religious grounds. In the present case, the
former FEBTC employees never claimed any religious grounds for their
exemption from the Union Shop Clause. As for Philips Industrial Development,
Inc. v. National Labor Relations Corporation47 and Knitjoy Manufacturing, Inc. v.
Ferrer-Calleja,48 the employees who were exempted from joining the respondent
union or who were excluded from participating in the certification election were
found to be not members of the bargaining unit represented by respondent union
and were free to form/join their own union. In the case at bar, it is undisputed that
the former FEBTC employees were part of the bargaining unit that the Union
represented. Thus, the rulings in Philips and Knitjoy have no relevance to the
issues at hand.
Time and again, this Court has ruled that the individual employee’s right not to
join a union may be validly restricted by a union security clause in a CBA49 and
such union security clause is not a violation of the employee’s constitutional right
to freedom of association.50
The rationale for upholding the validity of union shop clauses in a CBA, even if
they impinge upon the individual employee’s right or freedom of association, is
not to protect the union for the union’s sake. Laws and jurisprudence promote
unionism and afford certain protections to the certified bargaining agent in a
unionized company because a strong and effective union presumably benefits all
employees in the bargaining unit since such a union would be in a better position
to demand improved benefits and conditions of work from the employer. This is
the rationale behind the State policy to promote unionism declared in the
Constitution, which was elucidated in the above-cited case of Liberty Flour Mills
Employees v. Liberty Flour Mills, Inc.54
In the case at bar, since the former FEBTC employees are deemed covered by
the Union Shop Clause, they are required to join the certified bargaining agent,
which supposedly has gathered the support of the majority of workers within the
bargaining unit in the appropriate certification proceeding. Their joining the
certified union would, in fact, be in the best interests of the former FEBTC
employees for it unites their interests with the majority of employees in the
bargaining unit. It encourages employee solidarity and affords sufficient
protection to the majority status of the union during the life of the CBA which are
the precisely the objectives of union security clauses, such as the Union Shop
Clause involved herein. We are indeed not being called to balance the interests
of individual employees as against the State policy of promoting unionism, since
the employees, who were parties in the court below, no longer contested the
adverse Court of Appeals’ decision. Nonetheless, settled jurisprudence has
already swung the balance in favor of unionism, in recognition that ultimately the
individual employee will be benefited by that policy. In the hierarchy of
constitutional values, this Court has repeatedly held that the right to abstain from
joining a labor organization is subordinate to the policy of encouraging unionism
as an instrument of social justice.
Also in the dissenting opinion of Justice Carpio, he maintains that one of the dire
consequences to the former FEBTC employees who refuse to join the union is
the forfeiture of their retirement benefits. This is clearly not the case precisely
because BPI expressly recognized under the merger the length of service of the
absorbed employees with FEBTC. Should some refuse to become members of
the union, they may still opt to retire if they are qualified under the law, the
applicable retirement plan, or the CBA, based on their combined length of service
with FEBTC and BPI. Certainly, there is nothing in the union shop clause that
should be read as to curtail an employee’s eligibility to apply for retirement if
qualified under the law, the existing retirement plan, or the CBA as the case may
be.
In sum, this Court finds it reasonable and just to conclude that the Union Shop
Clause of the CBA covers the former FEBTC employees who were
hired/employed by BPI during the effectivity of the CBA in a manner which
petitioner describes as "absorption." A contrary appreciation of the facts of this
case would, undoubtedly, lead to an inequitable and very volatile labor situation
which this Court has consistently ruled against.1av vphi1
In the case of former FEBTC employees who initially joined the union but later
withdrew their membership, there is even greater reason for the union to request
their dismissal from the employer since the CBA also contained a Maintenance of
Membership Clause.
A final point in relation to procedural due process, the Court is not unmindful that
the former FEBTC employees’ refusal to join the union and BPI’s refusal to
enforce the Union Shop Clause in this instance may have been based on the
honest belief that the former FEBTC employees were not covered by said clause.
In the interest of fairness, we believe the former FEBTC employees should be
given a fresh thirty (30) days from notice of finality of this decision to join the
union before the union demands BPI to terminate their employment under the
Union Shop Clause, assuming said clause has been carried over in the present
CBA and there has been no material change in the situation of the parties.
RESOLUTION
In the present incident, petitioner Bank of the Philippine Islands (BPI) moves for
reconsideration1 of our Decision dated August 10, 2010, holding that former
employees of the Far East Bank and Trust Company (FEBTC) "absorbed" by BPI
pursuant to the two banks’ merger in 2000 were covered by the Union Shop
Clause in the then existing collective bargaining agreement (CBA)2 of BPI with
respondent BPI Employees Union-Davao Chapter-Federation of Unions in BPI
Unibank (the Union).
To recall, the Union Shop Clause involved in this long standing controversy
provided, thus:
ARTICLE II
xxxx
Section 2. Union Shop - New employees falling within the bargaining unit as
defined in Article I of this Agreement, who may hereafter be regularly employed
by the Bank shall, within thirty (30) days after they become regular employees,
join the Union as a condition of their continued employment. It is understood that
membership in good standing in the Union is a condition of their continued
employment with the Bank.3 (Emphases supplied.)
The bone of contention between the parties was whether or not the "absorbed"
FEBTC employees fell within the definition of "new employees" under the Union
Shop Clause, such that they may be required to join respondent union and if they
fail to do so, the Union may request BPI to terminate their employment, as the
Union in fact did in the present case. Needless to state, BPI refused to accede to
the Union’s request. Although BPI won the initial battle at the Voluntary Arbitrator
level, BPI’s position was rejected by the Court of Appeals which ruled that the
Voluntary Arbitrator’s interpretation of the Union Shop Clause was at war with the
spirit and rationale why the Labor Code allows the existence of such provision.
On review with this Court, we upheld the appellate court’s ruling and disposed of
the case as follows:
In seeking the reversal of our August 10, 2010 Decision, petitioner insists that the
parties to the CBA clearly intended to limit the application of the Union Shop
Clause only to new employees who were hired as non-regular employees but
later attained regular status at some point after hiring. FEBTC employees cannot
be considered new employees as BPI merely stepped into the shoes of FEBTC
as an employer purely as a consequence of the merger.5
Pursuant to our directive, the Union filed its Comment9 on the Motion for
Reconsideration. In opposition to petitioner’s arguments, the Union, in turn,
adverts to our discussion in the August 10, 2010 Decision regarding the voluntary
nature of the merger between BPI and FEBTC, the lack of an express stipulation
in the Articles of Merger regarding the transfer of employment contracts to the
surviving corporation, and the consensual nature of employment contracts as
valid bases for the conclusion that former FEBTC employees should be deemed
new employees.10 The Union argues that the creation of employment relations
between former FEBTC employees and BPI (i.e., BPI’s selection and
engagement of former FEBTC employees, its payment of their wages, power of
dismissal and of control over the employees’ conduct) occurred after the merger,
or to be more precise, after the Securities and Exchange Commission’s (SEC)
approval of the merger.11 The Union likewise points out that BPI failed to offer
any counterargument to the Court’s reasoning that:
The rationale for upholding the validity of union shop clauses in a CBA, even if
they impinge upon the individual employee's right or freedom of association, is
not to protect the union for the union's sake. Laws and jurisprudence promote
unionism and afford certain protections to the certified bargaining agent in a
unionized company because a strong and effective union presumably benefits all
employees in the bargaining unit since such a union would be in a better position
to demand improved benefits and conditions of work from the employer. x x x.
While most of the arguments offered by BPI have already been thoroughly
addressed in the August 10, 2010 Decision, we find that a qualification of our
ruling is in order only with respect to the interpretation of the provisions of the
Articles of Merger and its implications on the former FEBTC employees’ security
of tenure.
Taking a second look on this point, we have come to agree with Justice Brion’s
view that it is more in keeping with the dictates of social justice and the State
policy of according full protection to labor to deem employment contracts as
automatically assumed by the surviving corporation in a merger, even in the
absence of an express stipulation in the articles of merger or the merger plan. In
his dissenting opinion, Justice Brion reasoned that:
In any event, it is of no moment that the former FEBTC employees retained the
regular status that they possessed while working for their former employer upon
their absorption by petitioner. This fact would not remove them from the scope of
the phrase "new employees" as contemplated in the Union Shop Clause of the
CBA, contrary to petitioner's insistence that the term "new employees" only refers
to those who are initially hired as non-regular employees for possible regular
employment.
The Union Shop Clause in the CBA simply states that "new employees" who
during the effectivity of the CBA "may be regularly employed" by the Bank must
join the union within thirty (30) days from their regularization. There is nothing in
the said clause that limits its application to only new employees who possess
non-regular status, meaning probationary status, at the start of their employment.
Petitioner likewise failed to point to any provision in the CBA expressly excluding
from the Union Shop Clause new employees who are "absorbed" as regular
employees from the beginning of their employment. What is indubitable from the
Union Shop Clause is that upon the effectivity of the CBA, petitioner's new
regular employees (regardless of the manner by which they became employees
of BPI) are required to join the Union as a condition of their continued
employment.15
Although by virtue of the merger BPI steps into the shoes of FEBTC as a
successor employer as if the former had been the employer of the latter’s
employees from the beginning it must be emphasized that, in reality, the legal
consequences of the merger only occur at a specific date, i.e., upon its effectivity
which is the date of approval of the merger by the SEC. Thus, we observed in the
Decision that BPI and FEBTC stipulated in the Articles of Merger that they will
both continue their respective business operations until the SEC issues the
certificate of merger and in the event no such certificate is issued, they shall hold
each other blameless for the non-consummation of the merger.16We likewise
previously noted that BPI made its assignments of the former FEBTC employees
effective on April 10, 2000, or after the SEC approved the merger.17 In other
words, the obligation of BPI to pay the salaries and benefits of the former FEBTC
employees and its right of discipline and control over them only arose with the
effectivity of the merger. Concomitantly, the obligation of former FEBTC
employees to render service to BPI and their right to receive benefits from the
latter also arose upon the effectivity of the merger. What is material is that all of
these legal consequences of the merger took place during the life of an existing
and valid CBA between BPI and the Union wherein they have mutually
consented to include a Union Shop Clause.
From the plain, ordinary meaning of the terms of the Union Shop Clause, it
covers employees who (a) enter the employ of BPI during the term of the CBA;
(b) are part of the bargaining unit (defined in the CBA as comprised of BPI’s rank
and file employees); and (c) become regular employees without distinguishing as
to the manner they acquire their regular status. Consequently, the number of
such employees may adversely affect the majority status of the Union and even
its existence itself, as already amply explained in the Decision.
Indeed, there are differences between (a) new employees who are hired as
probationary or temporary but later regularized, and (b) new employees who, by
virtue of a merger, are absorbed from another company as regular and
permanent from the beginning of their employment with the surviving corporation.
It bears reiterating here that these differences are too insubstantial to warrant the
exclusion of the absorbed employees from the application of the Union Shop
Clause. In the Decision, we noted that:
Verily, we agree with the Court of Appeals that there are no substantial
differences between a newly hired non-regular employee who was regularized
weeks or months after his hiring and a new employee who was absorbed from
another bank as a regular employee pursuant to a merger, for purposes of
applying the Union Shop Clause. Both employees were hired/employed only after
the CBA was signed. At the time they are being required to join the Union, they
are both already regular rank and file employees of BPI. They belong to the
same bargaining unit being represented by the Union. They both enjoy benefits
that the Union was able to secure for them under the CBA. When they both
entered the employ of BPI, the CBA and the Union Shop Clause therein were
already in effect and neither of them had the opportunity to express their
preference for unionism or not. We see no cogent reason why the Union Shop
Clause should not be applied equally to these two types of new employees, for
they are undeniably similarly situated.18
We now come to the question: Does our affirmance of our ruling that former
FEBTC employees absorbed by BPI are covered by the Union Shop Clause
violate their right to security of tenure which we expressly upheld in this
Resolution? We answer in the negative.
It is the policy of the state to assure the right of workers to "security of tenure"
(Article XIII, Sec. 3 of the New Constitution, Section 9, Article II of the 1973
Constitution). The guarantee is an act of social justice. When a person has no
property, his job may possibly be his only possession or means of livelihood.
Therefore, he should be protected against any arbitrary deprivation of his job.
Article 280 of the Labor Code has construed security of tenure as meaning
that "the employer shall not terminate the services of an employee except
for a just cause or when authorized by" the Code. x x x (Emphasis supplied.)
Article 279 of the Labor Code ordains that "in cases of regular employment, the
employer shall not terminate the services of an employee except for a just cause
or when authorized by [Title I, Book Six of the Labor Code]." Admittedly, the
enforcement of a closed-shop or union security provision in the CBA as a
ground for termination finds no extension within any of the provisions
under Title I, Book Six of the Labor Code. Yet jurisprudence has
consistently recognized, thus: "It is State policy to promote unionism to
enable workers to negotiate with management on an even playing field and with
more persuasiveness than if they were to individually and separately bargain with
the employer. For this reason, the law has allowed stipulations for 'union shop'
and 'closed shop' as means of encouraging workers to join and support the union
of their choice in the protection of their rights and interests vis-a-vis the
employer."24 (Emphasis supplied.)
While respondent company may validly dismiss the employees expelled by the
union for disloyalty under the union security clause of the collective bargaining
agreement upon the recommendation by the union, this dismissal should not be
done hastily and summarily thereby eroding the employees' right to due process,
self-organization and security of tenure. The enforcement of union security
clauses is authorized by law provided such enforcement is not characterized by
arbitrariness, and always with due process. Even on the assumption that the
federation had valid grounds to expel the union officers, due process requires
that these union officers be accorded a separate hearing by respondent
company.
The twin requirements of notice and hearing constitute the essential elements of
procedural due process. The law requires the employer to furnish the employee
sought to be dismissed with two written notices before termination of employment
can be legally effected: (1) a written notice apprising the employee of the
particular acts or omissions for which his dismissal is sought in order to afford
him an opportunity to be heard and to defend himself with the assistance of
counsel, if he desires, and (2) a subsequent notice informing the employee of the
employer's decision to dismiss him. This procedure is mandatory and its absence
taints the dismissal with illegality.
Irrefragably, GMC cannot dispense with the requirements of notice and hearing
before dismissing Casio, et al. even when said dismissal is pursuant to the
closed shop provision in the CBA. The rights of an employee to be informed of
the charges against him and to reasonable opportunity to present his side in a
controversy with either the company or his own union are not wiped away by a
union security clause or a union shop clause in a collective bargaining
agreement. x x x26 (Emphases supplied.)
In light of the foregoing, we find it appropriate to state that, apart from the fresh
thirty (30)-day period from notice of finality of the Decision given to the affected
FEBTC employees to join the Union before the latter can request petitioner to
terminate the former’s employment, petitioner must still accord said employees
the twin requirements of notice and hearing on the possibility that they may have
other justifications for not joining the Union. Similar to our August 10, 2010
Decision, we reiterate that our ruling presupposes there has been no material
change in the situation of the parties in the interim.
(b) Aside from the thirty (30) days, counted from notice of finality of the
August 10, 2010 Decision, given to former FEBTC employees to join the
respondent, said employees shall be accorded full procedural due process
before their employment may be terminated.
G.R. No. 170112 April 30, 2008
DECISION
NACHURA, J.:
Before this Court is a petition for review on certiorari assailing the July 19, 2005
Decision1 of the Court of Appeals (CA) in CA-G.R. SP. No. 86868, and its
September 28, 2005 Resolution2 denying the motion for reconsideration.
Respondent Del Pilar Academy Employees Union (the UNION) is the certified
collective bargaining representative of teaching and non-teaching personnel of
petitioner Del Pilar Academy (DEL PILAR), an educational institution operating in
Imus, Cavite.
On September 15, 1994, the UNION and DEL PILAR entered into a Collective
Bargaining Agreement (CBA)3granting salary increase and other benefits to the
teaching and non-teaching staff. Among the salient provisions of the CBA are:
ARTICLE V
SALARY INCREASE
ARTICLE VI
SECTION 1. Every faculty member who has rendered at least six (6)
consecutive academic semester of service shall be entitled to the
11th month and 12th month pay as summer vacation leave with pay. They
may, however, be required to report [and] undergo briefings or seminars in
connection with their teaching assignments for the ensuing school year.
The UNION then assessed agency fees from non-union employees, and
requested DEL PILAR to deduct said assessment from the employees’ salaries
and wages. DEL PILAR, however, refused to effect deductions claiming that the
non-union employees were not amenable to it.
In September 1997, the UNION negotiated for the renewal of the CBA. DEL
PILAR, however, refused to renew the same unless the provision regarding
entitlement to two (2) months summer vacation leave with pay will be amended
by limiting the same to teachers, who have rendered at least three (3)
consecutive academic years of satisfactory service. The UNION objected to the
proposal claiming diminution of benefits. DEL PILAR refused to sign the CBA,
resulting in a deadlock. The UNION requested DEL PILAR to submit the case for
voluntary arbitration, but the latter allegedly refused, prompting the UNION to file
a case for unfair labor practice with the Labor Arbiter against DEL PILAR;
Eduardo Espejo, its president; and Eliseo Ocampo, Jr., chairman of the Board of
Trustees.
Traversing the complaint, DEL PILAR denied committing unfair labor practices
against the UNION. It justified the non-deduction of the agency fees by the
absence of individual check off authorization from the non-union employees. As
regards the proposal to amend the provision on summer vacation leave with pay,
DEL PILAR alleged that the proposal cannot be considered unfair for it was done
to make the provision of the CBA conformable to the DECS’ Manual of
Regulations for Private Schools.4
On October 2, 1998, Labor Arbiter Nieves V. De Castro rendered a
Decision, viz.:
Reviewing the records of this case and the law relative to the issues at
hand, we came to the conclusion that it was an error on [the] part of [DEL
PILAR] not to have collected agency fee due other workers who are non-
union members but are included in the bargaining unit being represented
by [the UNION]. True enough as was correctly quoted by [the UNION] Art.
248, to wit:
Anent the proposal to decrease the coverage of the 11th and 12th month
vacation with pay, we do not believe that such was done in bad faith but
rather in an honest attempt to make perfect procession following the
DECS’ Manuals. Moreso, it is of judicial notice that in the course of
negotiation, almost all provisions are up for grabs, amendments or change.
This is something normal in the course of a negotiation and does not
necessarily connote bad faith as each every one (sic) has the right to
negotiate reward or totally amend the provisions of the
contract/agreement.
All told while there was error on [the] part of [DEL PILAR] for the first issue,
[it] came through in the second. But as it is, we do not believe that a finding
of unfair labor practice can be had considering the lack of evidence on
record that said acts were done to undermine the union or stifle the
member’s right to self organization or that the [petitioners] were in bad
faith. If at all, it’s (sic) error may have been the result of a mistaken notion
that individual check-off authorization is needed for it to be able to validly
and legally deduct assessment especially after individual[s] concerned
registered their objection. On the other hand, it is not error to negotiate for
a better term in the CBA. So long as [the] parties will agree. It must be
noted that a CBA is a contract between labor and management and is not
simply a litany of benefits for labor. Moreso, for unfair labor practice to
prosper, there must be a clear showing of acts aimed at stifling the
worker’s right to self-organization. Mere allegations and mistake notions
would not suffice.
SO ORDERED.5
The UNION’s motion for reconsideration having been denied,7 it then went to the
CA via certiorari. On July 19, 2005, the CA rendered the assailed decision,
affirming with modification the resolutions of the NLRC. Like the Arbiter and the
NLRC, the CA upheld the UNION’s right to collect agency fees from non-union
employees, but did not adjudge DEL PILAR liable for unfair labor practice.
However, it ordered DEL PILAR to deduct agency fees from the salaries of non-
union employees.
SO ORDERED.8
DEL PILAR filed a motion for reconsideration of the decision, but the CA denied
the same on September 28, 2005.9
Before us, DEL PILAR impugns the CA Decision on the following grounds:
I. IN PROMULGATING THE CHALLENGED DECISION AND
RESOLUTION, THE HON. COURT OF APPEALS DISREGARDED THE
FACT THAT THE ANNUAL INCREASE IN THE SALARIES OF THE
EMPLOYEES WAS NOT A BENEFIT ARISING FROM A COLLECTIVE
BARGAINING AGREEMENT, BUT WAS MANDATED BY THE
DIRECTIVE OF A GOVERNMENTAL DEPARTMENT; and
The issue here boils down to whether or not the UNION is entitled to collect
agency fees from non-union members, and if so, whether an individual written
authorization is necessary for a valid check off.
The collection of agency fees in an amount equivalent to union dues and fees,
from employees who are not union members, is recognized by Article 248(e) of
the Labor Code, thus:
DEL PILAR admitted its failure to deduct the agency fees from the salaries of
non-union employees, but justifies the non-deduction by the absence of
individual written authorization. It posits that Article 248(e) is inapplicable
considering that its employees derived no benefits from the CBA. The annual
salary increase of its employee is a benefit mandated by law, and not derived
from the CBA. According to DEL PILAR, the Department of Education, Culture
and Sports (DECS) required all educational institutions to allocate at least 70% of
tuition fee increases for the salaries and other benefits of teaching and non-
teaching personnel; that even prior to the execution of the CBA in September
1994, DEL PILAR was already granting annual salary increases to its employees.
Besides, the non-union employees objected to the deduction; hence, a written
authorization is indispensable to effect a valid check off. DEL PILAR urges this
Court to reverse the CA ruling insofar as it ordered the deduction of agency fees
from the salaries of non-union employees, arguing that such conclusion proceeds
from a misplaced premise that the salary increase arose from the CBA.
Contrary to what DEL PILAR wants to portray, the grant of annual salary
increase is not the only provision in the CBA that benefited the non-union
employees. The UNION negotiated for other benefits, namely, limitations on
teaching assignments to 23 hours per week, additional compensation for
overload units or teaching assignments in excess of the 23 hour per week limit,
and payment of longevity pay. It also negotiated for entitlement to summer
vacation leave with pay for two (2) months for teaching staff who have rendered
six (6) consecutive semesters of service. For the non-teaching personnel, the
UNION worked for their entitlement to fifteen (15) days leave with pay.13 These
provisions in the CBA surely benefited the non-union employees, justifying the
collection of, and the UNION’s entitlement to, agency fees.
WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP No. 86868, are AFFIRMED.
G.R. No. 118506 April 18, 1997
KAPUNAN, J.:
The facts of the case at bar, culled from the conflicting versions of petitioner and
private respondent, are illustrative.
Petitioner Norma Mabeza contends that around the first week of May, 1991, she
and her co-employees at the Hotel Supreme in Baguio City were asked by the
hotel's management to sign an instrument attesting to the latter's compliance with
minimum wage and other labor standard provisions of law. 1 The instrument
provides: 2
JOINT AFFIDAVIT
2. That the said Hotel is separately operated from the Ivy's Grill and
Restaurant;
3. That we are all (8) employees in the hotel and assigned in each
respective shifts;
4. That we have no complaints against the management of the Hotel
Supreme as we are paid accordingly and that we are treated well.
(Sgd.) (Sgd.)
JONATHAN PICART JOSE DIZON
SUBSCRIBED AND SWORN to before me this 7th day of May, 1991, at Baguio
City, Philippines.
Petitioner signed the affidavit but refused to go to the City Prosecutor's Office to
swear to the veracity and contents of the affidavit as instructed by management.
The affidavit was nevertheless submitted on the same day to the Regional Office
of the Department of Labor and Employment in Baguio City.
As gleaned from the affidavit, the same was drawn by management for the sole
purpose of refuting findings of the Labor Inspector of DOLE (in an inspection of
respondent's establishment on February 2, 1991) apparently adverse to the
private respondent. 3
After she refused to proceed to the City Prosecutor's Office — on the same day
the affidavit was submitted to the Cordillera Regional Office of DOLE —
petitioner avers that she was ordered by the hotel management to turn over the
keys to her living quarters and to remove her belongings from the hotel
premises. 4 According to her, respondent strongly chided her for refusing to
proceed to the City Prosecutor's Office to attest to the affidavit. 5 She thereafter
reluctantly filed a leave of absence from her job which was denied by
management. When she attempted to return to work on May 10, 1991, the hotel's
cashier, Margarita Choy, informed her that she should not report to work and,
instead, continue with her unofficial leave of absence. Consequently, on May 13,
1991, three days after her attempt to return to work, petitioner filed a complaint
for illegal dismissal before the Arbitration Branch of the National Labor Relations
Commission — CAR Baguio City. In addition to her complaint for illegal
dismissal, she alleged underpayment of wages, non-payment of holiday pay,
service incentive leave pay, 13th month pay, night differential and other benefits.
The complaint was docketed as NLRC Case No. RAB-CAR-05-0198-91 and
assigned to Labor Arbiter Felipe P. Pati.
On May 14, 1993, Labor Arbiter Pati rendered a decision dismissing petitioner's
complaint on the ground of loss of confidence. His disquisitions in support of his
conclusion read as follows:
We agree.
It is settled that in termination cases the employer bears the burden of proof to
show that the dismissal is for just cause, the failure of which would mean that the
dismissal is not justified and the employee is entitled to reinstatement. 14
In the case at bar, the private respondent initially claimed that petitioner
abandoned her job when she failed to return to work on May 8, 1991.
Additionally, in order to strengthen his contention that there existed sufficient
cause for the termination of petitioner, he belatedly included a complaint for loss
of confidence, supporting this with charges that petitioner had stolen a blanket, a
bedsheet and two towels from the hotel. 15 Appended to his last complaint was a
suit for qualified theft filed with the Baguio City prosecutor's office.
From the evidence on record, it is crystal clear that the circumstances upon
which private respondent anchored his claim that petitioner "abandoned" her job
were not enough to constitute just cause to sanction the termination of her
services under Article 283 of the Labor Code. For abandonment to arise, there
must be concurrence of two things: 1) lack of intention to work; 16 and 2) the
presence of overt acts signifying the employee's intention not to work. 17
In the instant case, respondent does not dispute the fact that petitioner tried to
file a leave of absence when she learned that the hotel management was
displeased with her refusal to attest to the affidavit. The fact that she made this
attempt clearly indicates not an intention to abandon but an intention to return to
work after the period of her leave of absence, had it been granted, shall have
expired.
Furthermore, while absence from work for a prolonged period may suggest
abandonment in certain instances, mere absence of one or two days would not
be enough to sustain such a claim. The overt act (absence) ought
to unerringly point to the fact that the employee has no intention to return to
work, 18 which is patently not the case here. In fact, several days after she had
been advised to take an informal leave, petitioner tried to resume working with
the hotel, to no avail. It was only after she had been repeatedly rebuffed that she
filed a case for illegal dismissal. These acts militate against the private
respondent's claim that petitioner abandoned her job. As the Solicitor General in
his manifestation observed:
We now come to the second cause raised by private respondent to support his
contention that petitioner was validly dismissed from her job.
Loss of confidence as a just cause for dismissal was never intended to provide
employers with a blank check for terminating their employees. Such a vague, all-
encompassing pretext as loss of confidence, if unqualifiedly given the seal of
approval by this Court, could readily reduce to barren form the words of the
constitutional guarantee of security of tenure. Having this in mind, loss of
confidence should ideally apply only to cases involving employees occupying
positions of trust and confidence or to those situations where the employee is
routinely charged with the care and custody of the employer's money or property.
To the first class belong managerial employees, i.e., those vested with the
powers or prerogatives to lay down management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees or effectively
recommend such managerial actions; and to the second class belong cashiers,
auditors, property custodians, etc., or those who, in the normal and routine
exercise of their functions, regularly handle significant amounts of money or
property. Evidently, an ordinary chambermaid who has to sign out for linen and
other hotel property from the property custodian each day and who has to
account for each and every towel or bedsheet utilized by the hotel's guests at the
end of her shift would not fall under any of these two classes of employees for
which loss of confidence, if ably supported by evidence, would normally apply.
Illustrating this distinction, this Court in Marina Port Services,
Inc. vs. NLRC, 20 has stated that:
More importantly, we have repeatedly held that loss of confidence should not be
simulated in order to justify what would otherwise be, under the provisions of law,
an illegal dismissal. "It should not be used as a subterfuge for causes which are
illegal, improper and unjustified. It must be genuine, not a mere afterthought to
justify an earlier action taken in bad faith." 22
In the case at bar, the suspicious delay in private respondent's filing of qualified
theft charges against petitioner long after the latter exposed the hotel's scheme
(to avoid its obligations as employer under the Labor Code) by her act of filing
illegal dismissal charges against the private respondent would hardly warrant
serious consideration of loss of confidence as a valid ground for dismissal.
Notably, the Solicitor General has himself taken a position opposite the public
respondent and has observed that:
The pivotal question in any case where unfair labor practice on the part of the
employer is alleged is whether or not the employer has exerted pressure, in the
form of restraint, interference or coercion, against his employee's right to institute
concerted action for better terms and conditions of employment. Without doubt,
the act of compelling employees to sign an instrument indicating that the
employer observed labor standards provisions of law when he might have not,
together with the act of terminating or coercing those who refuse to cooperate
with the employer's scheme constitutes unfair labor practice. The first act clearly
preempts the right of the hotel's workers to seek better terms and conditions of
employment through concerted action.
We agree with the Solicitor General's observation in his manifestation that "[t]his
actuation . . . is analogous to the situation envisaged in paragraph (f) of Article
248 of the Labor Code" 24 which distinctly makes it an unfair labor practice "to
dismiss, discharge or otherwise prejudice or discriminate against an employee
for having given or being about to give testimony" 25 under the Labor Code. For in
not giving positive testimony in favor of her employer, petitioner had reserved not
only her right to dispute the claim and proffer evidence in support thereof but also
to work for better terms and conditions of employment.
For refusing to cooperate with the private respondent's scheme, petitioner was
obviously held up as an example to all of the hotel's employees, that they could
only cause trouble to management at great personal inconvenience. Implicit in
the act of petitioner's termination and the subsequent filing of charges against her
was the warning that they would not only be deprived of their means of livelihood,
but also possibly, their personal liberty.
This Court does not normally overturn findings and conclusions of quasi-judicial
agencies when the same are ably supported by the evidence on record.
However, where such conclusions are based on a misperception of facts or
where they patently fly in the face of reason and logic, we will not hesitate to set
aside those conclusions. Going into the issue of petitioner's money claims, we
find one more salient reason in this case to set things right: the labor arbiter's
evaluation of the money claims in this case incredibly ignores existing law and
jurisprudence on the matter. Its blatant one-sidedness simply raises the
suspicion that something more than the facts, the law and jurisprudence may
have influenced the decision at the level of the Arbiter.
Labor Arbiter Pati accepted hook, line and sinker the private respondent's bare
claim that the reason the monetary benefits received by petitioner between 1981
to 1987 were less than minimum wage was because petitioner did not factor in
the meals, lodging, electric consumption and water she received during the
period in her computations. 26Granting that meals and lodging were provided and
indeed constituted facilities, such facilities could not be deducted without the
employer complying first with certain legal requirements. Without satisfying these
requirements, the employer simply cannot deduct the value from the employee's
ages. First, proof must be shown that such facilities are customarily furnished by
the trade. Second, the provision of deductible facilities must be voluntarily
accepted in writing by the employee. Finally, facilities must be charged at fair and
reasonable value. 27
These requirements were not met in the instant case. Private respondent "failed
to present any company policy or guideline to show that the meal and lodging . . .
(are) part of the salary;" 28 he failed to provide proof of the employee's written
authorization; and, he failed to show how he arrived at the valuations. 29
Curiously, in the case at bench, the only valuations relied upon by the labor
arbiter in his decision were figures furnished by the private respondent's own
accountant, without corroborative evidence. On the pretext that records prior to
the July 16, 1990 earthquake were lost or destroyed, respondent failed to
produce payroll records, receipts and other relevant documents, where he could
have, as has been pointed out in the Solicitor General's manifestation, "secured
certified copies thereof from the nearest regional office of the Department of
Labor, the SSS or the BIR." 30
More significantly, the food and lodging, or the electricity and water consumed by
the petitioner were not facilities but supplements. A benefit or privilege granted to
an employee for the convenience of the employer is not a facility. The criterion in
making a distinction between the two not so much lies in the kind (food, lodging)
but the purpose. 31Considering, therefore, that hotel workers are required to work
different shifts and are expected to be available at various odd hours, their ready
availability is a necessary matter in the operations of a small hotel, such as the
private respondent's hotel.
However, the claims covering the period of October 1987 up to the time of filing
the case on May 13, 1988 are barred by prescription as P.D. 442 (as amended)
and its implementing rules limit all money claims arising out of employer-
employee relationship to three (3) years from the time the cause of action
accrues. 32
We depart from the settled rule that an employee who is unjustly dismissed from
work normally should be reinstated without loss of seniority rights and other
privileges. Owing to the strained relations between petitioner and private
respondent, allowing the former to return to her job would only subject her to
possible harassment and future embarrassment. In the instant case, separation
pay equivalent to one month's salary for every year of continuous service with the
private respondent would be proper, starting with her job at the Belfront Hotel.
In addition to separation pay, backwages are in order. Pursuant to R.A. 6715 and
our decision in Osmalik Bustamante, et al. vs. National Labor Relations
Commission, 33 petitioner is entitled to full backwages from the time of her illegal
dismissal up to the date of promulgation of this decision without qualification or
deduction.
Finally, in dismissal cases, the law requires that the employer must furnish the
employee sought to be terminated from employment with two written notices
before the same may be legally effected. The first is a written notice containing a
statement of the cause(s) for dismissal; the second is a notice informing the
employee of the employer's decision to terminate him stating the basis of the
dismissal. During the process leading to the second notice, the employer must
give the employee ample opportunity to be heard and defend himself, with the
assistance of counsel if he so desires.
Given the seriousness of the second cause (qualified theft) of the petitioner's
dismissal, it is noteworthy that the private respondent never even bothered to
inform petitioner of the charges against her. Neither was petitioner given the
opportunity to explain the loss of the articles. It was only almost two months after
petitioner had filed a complaint for illegal dismissal, as an afterthought, that the
loss was reported to the police and added as a supplemental answer to
petitioner's complaint. Clearly, the dismissal of petitioner without the benefit of
notice and hearing prior to her termination violated her constitutional right to due
process. Under the circumstance an award of One Thousand Pesos (P1,000.00)
on top of payment of the deficiency in wages and benefits for the period
aforestated would be proper.
WHEREFORE, premises considered, the RESOLUTION of the National Labor
Relations Commission dated April 24, 1994 is REVERSED and SET ASIDE, with
costs. For clarity, the economic benefits due the petitioner are hereby
summarized as follows:
1) Deficiency wages and the applicable ECOLA from May 13, 1988 up to the
date of petitioner's illegal dismissal;
2) Service incentive leave pay; night differential pay and 13th month pay for the
same period;
3) Separation pay equal to one month's salary for every year of petitioner's
continuous service with the private respondent starting with her job at the
Belfront Hotel;
5) P1,000.00.
G.R. No. 87700 June 13, 1990
MELENCIO-HERRERA, J.:
Respondent Judge of the Regional Trial Court of Pasig, Branch 166, is taken to task by petitioners in this special civil action for certiorari and
Prohibition for having issued the challenged Writ of Preliminary Injunction on 29 March 1989 in Civil Case No. 57055 of his Court entitled
"San Miguel Corporation vs. SMCEU-PTGWO, et als."
Petitioners' plea is that said Writ was issued without or in excess of jurisdiction
and with grave abuse of discretion, a labor dispute being involved. Private
respondent San Miguel Corporation (SanMig. for short), for its part, defends the
Writ on the ground of absence of any employer-employee relationship between it
and the contractual workers employed by the companies Lipercon Services, Inc.
(Lipercon) and D'Rite Service Enterprises (D'Rite), besides the fact that the
Union is bereft of personality to represent said workers for purposes of collective
bargaining. The Solicitor General agrees with the position of SanMig.
Sometime in 1983 and 1984, SanMig entered into contracts for merchandising
services with Lipercon and D'Rite (Annexes K and I, SanMig's Comment,
respectively). These companies are independent contractors duly licensed by the
Department of Labor and Employment (DOLE). SanMig entered into those
contracts to maintain its competitive position and in keeping with the imperatives
of efficiency, business expansion and diversity of its operation. In said contracts,
it was expressly understood and agreed that the workers employed by the
contractors were to be paid by the latter and that none of them were to be
deemed employees or agents of SanMig. There was to be no employer-
employee relation between the contractors and/or its workers, on the one hand,
and SanMig on the other.
Petitioner San Miguel Corporation Employees Union-PTWGO (the Union, for
brevity) is the duly authorized representative of the monthly paid rank-and-file
employees of SanMig with whom the latter executed a Collective Bargaining
Agreement (CBA) effective 1 July 1986 to 30 June 1989 (Annex A, SanMig's
Comment). Section 1 of their CBA specifically provides that "temporary,
probationary, or contract employees and workers are excluded from the
bargaining unit and, therefore, outside the scope of this Agreement."
On 12 January 1989 on the ground that it had failed to receive any favorable
response from SanMig, the Union filed a notice of strike for unfair labor practice,
CBA violations, and union busting (Annex D, Petition).
On 30 January 1989, the Union again filed a second notice of strike for unfair
labor practice (Annex F, Petition).
As in the first notice of strike. Conciliatory meetings were held on the second
notice. Subsequently, the two (2) notices of strike were consolidated and several
conciliation conferences were held to settle the dispute before the National
Conciliation and Mediation Board (NCMB) of DOLE (Annex G, Petition).
Beginning 14 February 1989 until 2 March 1989, series of pickets were staged by
Lipercon and D'Rite workers in various SMC plants and offices.
On 6 March 1989, SMC filed a verified Complaint for Injunction and Damages
before respondent Court to enjoin the Union from:
b. calling for and holding a strike vote, to compel plaintiff to hire the
employees or workers of LIPERCON and D'RITE;
c. inciting, instigating and/or inducing the employees or workers of
LIPERCON and D'RITE to demonstrate and/or picket at the plants
and offices of plaintiff within the bargaining unit referred to in the
CBA,...;
Respondent Court found the Complaint sufficient in form and substance and
issued a Temporary Restraining Order for the purpose of maintaining the status
quo, and set the application for Injunction for hearing.
After several hearings on SanMig's application for injunctive relief, where the
parties presented both testimonial and documentary evidence on 25 March 1989,
respondent Court issued the questioned Order (Annex A, Petition) granting the
application and enjoining the Union from Committing the acts complained
of, supra. Accordingly, on 29 March 1989, respondent Court issued the
corresponding Writ of Preliminary Injunction after SanMig had posted the
required bond of P100,000.00 to answer for whatever damages petitioners may
sustain by reason thereof.
Evidently, plaintiff has established its right to the relief demanded. (p.
21, Rollo)
After an exchange of pleadings, this Court, on 12 October 1989, gave due course
to the Petition and required the parties to submit their memoranda
simultaneously, the last of which was filed on 9 January 1990.
The focal issue for determination is whether or not respondent Court correctly
assumed jurisdiction over the present controversy and properly issued the Writ of
Preliminary Injunction to the resolution of that question, is the matter of whether,
or not the case at bar involves, or is in connection with, or relates to a labor
dispute. An affirmative answer would bring the case within the original and
exclusive jurisdiction of labor tribunals to the exclusion of the regular Courts.
Petitioners take the position that 'it is beyond dispute that the controversy in the
court a quo involves or arose out of a labor dispute and is directly connected or
interwoven with the cases pending with the NCMB-DOLE, and is thus beyond the
ambit of the public respondent's jurisdiction. That the acts complained of (i.e., the
mass concerted action of picketing and the reliefs prayed for by the private
respondent) are within the competence of labor tribunals, is beyond question"
(pp. 6-7, Petitioners' Memo).
C. Civil courts have the jurisdiction to enjoin the above because this
specie of strike does not arise out of a labor dispute, is an abuse of
right, and violates the employer's constitutional liberty to hire or not
to hire. (SanMig's Memorandum, pp. 475-476, Rollo).
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any
controversy or matter concerning terms and conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining,
changing, or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and
employee."
That a labor dispute, as defined by the law, does exist herein is evident. At
bottom, what the Union seeks is to regularize the status of the employees
contracted by Lipercon and D'Rite in effect, that they be absorbed into the
working unit of SanMig. This matter definitely dwells on the working relationship
between said employees vis-a-vis SanMig. Terms, tenure and conditions of their
employment and the arrangement of those terms are thus involved bringing the
matter within the purview of a labor dispute. Further, the Union also seeks to
represent those workers, who have signed up for Union membership, for the
purpose of collective bargaining. SanMig, for its part, resists that Union demand
on the ground that there is no employer-employee relationship between it and
those workers and because the demand violates the terms of their CBA. Obvious
then is that representation and association, for the purpose of negotiating the
conditions of employment are also involved. In fact, the injunction sought by
SanMig was precisely also to prevent such representation. Again, the matter of
representation falls within the scope of a labor dispute. Neither can it be denied
that the controversy below is directly connected with the labor dispute already
taken cognizance of by the NCMB-DOLE (NCMB-NCR- NS-01- 021-89; NCMB
NCR NS-01-093-83).
Whether or not the Union demands are valid; whether or not SanMig's contracts
with Lipercon and D'Rite constitute "labor-only" contracting and, therefore, a
regular employer-employee relationship may, in fact, be said to exist; whether or
not the Union can lawfully represent the workers of Lipercon and D'Rite in their
demands against SanMig in the light of the existing CBA; whether or not the
notice of strike was valid and the strike itself legal when it was allegedly
instigated to compel the employer to hire strangers outside the working unit; —
those are issues the resolution of which call for the application of labor laws, and
SanMig's cause's of action in the Court below are inextricably linked with those
issues.
The precedent in Layno vs. de la Cruz (G.R. No. L-29636, 30 April 1965, 13
SCRA 738) relied upon by SanMig is not controlling as in that case there was no
controversy over terms, tenure or conditions, of employment or the
representation of employees that called for the application of labor laws. In that
case, what the petitioning union demanded was not a change in working terms
and conditions, or the representation of the employees, but that its members be
hired as stevedores in the place of the members of a rival union, which
petitioners wanted discharged notwithstanding the existing contract of the
arrastre company with the latter union. Hence, the ruling therein, on the basis of
those facts unique to that case, that such a demand could hardly be considered a
labor dispute.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the
labor tribunals. As explicitly provided for in Article 217 of the Labor Code, prior to
its amendment by R.A. No. 6715 on 21 March 1989, since the suit below was
instituted on 6 March 1989, Labor Arbiters have original and exclusive jurisdiction
to hear and decide the following cases involving all workers including "1. unfair
labor practice cases; 2. those that workers may file involving wages, hours of
work and other terms and conditions of employment; ... and 5. cases arising from
any violation of Article 265 of this Code, including questions involving the legality
of striker and lockouts. ..." Article 217 lays down the plain command of the law.
The claim of SanMig that the action below is for damages under Articles 19, 20
and 21 of the Civil Code would not suffice to keep the case within the
jurisdictional boundaries of regular Courts. That claim for damages is interwoven
with a labor dispute existing between the parties and would have to be ventilated
before the administrative machinery established for the expeditious settlement of
those disputes. To allow the action filed below to prosper would bring about "split
jurisdiction" which is obnoxious to the orderly administration of justice (Philippine
Communications, Electronics and Electricity Workers Federation vs. Hon.
Nolasco, L-24984, 29 July 1968, 24 SCRA 321).
DECISION
QUISUMBING, J.:
Before us is a petition for certiorari assailing the decision1 dated July 19, 2000, of
the Court of Appeals in CA-G.R. SP No. 50383, which earlier reversed the
decision2 dated January 30, 1998 of the National Labor Relations Commission
(NLRC) in NLRC Case No. V-0112-94.
In its two plants located at Cebu City and Lapu-Lapu City, petitioner
General Milling Corporation (GMC) employed 190 workers. They were all
members of private respondent General Milling Corporation Independent
Labor Union (union, for brevity), a duly certified bargaining agent.
On April 28, 1989, GMC and the union concluded a collective bargaining
agreement (CBA) which included the issue of representation effective for a
term of three years. The CBA was effective for three years retroactive to
December 1, 1988. Hence, it would expire on November 30, 1991.
On November 29, 1991, a day before the expiration of the CBA, the union
sent GMC a proposed CBA, with a request that a counter-proposal be
submitted within ten (10) days.
On December 16, 1991, GMC wrote a letter to the union’s officers, Rito
Mangubat and Victor Lastimoso. The letter stated that it felt there was no
basis to negotiate with a union which no longer existed, but that
management was nonetheless always willing to dialogue with them on
matters of common concern and was open to suggestions on how the
company may improve its operations.
In answer, the union officers wrote a letter dated December 19, 1991
disclaiming any massive disaffiliation or resignation from the union and
submitted a manifesto, signed by its members, stating that they had not
withdrawn from the union.
Thus, the union filed, on July 2, 1992, a complaint against GMC with the NLRC,
Arbitration Division, Cebu City. The complaint alleged unfair labor practice on the
part of GMC for: (1) refusal to bargain collectively; (2) interference with the right
to self-organization; and (3) discrimination. The labor arbiter dismissed the case
with the recommendation that a petition for certification election be held to
determine if the union still enjoyed the support of the workers.law phi 1.nêt
On January 30, 1998, the NLRC set aside the labor arbiter’s decision. Citing
Article 253-A of the Labor Code, as amended by Rep. Act No. 6715,4 which fixed
the terms of a collective bargaining agreement, the NLRC ordered GMC to abide
by the CBA draft that the union proposed for a period of two (2) years beginning
December 1, 1991, the date when the original CBA ended, to November 30,
1993. The NLRC also ordered GMC to pay the attorney’s fees.5
In its decision, the NLRC pointed out that upon the effectivity of Rep. Act No.
6715, the duration of a CBA, insofar as the representation aspect is concerned,
is five (5) years which, in the case of GMC-Independent Labor Union was from
December 1, 1988 to November 30, 1993. All other provisions of the CBA are to
be renegotiated not later than three (3) years after its execution. Thus, the NLRC
held that respondent union remained as the exclusive bargaining agent with the
right to renegotiate the economic provisions of the CBA. Consequently, it was
unfair labor practice for GMC not to enter into negotiation with the union.
The NLRC likewise held that the individual letters of withdrawal from the union
submitted by 13 of its members from February to June 1993 confirmed the
pressure exerted by GMC on its employees to resign from the union. Thus, the
NLRC also found GMC guilty of unfair labor practice for interfering with the right
of its employees to self-organization.
With respect to the union’s claim of discrimination, the NLRC found the claim
unsupported by substantial evidence.
On GMC’s motion for reconsideration, the NLRC set aside its decision of January
30, 1998, through a resolution dated October 6, 1998. It found GMC’s doubts as
to the status of the union justified and the allegation of coercion exerted by GMC
on the union’s members to resign unfounded. Hence, the union filed a petition
for certiorari before the Court of Appeals. For failure of the union to attach the
required copies of pleadings and other documents and material portions of the
record to support the allegations in its petition, the CA dismissed the petition on
February 9, 1999. The same petition was subsequently filed by the union, this
time with the necessary documents. In its resolution dated April 26, 1999, the
appellate court treated the refiled petition as a motion for reconsideration and
gave the petition due course.
On July 19, 2000, the appellate court rendered a decision the dispositive portion
of which reads:
II
III
Thus, in the instant case, the principal issue for our determination is whether or
not the Court of Appeals acted with grave abuse of discretion amounting to lack
or excess of jurisdiction in (1) finding GMC guilty of unfair labor practice for
violating the duty to bargain collectively and/or interfering with the right of its
employees to self-organization, and (2) imposing upon GMC the draft CBA
proposed by the union for two years to begin from the expiration of the original
CBA. law phi1.nêt
On the first issue, Article 253-A of the Labor Code, as amended by Rep. Act No.
6715, states:
The law mandates that the representation provision of a CBA should last for five
years. The relation between labor and management should be undisturbed until
the last 60 days of the fifth year. Hence, it is indisputable that when the union
requested for a renegotiation of the economic terms of the CBA on November 29,
1991, it was still the certified collective bargaining agent of the workers, because
it was seeking said renegotiation within five (5) years from the date of effectivity
of the CBA on December 1, 1988. The union’s proposal was also submitted
within the prescribed 3-year period from the date of effectivity of the CBA, albeit
just before the last day of said period. It was obvious that GMC had no valid
reason to refuse to negotiate in good faith with the union. For refusing to send a
counter-proposal to the union and to bargain anew on the economic terms of the
CBA, the company committed an unfair labor practice under Article 248 of the
Labor Code, which provides that:
...
...
Article 252 of the Labor Code elucidates the meaning of the phrase "duty
to bargain collectively," thus:
We have held that the crucial question whether or not a party has met his
statutory duty to bargain in good faith typically turn$ on the facts of the
individual case.8 There is no per se test of good faith in bargaining.9Good
faith or bad faith is an inference to be drawn from the facts.10 The effect of
an employer’s or a union’s actions individually is not the test of good-faith
bargaining, but the impact of all such occasions or actions, considered as
a whole.11
Under Article 252 abovecited, both parties are required to perform their mutual
obligation to meet and convene promptly and expeditiously in good faith for the
purpose of negotiating an agreement. The union lived up to this obligation when
it presented proposals for a new CBA to GMC within three (3) years from the
effectivity of the original CBA. But GMC failed in its duty under Article 252. What
it did was to devise a flimsy excuse, by questioning the existence of the union
and the status of its membership to prevent any negotiation.
GMC’s failure to make a timely reply to the proposals presented by the union is
indicative of its utter lack of interest in bargaining with the union. Its excuse that it
felt the union no longer represented the workers, was mainly dilatory as it turned
out to be utterly baseless.
Failing to comply with the mandatory obligation to submit a reply to the union’s
proposals, GMC violated its duty to bargain collectively, making it liable for unfair
labor practice. Perforce, the Court of Appeals did not commit grave abuse of
discretion amounting to lack or excess of jurisdiction in finding that GMC is,
under the circumstances, guilty of unfair labor practice.
Did GMC interfere with the employees’ right to self-organization? The CA found
that the letters between February to June 1993 by 13 union members signifying
their resignation from the union clearly indicated that GMC exerted pressure on
its employees. The records show that GMC presented these letters to prove that
the union no longer enjoyed the support of the workers. The fact that the
resignations of the union members occurred during the pendency of the case
before the labor arbiter shows GMC’s desperate attempts to cast doubt on the
legitimate status of the union. We agree with the CA’s conclusion that the ill-
timed letters of resignation from the union members indicate that GMC had
interfered with the right of its employees to self-organization. Thus, we hold that
the appellate court did not commit grave abuse of discretion in finding GMC guilty
of unfair labor practice for interfering with the right of its employees to self-
organization.
Finally, did the CA gravely abuse its discretion when it imposed on GMC the draft
CBA proposed by the union for two years commencing from the expiration of the
original CBA?
The provision mandates the parties to keep the status quo while they are still in
the process of working out their respective proposal and counter proposal. The
general rule is that when a CBA already exists, its provision shall continue to
govern the relationship between the parties, until a new one is agreed upon. The
rule necessarily presupposes that all other things are equal. That is, that neither
party is guilty of bad faith. However, when one of the parties abuses this grace
period by purposely delaying the bargaining process, a departure from the
general rule is warranted.
In Kiok Loy vs. NLRC,13 we found that petitioner therein, Sweden Ice Cream
Plant, refused to submit any counter proposal to the CBA proposed by its
employees’ certified bargaining agent. We ruled that the former had thereby lost
its right to bargain the terms and conditions of the CBA. Thus, we did not hesitate
to impose on the erring company the CBA proposed by its employees’ union -
lock, stock and barrel. Our findings in Kiok Loy are similar to the facts in the
present case, to wit:
That being the said case, the petitioner may not validly assert that its
consent should be a primordial consideration in the bargaining process. By
its acts, no less than its action which bespeak its insincerity, it has forfeited
whatever rights it could have asserted as an employer.16
Applying the principle in the foregoing cases to the instant case, it would be
unfair to the union and its members if the terms and conditions contained in the
old CBA would continue to be imposed on GMC’s employees for the remaining
two (2) years of the CBA’s duration. We are not inclined to gratify GMC with an
extended term of the old CBA after it resorted to delaying tactics to prevent
negotiations. Since it was GMC which violated the duty to bargain collectively,
based on Kiok Loy and Divine Word University of Tacloban, it had lost its
statutory right to negotiate or renegotiate the terms and conditions of the draft
CBA proposed by the union.
We carefully note, however, that as strictly distinguished from the facts of this
case, there was no pre-existing CBA between the parties in Kiok Loy and Divine
Word University of Tacloban. Nonetheless, we deem it proper to apply in this
case the rationale of the doctrine in the said two cases. To rule otherwise would
be to allow GMC to have its cake and eat it too.
The findings of fact by the CA, affirming those of the NLRC as to the
reasonableness of the draft CBA proposed by the union should not be disturbed
since they are supported by substantial evidence. On this score, we see no
cogent reason to rule otherwise. Hence, we hold that the Court of Appeals did
not commit grave abuse of discretion amounting to lack or excess of jurisdiction
when it imposed on GMC, after it had committed unfair labor practice, the draft
CBA proposed by the union for the remaining two (2) years of the duration of the
original CBA. Fairness, equity, and social justice are best served in this case by
sustaining the appellate court’s decision on this issue.
WHEREFORE, the petition is DISMISSED and the assailed decision dated July
19, 2000, and the resolution dated October 26, 2000, of the Court of Appeals in
CA-G.R. SP No. 50383, are AFFIRMED. Costs against petitioner.
G.R. No. 186605 November 17, 2010
DECISION
MENDOZA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules
of Court filed by petitioner Central Azucarera De Bais Employees Union-National
Federation of Labor (CABEU-NFL) seeking to reverse and set aside: (1) the
September 26, 2008 Decision1 of the Court of Appeals (CA), in CA-G.R. SP No.
03238, which reversed the July 18, 2007 Decision2 and September 28, 2007
Resolution3 of the National Labor Relations
Commission (NLRC)and reinstated the July 13, 2006 Decision4 of the Labor
Arbiter (LA); and (2) its January 21, 2009 Resolution5denying the Motion for
Reconsideration of CABEU-NFL.
THE FACTS
On March 27, 2004, CAB responded with a counter-proposal7 to the effect that
the production bonus incentive and special production bonus and incentives be
maintained. In addition, respondent CAB agreed to execute a pro-rated increase
of wages every time the government would mandate an increase in the minimum
wage. CAB, however, did not agree to grant additional and separate Christmas
bonuses.
On May 21, 2004, CAB received an Amended Union Proposal8 sent by CABEU-
NFL reducing its previous demand regarding wages and bonuses. CAB,
however, maintained its position on the matter. Thus, the collective bargaining
negotiations resulted in a deadlock.
CAB replied through its June 14, 2005 Letter11 (letter-response) to NCMB
Regional Director of Dumaguete City Isidro Cepeda, which reads:
At the outset, it observed that the letter signed by Mr. Pablito Saguran who is no
longer an employee of the Central for he was one of those lawfully terminated
due to an authorized cause x x x.
More importantly, the declared purpose of the requested conciliation meeting has
already been rendered moot and academic because: (1) the Union which Mr.
Saguran purportedly represents has already lost its majority status by reason of
the disauthorization and withdrawal of support thereto by more than 90% of the
rank and file employees in the bargaining unit of Central sometime in January,
2005, and (2) the workers themselves, acting as principal, after disauthorizing the
previous agent CABEU-NFL have organized themselves into a new Union known
as Central Azucarera de Bais Employees Labor Association (CABELA) and after
obtaining their registration certificate and making due representation that it is a
duly organized union representing almost all the rank and file workers in the
Central, had concluded a new collective bargaining agreement with the Central
on April 21, 2005 in Dumaguete City. The aforesaid CBA had been duly ratified
by the rank and file workers constituting 91% of the collective bargaining unit x x
x.
Clearly, therefore, the request for further conciliation conference will serve no
lawful and practical purpose. In view of the foregoing, and for the sake of
continued industrial peace prevailing in the Central, we beseech the Honorable
Office to disregard the aforesaid request.
It appears that the NCMB failed to act on the letter-response of CAB. Neither did
it convene CAB and CABEU-NFL to continue the negotiations between them.
Reacting from the letter-response of CAB, CABEU-NFL filed a Complaint for
Unfair Labor Practice12 for the former’s refusal to bargain with it.
On July 13, 2006, the LA dismissed the complaint.13 Pertinent portions of the LA
decision read:
The procedure in the discharge of the duty to bargain collectively is provided for
in Article 250 of the Labor Code: (1) the party who desires to negotiate an
agreement shall serve a written notice upon the other party with a statement of
proposals; (2) the other party shall make a reply thereto not later than ten (10)
days from receipt of notice; (3) if the dispute is unsettled resulting in a deadlock,
the NCMB shall intervene upon the request or at its own initiative and call the
parties to conciliation Meeting x x x (4) if the NCMB fails to effect an agreement,
the Board shall exert all efforts to settle disputes amicably and encourage the
parties to submit their case to a voluntary arbitrator; (5) the parties may also go
on strike or declare a lockout as the case may be after complying with legal
requirements. Subject, of course, to the plenary power of the Secretary of Labor
and Employment to assume jurisdiction over the dispute or to certify the same to
the NLRC for compulsory arbitration.
In the case at bar, the record shows that respondent CAB replied to the
complainant Union’s CBA proposals with its own set of counterproposals x x x.
Likewise, respondent CAB responded to the Union’s subsequent
counterproposals x x x. Record further shows that respondent CAB participated
in a series of CBA negotiations conducted by the parties at the plant level as well
as in the conciliation/mediation proceedings conducted by the NCMB.
Unfortunately, both exercises resulted in a deadlock.
We do not agree that respondent CAB committed an unfair labor practice act in
questioning the capacity of Mr. Pablito Saguran to represent complainant union
in the CBA negotiations because Mr. Pablito Saguran was no longer an
employee of respondent CAB at that time having been separated from
employment on the ground of redundancy and having received the
corresponding separation benefits. x x x.
So also, we do not find respondent CAB guilty of unfair labor practice by its act of
writing the NCMB Director in a letter dated June 24, 2005, stating its legal
position on complainant’s request for further conciliation to the effect that since
almost [all] of the rank and file employees, the principals in a principal-agent
relationship, have withdrawn their support to the complainant union and that in
fact they have already organized themselves into a DOLE-registered labor union
known as CABELA, any further conciliation will serve no lawful and practical
purpose. x x x.
At this juncture, it was incumbent upon the NCMB to make a ruling on the
request of the complainant union as well as upon the corresponding comment of
respondent CAB. If the NCMB chose not to pursue further negotiation between
the parties, respondent CAB should not be faulted therefor. x x x.
Under the facts obtaining, when the conciliation/mediation by the NCMB has not
been officially concluded, we find the instant complaint for unfair labor practice
not only without merit but also premature.
SO ORDERED.
On appeal, the NLRC in its July 18, 2007 Decision14 reversed the LA’s decision
and found CAB guilty of unfair labor practice. The NLRC explained:
With respect to respondent’s observation that the request for conciliation meeting
was signed by one who is not eligible and authorized to represent any union with
the company since he is no longer an employee, suffice it to state that at the time
the request was made, such employee has questioned the validity of his
dismissal with then NLRC. X x x.
SO ORDERED.
CAB moved for a reconsideration but the motion was denied by the NLRC in its
resolution dated September 28, 2007.15
Unsatisfied, CAB elevated the matter to the CA by way of a petition for certiorari
under Rule 65 alleging grave abuse of discretion on the part of the NLRC in
reversing the LA decision and issuing the questioned resolution.
On September 26, 2008, the CA found CAB’s petition meritorious and reversed
the NLRC decision and resolution. The CA pointed out:
First. This Court has acquired jurisdiction over the person of private respondent
CABEU-NFL. Through its counsel of record, CABEU-NFL already filed its
extensive comment on the instant petition. Hence, it is now useless to contend
that it was denied notice of the same and the opportunity to be heard on it. x x x.
Second. Petitioner CAB was not shown to have violated the rule requiring parties
to certify in their initiatory pleadings against forum shopping. Private respondent
CABEU-NFL alleges in its comment that the two cases are pending before this
Court: CA-G.R. No. 03132 and CA-G.R. No. 03017 involving the same parties as
in the case at bar. Unfortunately, CABEU-NFL did not explain how the issues in
those pending cases are related to or similar to those involved in this proceeding.
x x x.
In the case at bar, private respondent CABEU-NFL failed in its burden of proof to
present substantial evidence to support the allegation of unfair labor practice.
The assailed Decision and Resolution of public respondent referred merely to
two (2) circumstances which allegedly support the conclusion that the
presumption of good faith had been rebutted and that bad faith was extant in
petitioner’s actions. To recall, these circumstances are: (a) the execution of a
supposed collective bargaining agreement with another labor union, CABELA;
and (b) CAB’s sending of the letter dated June 14, 2005 to NCMB seeking to call
off the collective bargaining negotiations. These, however, are not enough to
ascribe the very serious offense of unfair labor practice upon petitioner. x x x.
x x x petitioner CAB was not scuttling the ongoing negotiations towards a new
collective bargaining agreement. It was simply propounding a position to the
NCMB for the latter to rule on. That the negotiations did not push through was
not the result of CAB management’s intransigence because there was none – at
least so far as the case record confirms. There is nothing that establishes
petitioner’s predetermined resolve not to budge from an initial position – perhaps
stubbornness of some ambiguous sort but not the absence of good faith to
pursue collective bargaining. x x x.
SO ORDERED.
CABEU-NFL moved for a reconsideration but its motion was denied by the CA in
its Resolution dated January 21, 2009.16
ISSUES
In sum, the petition raises three (3) issues for the Court’s consideration which are
whether or not the CA erred: (1) in giving due course to the petition
for certiorari despite service of the copy of the petition to CABEU-NFL’s counsel
and not to itself ; (2) in giving due course to the petition for certiorari despite the
failure of CAB to indicate the address of CABEU-NFL in the petition; and (3) in
absolving CAB of unfair labor practice.
CABEU-NFL insists that the CA erred in giving due course to the petition
for certiorari because respondent CAB served a copy of its CA petition to
CABEU-NFL’s counsel and not to CABEU-NFL itself. CABEU-NFL, likewise,
harps on the failure of CAB to indicate CABEU-NFL’s full address in the said
petition as required in petitions for certiorari, citing Section 1, Rule 6520 in relation
to Section 3, Rule 46.21
In its Memorandum,24 CAB claims that service of the copy of the petition
for certiorari to CABEU-NFL’s counsel was sufficient. It vehemently denies its
alleged failure to indicate CABEU-NFL’s name and address in its petition. CAB
also stresses that CA-G.R. SP No. 033132 and CA-G.R. SP No. 03017 "were
initiated exclusively by members of CABEU and by CABEU itself, respectively,
and not by CAB."25 CAB further argues that there was no identity of issues or
causes of action between the two abovementioned cases and this case.
On the issue of unfair labor practice, CAB counters that in view of the
disassociation of more than 90% of rank-and-file workers from CABEU-NFL, it
was constrained to negotiate and conclude in good faith a new CBA with
CABELA, the newly established union by workers who disassociated from
CABEU-NFL. CAB emphasizes that it declined further negotiations with CABEU-
NFL in good faith because to continue with it would serve no practical purpose.
Considering that the NCMB has yet to resolve CAB’s query in its letter-response,
CAB was left without any choice but accede to the demands of CABELA. In
concluding a CBA with CABELA, CAB claims that it acted in the best interest of
the rank-and-file workers which belied bad faith.
THE COURT’S RULING
On the technical issues, CABEU-NFL’s insistence that service of the copy of the
CA petition should have been made to it, rather than to its counsel, is unavailing.
With respect to the alleged failure of CAB to indicate the address of CABEU-NFL
in the CA petition, it appears that CABEU-NFL is misleading the Court. A perusal
of the petition27 filed before the CA reveals that CAB indeed indicated both the
name28 and address29 of CABEU-NFL. Moreover, the indication in said petition by
CAB that CABEU-NFL could be served with court processes through its counsel
was substantial compliance with the Rules.30
In the case at bench, CABEU-NFL merely raised the fact of the pendency of CA-
G.R. SP No. 033132 and CA-G.R. SP No. 03017 in its comment on the petition
for certiorari32 filed before the CA without demonstrating any similarity in the
causes of action between the said cases and the present case. The CA, citing
the ruling in T’boli Agro-Industrial Development, Inc. v. Solilapsi33 as authority,
points out that:
This Court cannot take judicial notice of what CA-G.R. No. 03132 and CA-G.R.
No. 03017 involve because:
"As a general rule, courts are not authorized to take judicial notice in the
adjudication of cases pending before them of the contents of other cases even
when such cases have been tried or are pending in the same court and
notwithstanding the fact that both cases may have been tried or are actually
pending before the same judge. Courts may be required to take judicial notice of
the decisions of the appellate courts but not of the decisions of the coordinate
trial courts, or even of a decision or the facts involved in another case tried by the
same court itself, unless the parties introduce the same in evidence or the court,
as a matter of convenience, decides to do so. Besides, judicial notice of matters
which ought to be known to judges because of their judicial functions is only
discretionary upon the court. It is not mandatory."
In the absence of evidence to show that the issues involved in these cases are
the same, this Court cannot give credence to private respondent’s claim of forum
shopping.
The Court now proceeds to determine whether or not respondent CAB was guilty
of acts constituting unfair labor practice by refusing to bargain collectively.
The concept of unfair labor practice is provided in Article 247 of the Labor Code
which states:
Article 247. Concept of Unfair Labor Practice and Procedure for Prosecution
thereof. -- Unfair labor practices violate the constitutional right of workers and
employees to self-organization, are inimical to the legitimate interests of both
labor and management, including their right to bargain collectively and otherwise
deal with each other in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and stable labor-
management relations.
The Labor Code, likewise, enumerates the acts constituting unfair labor practices
of the employer, thus:
For a charge of unfair labor practice to prosper, it must be shown that CAB was
motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy, and, of course, that
social humiliation, wounded feelings or grave anxiety resulted x x x" in
suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEU-
NFL was no longer the representative of the workers.34 It just wanted to foster
industrial peace by bowing to the wishes of the overwhelming majority of its rank
and file workers and by negotiating and concluding in good faith a CBA with
CABELA."35 Such actions of CAB are nowhere tantamount to anti-unionism, the
evil sought to be punished in cases of unfair labor practices.
Furthermore, basic is the principle that good faith is presumed and he who
alleges bad faith has the duty to prove the same. By imputing bad faith to the
actuations of CAB, CABEU-NFL has the burden of proof to present substantial
evidence to support the allegation of unfair labor practice.36 Apparently, CABEU-
NFL refers only to the circumstances mentioned in the letter-response, namely,
the execution of the supposed CBA between CAB and CABELA and the request
to suspend the negotiations, to conclude that bad faith attended CAB’s actions.
The Court is of the view that CABEU-NFL, in simply relying on the said letter-
response, failed to substantiate its claim of unfair labor practice to rebut the
presumption of good faith.
Moreover, as correctly determined by the LA, the filing of the complaint for unfair
labor practice was premature inasmuch as the issue of collective bargaining
is still pending before the NCMB.
In the resolution of labor cases, this Court has always been guided by the State
policy enshrined in the Constitution that the rights of workers and the promotion
of their welfare shall be protected. The Court is, likewise, guided by the goal of
attaining industrial peace by the proper application of the law. Thus, it cannot
favor one party, be it labor or management, in arriving at a just solution to a
controversy if the party has no valid support to its claims. It is not within this
Court’s power to rule beyond the ambit of the law.
G.R. No. 167892 October 27, 2006
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the April 22, 2004 Decision1 of the
Court of Appeals in CA-G.R. SP No. 74519, which affirmed with modifications the
June 28, 2002 Resolution2 of the National Labor Relations Commission (NLRC)
in NLRC CN RAB IV 5-10035-98-1, and its April 15, 2005 Resolution3 denying
petitioner’s motion for reconsideration.
Petitioner St. John Colleges, Inc. (SJCI) is a domestic corporation which owns
and operates the St. John’s Academy (later renamed St. John Colleges) in
Calamba, Laguna. Prior to 1998, the Academy offered a secondary course only.
The high school then employed about 80 teaching and non-teaching personnel
who were members of the St. John Academy Faculty & Employees Union
(Union).
The Collective Bargaining Agreement (CBA) between SJCI and the Union was
set to expire on May 31, 1997. During the ensuing collective bargaining
negotiations, SJCI rejected all the proposals of the Union for an increase in
worker’s benefits. This resulted to a bargaining deadlock which led to the holding
of a valid strike by the Union on November 10, 1997. In order to end the strike,
on November 27, 1997, SJCI and the Union, through the efforts of the National
Conciliation and Mediation Board (NCMB), agreed to refer the labor dispute to
the Secretary of Labor and Employment (SOLE) for assumption of jurisdiction:
2. Parties shall submit their respective position paper within 10 days upon
the signing of this agreement and to be decided within two months.
4. Union shall lift the picket immediately and remove all obstruction and
return to work on Monday, December 1, 1997.
After which, the strike ended and classes resumed. Subsequently, the SOLE
issued an Order dated January 19, 1998 assuming jurisdiction over the labor
dispute pursuant to Article 263 of the Labor Code. The parties were required to
submit their respective position papers within ten (10) days from receipt of said
Order.
Pending resolution of the labor dispute before the SOLE, the Board of Directors
of SJCI approved on February 22, 1998 a resolution recommending the closure
of the high school which was approved by the stockholders on even date. The
Minutes5 of the stockholders’ meeting stated the reasons therefor, to wit:
The President, Mr. Rivera, informed the stockholders that the Board at its
meeting on February 15, 1998 unanimously approved to recommend to the
stockholders the closure of the school because of the irreconcilable
differences between the school management and the Academy’s Union
particularly the safety of our students and the financial aspect of the
ongoing CBA negotiations.
After due deliberations, and upon motion of Dr. Jose O. Juliano seconded
by Miss Eva Escalano, it was unanimously resolved, as it is hereby
resolved, that the Board of St. John Colleges, Inc. be authorized to decide
on the terms and conditions of closure, if such decision is made, to the
best interest of the stockholders, parents and students.6
Thereafter, SJCI informed the Department of Labor and Employment (DOLE),
Department of Education, Culture and Sports (DECS), parents, students and the
Union of the impending closure of the high school which took effect on March 31,
1998.
On May 19, 1998, SJCI filed a petition to declare the strike illegal before the
NLRC which was docketed as NLRC Case No. RAB-IV-5-10035-98-L. It claimed
that the strike was conducted in violation of the procedural requirements for
holding a valid strike under the Labor Code.
On May 21, 1998, the 25 employees filed a complaint for unfair labor practice
(ULP), illegal dismissal and non-payment of monetary benefits against SJCI
before the NLRC which was docketed as RAB-IV-5-10039-98-L. The Union
members alleged that the closure of the high school was done in bad faith in
order to get rid of the Union and render useless any decision of the SOLE on the
CBA deadlocked issues.
These two cases were then consolidated. On January 8, 1999, Labor Arbiter
Antonio R. Macam rendered a Decision7 dismissing the Union’s complaint for
ULP and illegal dismissal while granting SJCI’s petition to declare the strike
illegal coupled with a declaration of loss of employment status of the 25 Union
members involved in the strike.
On July 23, 1999, the SOLE denied SJCI’s motions to dismiss and certified the
CBA deadlock case to the NLRC. It ordered the consolidation of the CBA
deadlock case with the ULP, illegal dismissal, and illegal strike cases which were
then pending appeal before the NLRC.
On June 28, 2002, the NLRC rendered judgment reversing the decision of the
Labor Arbiter. It found SJCI guilty of ULP and illegal dismissal and ordered it to
reinstate the 25 employees to their former positions without loss of seniority
rights and other benefits, and with full backwages. It also required SJCI to pay
moral and exemplary damages, attorney’s fees, and two (2) months
summer/vacation pay. Moreover, it ruled that the mass actions conducted by the
25 employees on May 4, 1998 could not be considered as a strike since, by then,
the employer-employee relationship had already been terminated due to the
closure of the high school. Finally, it dismissed, without prejudice, the certified
case on the CBA deadlocked issues for failure of the parties to substantiate their
respective positions.
On appeal, the Court of Appeals, in its Decision dated April 22, 2004, affirmed
with modification the decision of the NLRC:
SO ORDERED.11
With the denial of its motion for reconsideration, SJCI interposed the instant
petition essentially raising two issues: (1) whether it is liable for ULP and illegal
dismissal when it closed down the high school on March 31, 1998 and (2)
whether the Union is liable for illegal strike due to the protest actions which its 25
members undertook within the high school’s perimeter on May 4, 1998.
Under Article 283 of the Labor Code, the following requisites must concur for a
valid closure of the business: (1) serving a written notice on the workers at least
one (1) month before the intended date thereof; (2) serving a notice with the
DOLE one month before the taking effect of the closure; (3) payment of
separation pay equivalent to one (1) month or at least one half (1/2) month pay
for every year of service, whichever is higher, with a fraction of at least six (6)
months to be considered as a whole year; and (4) cessation of the operation
must be bona fide.12 It is not disputed that the first two requisites were satisfied.
The third requisite would have been satisfied were it not for the refusal of the
herein private respondents to accept the separation compensation package. The
instant case, thus, revolves around the fourth requisite, i.e., whether SJCI closed
the high school in good faith.
Whether or not the closure of the high school was done in good faith is a
question of fact and is not reviewable by this Court in a petition for review
on certiorari save for exceptional circumstances. In fine, the finding of the NLRC,
which was affirmed by the Court of Appeals, that SJCI closed the high school in
bad faith is supported by substantial evidence and is, thus, binding on this Court.
Consequently, SJCI is liable for ULP and illegal dismissal.
The determination of whether SJCI acted in bad faith depends on the particular
facts as established by the evidence on record. Bad faith is, after all, an inference
which must be drawn from the peculiar circumstances of a case. The two
decisive factors in determining whether SJCI acted in bad faith are (1) the timing
of, and reasons for the closure of the high school, and (2) the timing of, and the
reasons for the subsequent opening of a college and elementary department,
and, ultimately, the reopening of the high school department by SJCI after only
one year from its closure.
Prior to the closure of the high school by SJCI, the parties agreed to refer the
1997 CBA deadlock to the SOLE for assumption of jurisdiction under Article 263
of the Labor Code. As a result, the strike ended and classes resumed. After the
SOLE assumed jurisdiction, it required the parties to submit their respective
position papers. However, instead of filing its position paper, SJCI closed its high
school, allegedly because of the "irreconcilable differences between the school
management and the Academy’s Union particularly the safety of our students
and the financial aspect of the ongoing CBA negotiations." Thereafter, SJCI
moved to dismiss the pending labor dispute with the SOLE contending that it had
become moot because of the closure. Nevertheless, a year after said closure,
SJCI reopened its high school and did not rehire the previously terminated
employees.
Under these circumstances, it is not difficult to discern that the closure was done
to defeat the parties’ agreement to refer the labor dispute to the SOLE; to
unilaterally end the bargaining deadlock; to render nugatory any decision of the
SOLE; and to circumvent the Union’s right to collective bargaining and its
members’ right to security of tenure. By admitting that the closure was due to
irreconcilable differences between the Union and school management,
specifically, the financial aspect of the ongoing CBA negotiations, SJCI in effect
admitted that it wanted to end the bargaining deadlock and eliminate the problem
of dealing with the demands of the Union. This is precisely what the Labor
Code abhors and punishes as unfair labor practice since the net effect is to
defeat the Union’s right to collective bargaining.
However, SJCI contends that these circumstances do not establish its bad faith
in closing down the high school. Rather, it claims that it was forced to close down
the high school due to alleged difficult labor problems that it encountered while
dealing with the Union since 1995, specifically, the Union’s illegal demands in
violation of R.A. 6728 or the "Government Assistance to Students and Teachers
in Private Education Act." Under R.A. 6728, the income from tuition fee increase
is to be used as follows: (a) 70% of the tuition fee shall go to the payment of
salaries, wages, allowances, and other benefits of teaching and non-teaching
personnel, and (b) 20% of the tuition fee increase shall go to the improvement or
modernization of the buildings, equipment, and other facilities as well as payment
of the cost of operations. However, sometime in 1995, SJCI claims that it was
forced to give-in to the demands of the Union by allocating 100% of the tuition
fee increase for teachers’ benefits even though the same was in violation of R.A.
6728 in order to end the on-going strike of the Union and avoid prolonged
disturbances of classes. Subsequently or during the school year 1996-1997,
SJCI claims that it obtained an approval from the DECS for a 30% tuition fee
increase, however, only 10% was implemented. Despite this, the Union persisted
in making illegal demands by filing a complaint before the DOLE claiming that
they were entitled to the unimplemented 20% tuition fee increase. Finally, during
the collective bargaining negotiations in 1997, the Union again made economic
demands in excess of the 70% of the tuition fee increase under R.A. 6728. As a
result, SJCI claims it had no choice but to refuse the Union’s demands which
thereafter led to the holding of a strike on November 10, 1998. It argues that the
Union’s alleged illegal demands was a valid justification for the closure of the
high school considering that it was financially incapable of meeting said demands
and that it would violate R.A. 6728 if it gave in to said demands which carried
corresponding penalties to be imposed by the DECS.
These alleged difficult labor problems merely show that SJCI and the Union had
disagreements regarding workers’ benefits which is normal in any business
establishment. That SJCI agreed to appropriate 100% of the tuition fee increase
to the workers’ benefits sometime in 1995 does not mean that it was helpless in
the face of the Union’s demands because neither party is obligated to
precipitately give in to the proposal of the other party during collective
bargaining.13 If SJCI found the Union’s demands excessive, its remedy under the
law is to refer the matter for voluntary or compulsory dispute resolution. Besides,
this incident which occurred in 1995, could hardly establish the good faith of SJCI
or justify the high school’s closure in 1998.
Anent the Union’s claim for the unimplemented 20% tuition fee increase in 1996,
suffice it to say that it is erroneous to rule on said issue since the same was
submitted before the Voluntary Arbitrator14 and is not on appeal before this
Court.15 Besides, by referring the labor dispute to the Voluntary Arbitrator, the
parties themselves acknowledged that there is a sufficient mechanism to resolve
the said dispute. Again, we fail to see how this alleged labor problem in 1996
shows the good faith of SJCI in closing the high school in 1998.
With respect to SJCI’s claim that during the 1997 CBA negotiations the Union
made illegal demands because they exceeded the 70% limitation set by R.A. No.
6728, it is important to note that the alleged illegality or excessiveness of the
Union’s demands were the issues to be resolved by the SOLE after the parties
agreed to refer the said labor dispute to the latter for assumption of jurisdiction.
As previously mentioned, the SOLE certified the case to the NLRC, which on
June 28, 2002, rendered a decision finding that there was insufficient
evidence to determine the reasonableness of the Union’s proposals. The NLRC
found that SJCI failed to establish that the Union’s demands were illegal or
excessive. A review of the records clearly shows that the Union submitted a
position paper detailing its demands in actual monetary terms. However, SJCI
failed to establish how and why these demands were in excess of the limitation
set by R.A. 6728. Up to this point in the proceedings, it has merely relied on its
self-serving statements that the Union’s demands were illegal and excessive.
There is no basis, therefore, to hold that the Union ever made illegal or excessive
demands.
At any rate, even assuming that the Union’s demands were illegal or excessive,
the important and crucial point is that these alleged illegal or excessive demands
did not justify the closure of the high school and do not, in any way, establish
SJCI’s good faith. The employer cannot unilaterally close its establishment on the
pretext that the demands of its employees are excessive. As already discussed,
neither party is obliged to give-in to the other’s excessive or unreasonable
demands during collective bargaining, and the remedy in such case is to refer the
dispute to the proper tribunal for resolution. This was what SJCI and the Union
did when they referred the 1997 CBA bargaining deadlock to the SOLE;
however, SJCI pre-empted the resolution of the dispute by closing the high
school. SJCI disregarded the whole dispute resolution mechanism and
undermined the Union’s right to collective bargaining when it closed down the
high school while the dispute was still pending with the SOLE.
The Labor Code does not authorize the employer to close down the
establishment on the ground of illegal or excessive demands of the Union.
Instead, aside from the remedy of submitting the dispute for voluntary or
compulsory arbitration, the employer may file a complaint for ULP against the
Union for bargaining in bad faith. If found guilty, this gives rise to civil and
criminal liabilities and allows the employer to implement a lock out, but not the
closure of the establishment resulting to the permanent loss of employment of
the whole workforce.
SJCI next argues that the Union unduly endangered the safety and well-being of
the students who joined the valid strike held on November 10, 1997, thus it
closed down the high school on March 31, 1998. It claims that the Union coerced
the students to join the protest actions to pressure SJCI to give-in to the
demands of the Union.
However, SJCI provided no evidence to substantiate these claims except for its
self-serving statements in its position paper before the Labor Arbiter and pictures
belatedly attached to the instant petition before this Court. However, the pictures
were never authenticated and, on its face, only show that some students
watched the Union members while they conducted their protest actions. More
importantly, it is not true, as SJCI claims, that the Union admitted that it coerced
the students to join the protest actions and recklessly placed the students in
harm’s way. In its Reply16 to SJCI’s position paper before the Labor Arbiter, the
Union categorically denied that it put the students in harm’s way or pressured
them to join the protest actions. Given this denial by the Union, it was incumbent
upon SJCI to prove that the students were actually harmed or put in harm’s way
and that the Union coerced them to join the protest actions. The reason for this is
that the employer carries the burden of proof to establish that the closure of the
business was done in good faith. In the instant case, SJCI had the burden of
proving that, indeed, the closure of the school was necessary to uphold the
safety and well-being of the students.
SJCI presented no evidence to show that the protest actions turned violent; that
the parents did not give their consent to their children who allegedly joined the
protest actions; that the Union did not take the necessary steps to protect some
of the students who allegedly joined the same; or that the Union forced or
pressured the said students to join the protest actions. Moreover, if the problem
was the endangerment of the students’ well-being due to the protest actions by
the Union, then the natural response would have been to immediately go after
the Union members who allegedly coerced the students to join the protest
actions and thereby endangered the students’ safety. But no such action appears
to have been undertaken by SJCI. There is even no showing that it prohibited its
students from joining the protest actions or informed the parents of the activities
of the students who allegedly joined the protest actions. This raises serious
doubts as to whether SJCI was really looking after the welfare of its students or
merely using them as a scapegoat to justify the closure of the school and thereby
get rid of the Union.
Even assuming arguendo that the safety and well-being of some of the students
who allegedly joined the protest actions were compromised, still, the closure was
done in bad faith because it was done long after the strike had ended. Thus,
there is no more danger to the students’ well-being posed by the strike to speak
of. It bears stressing that the closure was implemented on March 31, 1998 but
the risk to the safety of the students had long ceased to exist as early as
November 28, 1997 when the parties agreed to refer the labor dispute to the
SOLE, thus, betraying SJCI’s claim that it wanted to safeguard the interest of the
students.
Furthermore, if SJCI was after the interests of the students, then it should not
have closed the school because the parents and the students were vehemently
opposed to the same, as shown by the letter dated March 9, 1998 written by Mr.
Teofilo G. Mamplata, President of the Parents’ Association, and addressed to the
Secretary of DECS, to wit:
As per letters sent recently by the school Management to the teachers and
parents, notifying of its closure on March 31, 1998, as decided upon by its
Board of Trustees and Stockholders on February 22, 1998 no reasons
were stated to justify said decision and action which will definitely affect
adversely and to the detriment of the plight of parents, teachers, students
and other personnel of the school.
In this connection and due to the urgency of the matter, we hereby
reiterate our appeal with our prayer that the management and Board of
Trustees of St. John Academy of Calamba, Laguna, be stopped from
pursuing their most sudden, unfair, unfavorable and detrimental decision
and action, and if warranted, sanctions be imposed against the erring
party.17 (Italics supplied)
Along the same vein, the parents voiced out their strong objections to the
proposed closure of the school, to wit:
PAHAYAG NG PAGTUTOL
The petitioner urges this Court to believe that they closed down the school
out of their sheer concern for the students, some of whom have started to
sympathize and participate in the union’s cause.
We are further tempted to doubt the verity of the petitioner’s claim that in
deciding to shut down the school, it only had the welfare of its students in
mind. There is evidence on record which hints otherwise. Apparently, the
parents of the students were vehemently against the idea of closing down
the academy as this would be, as it later did prove, more detrimental to the
studentry. No less than Mr. Teofilo Mamplata, President of St. John
Academy Parents Association of Calamba expressed the groups’ aversion
against such move and even wrote a letter to the then Secretary of the
Department of Education seeking immediate intervention to enjoin the
school from closing. This is an indication that the parents were unanimous
in their sentiment that the shutdown would result in inconvenience and
displacement of the students who had already been halfway through
elementary school and high school. It turned out some were even forced to
pay higher tuition fees just so they would be admitted in other
academies.19 (Italics supplied)
To recapitulate, there is insufficient evidence to hold that the safety and well-
being of the students were endangered and/or compromised, and that the Union
was responsible therefor. Even assuming arguendo that the students’ safety and
well-being were jeopardized by the said protest actions, the alleged threat to the
students’ safety and well-being had long ceased by the time the high school was
closed. Moreover, the parents were vehemently opposed to the closure of the
school because there was no basis to claim that the students’ safety was at risk.
Taken together, these circumstances lead to the inescapable conclusion that
SJCI merely used the alleged safety and well-being of the students as a
subterfuge to justify its actions.
SJCI next contends that the subsequent reopening of the high school after only
one year from its closure did not show that the previous decision to close the
high school was tainted with bad faith because the reopening was done due to
the clamor of the high school’s former students and their parents. It claims that its
former students complained about the cramped classrooms in the schools where
they transferred.
First, the fact that after one year from the time it closed its high school, SJCI
opened a college and elementary department, and reopened its high school
department showed that it never intended to cease operating as an educational
institution. Second, there is evidence on record contesting the alleged reason of
SJCI for reopening the high school, i.e., that its former students and their parents
allegedly clamored for the reopening of the high school. In a letter20 dated
December 15, 2000 addressed to the NLRC, which has never been rebutted by
SJCI, Mr. Mamplata, stated that –
Para po sa inyong kabatiran xxx isinara nila ang paaralang ito dahil sa
mga nag-alsang guro.
Clearly, these pieces of evidence regarding the subsequent reopening of the high
school after only one year from its closure further show that the high school’s
closure was done in bad faith.
Lastly, SJCI asserts that the strike conducted by the 25 employees on May 4,
1998 was illegal for failure to take the necessary strike vote and give a notice of
strike. However, we agree with the findings of the NLRC and CA that the protest
actions of the Union cannot be considered a strike because, by then, the
employer-employee relationship has long ceased to exist because of the
previous closure of the high school on March 31, 1998.
In sum, the timing of, and the reasons for the closure of the high school and its
reopening after only one year from the time it was closed down, show that the
closure was done in bad faith for the purpose of circumventing the Union’s right
to collective bargaining and its members’ right to security of tenure.
Consequently, SJCI is liable for ULP and illegal dismissal.
WHEREFORE, the petition is DENIED. The April 22, 2004 Decision and April 15,
2005 Resolution of the Court Appeals in CA-G.R. SP No. 74519 are AFFIRMED.
G.R. No. 139940 September 19, 2006
DECISION
Subject of the present petition for certiorari are the Court of Appeals Resolution
of April 13, 19991 and Resolution of September 3, 19992 which dismissed
petitioners’ petition for certiorari for having been filed six days beyond the
reglementary period under Section 4, Rule 65 of the 1997 Rules of Civil
Procedure, as amended by Supreme Court En Banc Resolution dated July 21,
1998 reading:
If the petitioner had filed a motion for new trial or reconsideration in due
time after notice of said judgment, order or resolution, the period herein
fixed shall be interrupted. If the motion is denied, the aggrieved party
may file the petition within the remaining period, but which shall not be less
than five (5) days in any event, reckoned from notice of such denial. No
extension of time to file the petition shall be granted except for the most
compelling reason and in no case to exceed fifteen (15) days. (Emphasis
and underscoring supplied)
Petitioners, in the main, plead for the application of substantial justice over
procedural lapses, conformably to this Court’s pronouncements in several cases,
and a liberal construction of the Rules in order to promote its objective of
securing a just disposition of every action or proceeding.3
The record shows that the September 3, 1999 Resolution of the Court of Appeals
denying petitioners’ motion for reconsideration was received by them on
September 13, 1999. On September 27, 1999, petitioners filed a motion for 30-
day extension of time to file petition which this Court granted.4 On October 28,
1999, petitioners filed the present petition for certiorari.5 Doubtless, petitioners
could not have availed of such petition as a mere substitute for lost
appeal,6 hence, this Court treats it as one for review under Rule 45.
Indeed, Section 4 of Rule 65 of the 1997 Rules of Civil Procedure was amended
by the July 21, 1998 Resolution of this Court En Banc by adding to it as second
paragraph the above-quoted amendment.
SEC. 4. When and where petition filed. – The petition shall be filed not
later than sixty (60) days from notice of the judgment, order or resolution.
In case a motion for reconsideration or new trial is timely filed, whether
such motion is required or not, the sixty (60) day period shall
be counted from notice of the denial of said motion. (Emphasis and
underscoring supplied)
The rule is settled that remedial statutes or modes of procedure, which do not
create new rights or take away vested rights but only operate in furtherance of
the remedy or confirmation of rights already existing, do not come within the
purview of the general rule against the retroactive operation of statutes. They are
construed to be applicable to actions pending and undetermined at the time of
their passage, and are deemed retroactive in that sense and to that extent.
Hence, in a long line of cases,7 the new period under Section 4 of Rule 65 was
given retroactive application. Of course at the time the assailed Resolutions of
the appellate court were issued in 1999, Section 4 of Rule 65 had not yet been
amended by this Court’s Resolution in A.M. No. 00-2-03-SC.
There being no reason why Section 4 of Rule 65, as amended in 2000 by this
Court, may not be given retroactive application to petitioners’ petition, it now
gives said application. While, normally, a remand of the case to the appellate
court for further proceedings is done,8 this Court now opts to decide the petition
on the merits to forestall further delay in its disposition.
On December 12, 1997, the Arellano University Employees and Workers Union
(the Union), the exclusive bargaining representative of about 380 rank-and-file
employees of Arellano University, Inc. (the University), filed with the National
Conciliation and Mediation Board (NCMB) a Notice of Strike charging the
University with Unfair Labor Practice (ULP) as follows:
1. Interfering in union activities;
On March 11, 1998, the Regional Director of DOLE-NCR directed the Union
officers to call a general membership meeting to, among other things, render an
accounting of union funds amounting to P481,117.28 which were remitted per the
check-off statement.12
Also on March 11, 1998, then DOLE Secretary Cresenciano B. Trajano certified
the Notice of Strike for compulsory arbitration to the National Labor Relations
Commission (NLRC) which the latter assigned to Labor Arbiter Cristeta D.
Tamayo. The Labor Arbiter set the dispute for hearing/conference on July 3,
1998, July 17, 1998, and August 11, 1998. No settlement was reached by the
parties, however.13
On July 28, 1998, the University moved for the consolidation with the ULP charge
(NCMB-NCR-NS-12-520-97) the Interpleader14 it filed against the Union and
some of its members, docketed as NLRC NCR Case No. 00-02-02036-98 and
pending before Labor Arbiter Felipe T. Garduque II, and the Complaint the Union
filed for underpayment of wages arising from the change in the manner of
computation of salary of employees and non-payment of Sunday pay, docketed
as NLRC NCR Case No. 00-02-01422-98 and pending before Labor Arbiter
Ramon Valentin T. Reyes, both of which involve the same parties.15
Before the NLRC could act on the University’s motion for consolidation, DOLE
Secretary Bienvenido E. Laguesma, by Order16 of August 5, 1998, certified for
compulsory arbitration to the NLRC a second Notice of Strike filed by the Union
on July 16, 1998, docketed as NCMB-NCR-NS-07-277-98, charging the
University with the following:
By the same Order of August 5, 1998, the DOLE Secretary directed the strikers
to return to work within twenty-four (24) hours. The order was served upon the
Union on August 6, 1998, and the following day, August 7, 1998, at about 3:00
p.m., the Union lifted its strike.18
The strike staged by the Union on August 5-7, 1998 prompted the University to
file on August 24, 1998 a petition to declare the same illegal, docketed as NLRC-
NCR Case No. 00-08-06897-98, which was also consolidated with the other
cases.
Resolving the consolidated cases, the NLRC, by Decision19 of October 12, 1998,
disposed as follows:
The NLRC found that what triggered the strike was the Union’s suspicion that the
petition for audit of union funds was initiated by the University. The NLRC, citing
an Order of March 11, 1998 issued by the DOLE Regional Director, found the
therein petitioners to have initiated, out of their own volition, the filing of the
petition. It thus concluded that there was no factual basis to hold the University
guilty of interference in union activities.21
On the allegation of union busting, the NLRC ruled that the refusal of the
University to deduct penalties from the salaries of members of the Union who
failed to attend meetings was based on Article IV, Section 222 of the CBA vis-á-
vis Section 123 of the same Article which requires as condition for a valid checkoff
prior submission to the management of individual checkoff authorizations, a
requirement which was not met by the Union.24 Besides, the NLRC held, the law
mandates that the Union should not be "arbitrary, excessive or oppressive" in
imposing a fine.25
On the claim that the University had been contracting out work, the NLRC held
that the same was never raised during the conciliation meetings at the NCMB
level.26
Respecting the second Notice of Strike, the NLRC found that only the charges of
violation of the CBA for withholding union dues and death benefits, and the non-
implementation of the retirement plan, as approved by the BIR, were left for
resolution as the Union dropped the other issues raised therein after the NCMB
hearings on July 21, 1998 and July 28, 1998.27
Crediting the explanation of the University that its withholding of union dues and
death aid benefits was upon the written request of several union members
themselves, the NLRC held that no ULP was committed.
In NLRC NCR Case No. 00-02-02036-98, the NLRC ruled that the University
may not be held guilty of ULP for refusal to heed the demand of the Union that
salaries of its members be deducted for their failure to attend union meetings:
firstly, because the Union itself failed to meet the requirements provided for in
Sections 1 and 2, Article IV of the CBA; and secondly, an interpleader had been
filed by the University for the parties to litigate their claims before the
NLRC.29 The NLRC also ruled that the resolution calling for such deduction was
not valid as it was not even signed by the majority of Union officers and
circulated to the members.30
In NLRC NCR Case No. 00-08-06897-98 (the University’s petition to declare the
strike staged by the Union on August 5-7, 1998 illegal), the NLRC granted the
petition and declared the loss of employment status of all thestrikers for
knowingly defying the Return-to-Work Order of the DOLE Secretary dated
August 5, 1998, said Order having been served upon the union on August 6,
1998 but it was only on August 7, 1998, at about 3:00 p.m., that the strike was
lifted.31
In NLRC NCR Case No. 00-02-01422-98, the NLRC ruled that the University was
correct in using 314 days as divisor, instead of 365 days, in computing the
"equivalent daily rate"32 of pay of a worker.
The Union et al. (hereafter petitioners) filed a motion for reconsideration of the
NLRC decision which was denied by Resolution33 of January 20, 1999. Hence,
they elevated the decision to the Court of Appeals via petition for certiorari which
was, as stated early on, dismissed.
In the present petition, petitioners insist that the University violated the CBA by
withholding union dues and death benefits. The University counters that on the
request of Union members in light of their gripes against the Union and its
officers, it did withhold said dues and benefits which they deposited with the
DOLE where the parties could settle the issues among themselves.
The then prevailing Rules Implementing the Labor Code, Book V34, Rule XVIII
provided that
To constitute ULP, however, violations of the CBA must be gross. Gross violation
of the CBA, under Article 261 of the Labor Code, means flagrant and/or malicious
refusal to comply with the economic provisions thereof. Evidently, the University
can not be faulted for ULP as it in good faith merely heeded the above-said
request of Union members.
On the NLRC’s declaration of loss of employment status of the strikers, the
pertinent provision of Article 264 of the Labor Code provides:
Article 264.
xxxx
Under the immediately quoted provision, an ordinary striking worker may not be
declared to have lost his employment status by mere participation in an illegal
strike. There must be proof that he knowingly participated in the commission of
illegal acts during the strike. While the University adduced photographs36 showing
strikers picketing outside the university premises, it failed to identify who they
were. It thus failed to meet the "substantiality of evidence test"37 applicable in
dismissal cases.
With respect to the union officers, as already discussed, their mere participation
in the illegal strike warrants their dismissal.
WHEREFORE, the Court of Appeals Resolution of April 13, 1999 and Resolution
of September 3, 1999 are SET ASIDE.
The NLRC Decision of October 12, 1998 and Resolution of January 20, 1999
are AFFIRMED, with the MODIFICATION that the dismissal of petitioner-union
members MONICO CALMA, CONSTANCIO BAYHONAN, BERNARDO SABLE,
NESTOR BRINOSA, NANJI MACARAMPAT, EDUARDO FLORAGUE and
DIONY S. LUMANTA is SET ASIDE, and they are thus ordered REINSTATED
WITHOUT BACKWAGES. If their reinstatement is no longer possible, however,
they should be given SEPARATION PAY at the rate of One (1) Month pay for
every year of service.
G.R. No. L-39040 June 6, 1990
MEDIALDEA, J.:
This is a petition for review on certiorari seeking the reversal of the decision rendered by the defunct Court of Industrial Relations on January
21, 1974 adjudging the petitioner corporation guilty of unfair labor practice and ordering the reinstatement of and payment of backwages to
respondent Antonio Cruz.
On the following day, December 15, 1961, petitioner corporation, thru its
personnel manager, terminated the services of respondent Cruz allegedly on the
basis of the latter's "record and after careful analysis and deliberation."
Respondent's wife, Felicidad Cruz, who was also an employee of petitioner, was
likewise terminated. Thus, RUWU called a strike sometime during the first week
of January, 1962.
The records do not disclose the results of the consent election. Subsequently
however, respondent Cruz and his wife were both re-employed and reinstated by
petitioner corporation, thereby indicating the victory of RUWU-PTGWO in the
consent election.
On November 28, 1962 at around 11:00 p.m., within the company premises,
respondent Cruz approached three co-employees who are supervisors of the
company, namely, Camaguin, Dayadante and Gaspar. These persons contended
that respondent Cruz, who was under the influence of liquor, uttered the following
remarks to them: "Ikaw, Ikaw, Ikaw-mga hayop kayo. Bibigyan ko kayo ng isang
linggong taning sa buhay ninyo ipapapatay ko kayo." They also claim that
respondent Cruz had challenged another co-employee. Respondent and his
witnesses denied this charge and claimed that what the respondent actually said
to the three employees was: "Ikaw, Ikaw, Ikaw pare, alam kong matitigas kayo
rito sa compania, kayat ako'y nakikiusap, kung maaari pag-natuloy ang
nationwide strike bukas, makiisa kayo at gamitin ang tigas ninyo." Immediately
thereafter, the three employees went to the personnel officer of petitioner
corporation. On November 29, 1962, they executed an affidavit regarding the
incident.
The following day, on November 30, 1962, the general manager of petitioner
corporation placed respondent Cruz on preventive suspension effective
December 3, 1962 for threatening "the lives of four (4) employees" and for having
'been reported under the influence of liquor," both acts being "contrary to rules
and regulations."
Upon the request of respondent Cruz and PTGWO, the petitioner corporation
conducted a conference which was in the nature of an investigation of the
incident.
Respondent Cruz filed a complaint for unfair labor practice against petitioner
corporation with the Court of Industrial Relations. On January 21, 1974, the
respondent industrial court, while affirming the findings of the healing examiner,
rendered a decision, the dispositive portion of which, reads as follows:
Hence, this petition for review on certiorari with the petitioner assigning the
following errors:
II
III
Anent the first and second assigned errors, petitioner submits that the records of
the case, particularly the testimonies of respondent Cruz himself and his
witnesses, show that petitioner corporation did not interfere with or prevent the
union activities of its employees; that the former has even allowed or abetted
active unionism within the company; that the dismissal of respondent Cruz was
not impelled by reason of union participation of respondent Cruz but solely by his
infraction of company rules and regulations, specifically, serious threats against
the lives of three co-employees, challenging another to a fight and intoxication
while on duty, all of which clearly amounted to a dismissal for cause under the
Termination Pay Law, Rep. Act No. 1052, as amended.
On the other hand, the Court of Industrial Relations found from the surrounding
circumstances of the case, a valid and sufficient basis for the charge of unfair
labor practice against petitioner company. Said the respondent court:
We have perused the record and found that the totality of evidence as found by
respondent court supports the conclusion that respondent Cruz has been unjustly
dismissed by reason of his union activities. The charge by petitioner against
respondent Cruz for being under the influence of liquor on a certain date and for
having threatened the lives of his co-employees is too flimsy to merit serious
consideration. We have on record the undisputed facts that private respondent,
as president of RUWU, was known for his aggressive and militant union
activities; that he and his wife had been previously dismissed on the ground of
active participation in union affairs; that they were reemployed only pursuant to
the express terms of the Return-to-Work Agreement executed by petitioner
corporation and RUWU when the latter won in the consent election; that
respondent Cruz was dismissed again for the second time in the course of his
campaign among RUWU members to join the nationwide strike of PTGWO in
which RUWU is a member union.
It has previously been indicated that an employer may treat freely with an
employee and is not obliged to support his actions with a reason or purpose.
However, where the attendant circumstances, the history of the employer's past
conduct and like considerations, coupled with an intimate connection between
the employer's action and the union affiliations or activities of the particular
employee or employees taken as a whole raise a suspicion as to the motivation
for the employer's action, the failure of the employer to ascribe a valid reason
therefor may justify an inference that his unexplained conduct in respect of the
particular employee or employees was inspired by the latter's union membership
or activities (Rothenbergon Labor Relations, pp. 401-402, cited in San Miguel
Brewery, Inc., et al. v. Santos, et al., No. L-12682, August 31, 1961, 2 SCRA
1081).
Further, factual findings of the Court of Industrial Relations are conclusive in the
absence of a showing that the same have no support in the evidence on record.
This Court will not review said court's factual findings as long as the same are
supported by evidence. This is so because the industrial court is governed by the
rule of substantial evidence rather than by the rule of preponderance of evidence
as in ordinary civil cases (Sanchez v. Court of Industrial Relations, L-19000, July
31, 1963, 8 SCRA 654; Industrial Commercial Agricultural Workers Organization
v. Bautista, L-15639, April 30, 1963, 7 SCRA 907).
Anent the third assigned error, it is the judicial trend to fix a reasonable period for
the payment of backwages to avoid protracted delay in post judgment hearings to
prove earnings of the worker elsewhere during the period that he had not been
reinstated to his employment. In consonance with the rulings in many cases, and
in view of the circumstances and equity of the instant case, respondent Cruz
should be reinstated and granted backwages corresponding to a period of three
(3) years from the time he was dismissed on December 13, 1962, without
deduction for his earnings elsewhere during his lay-off and without qualification of
his backwages as thus fixed, that is, unqualified by any wage increases
(Bachrach Motor Co., Inc. v. Court of Industrial Relations, L-26136, October 30,
1978, 86 SCRA 27; L.R. Aguinaldo & Co., Inc. v. Court of Industrial Relations,
No. L-31909, April 5, 1978, 82 SCRA 309; Davao Free Workers Front v. Court of
Industrial Relations, L-29356, October 27, 1975, 67 SCRA 418).
ACCORDINGLY, the petition is hereby DENIED and the decision of the Court of
Industrial Relations dated January 21, 1974 is AFFIRMED with MODIFICATION
that petitioner is directed to reinstate respondent Antonio Cruz without loss of
seniority rights and with backwages for three (3) years from the time of dismissal,
without deduction and qualification. If reinstatement is no longer possible,
respondent Antonio Cruz should be awarded separation pay of one (1) month for
every year of service. With costs against petitioner.
G.R. No. L-31276 September 9, 1982
GUTIERREZ, JR., J:
The petitioner asks for the review of the Court of Industrial Relations' Order dated
September 14, 1968 and the Resolution of the court en banc dated March 7,
1969 in Case No. 3849-ULP entitled National Labor Union, complainant vs.
Everlasting Manufacturing and Ang Wo Long respondents.
1. Federico Reyes
2. Angelino Ureta
3. Joaquin Tapalla
4. Hermenegildo Ignacio
5. Carlito Belarmino
6. Aniano Molina
7. Nolasco de Pedro
8. Urbano Bernaba
9. Isidoro Belarmino
Several hearings were had and when the case was pending
decision, a 'Motion to Include Ang Wo Long as Party Respondent'
was filed on September 11, 1964, by counsel for petitioner union,
which motion was granted by this Court in its Order dated November
6, 1964. Upon being summoned, respondent Ang Wo Long, through
counsel, filed on January 13, 1965, his Answer which is substantially
similar to the one filed by respondent Everlasting Manufacturing.
After farther hearing, this case was submitted by the parties for
decision. (Decision, CIR, March 22, 1966, pp. 61-63, rollo).
On March 22, 1966, the respondent court through Associate Judge Amando C.
Bugayong rendered a decision the dispositive portion of which reads:
On September 14, 1968, the respondent court issued an Order the dispositive
portion of which reads:
There is no dispute over the circumstances of the dismissal of the twenty- one
(21) complaining workers from the respondent business establishment.
The twenty-one (21) complaining workers were members of the National Labor
Union, a legitimate labor organization. They were employed at the respondent
Everlasting Manufacturing, a business establishment which manufactured paper
cups, water cups, and other allied products. They were hired by Benito Sy
Estanislao who owned the said establishment.
On July 8, 1963, the Office of the Mayor, Caloocan City issued a business permit
to Ang Wo Long to operate the Everlasting Manufacturing.
On July 10, 1963, Ang Wo Long sent individual letters to the twenty-one (21)
complaining workers, with similar contents, quoted hereunder:
You will be notified if your services will again be needed. (See Exh.
"B").
On July 17, 1963, the petitioner union representing the twenty-one (21)
dismissed workers charged the respondent business establishment with unfair
labor practice before the respondent court on August 10, 1963 On July 20, 1963,
Ang Wo Long employed twenty-four (24) new workers in the Everlasting
Manufacturing.
On August 10, 1963, the acting prosecutor of the respondent court formally filed
a complaint on the alleged discriminatory dismissal of the twenty-one (21)
complaining workers against the Everlasting Manufacturing.
Petitioner union wants Us to set aside the questioned Order and Resolution en
banc dated September 14, 1968 and March 7, 1969 respectively and to reinstate
the March 22, 1966 decision finding Everlasting Manufacturing and Ang Wo Long
guilty of unfair labor practice. The petitioner states that the findings and
conclusions of the respondent court in the March 22, 1966 decision were
founded on substantial evidence whereas the findings and conclusions of the
respondent court in the later order and resolution were not founded upon
substantial evidence. Furthermore, no reason was given by the respondent court
for the March 22, 1966 decision's reversal according to the petitioner.
The respondent court in its March 22, 1966 decision found Everlasting
Manufacturing and Ang Wo Long guilty of unfair labor practice in the following
manner:
Respondent Ang Wo Long has not shown any just cause for
dispensing with the services of the twenty-one workers on July 8,
1963. From the circumstances, the conclusion becomes inescapable
that he dismissed the complainants in order to break the union and
do away with the existing collective bargaining contract which it has
obtained only after a strike and bargaining negotiations. (pp. 66-68,
rollo)
It can be readily seen that the respondent court's March 22, 'L966 decision was
based mainly on respondent Ang Wo Long's inconsistent testimony and the
circumstances surrounding his acquisition of respondent Everlasting
Manufacturing which according to the respondent court tended to show Ang Wo
Long's knowledge of the existence of the May 3, 1963 collective bargaining
contract.
On the other hand, the respondent court in the September 4, 1968 Order found
the same circumstances to be merely preparatory acts of Ang Wo Long before
he could begin to operate the respondent Everlasting Manufacturing and that
'here was no evidence on record which proved his knowledge of the May 3, 1963
collective bargaining contract. The Order was silent however, on the March 22,
1966 decision as regards the inconsistent testimony of Ang Wo Long.
The issue before Us boils down to whether or not the respondent court was
justified in completely over-turning its March 22, 1966 ruling on the liability of Ang
Wo Long under the May 3, 1963 collective bargaining contract.
The respondent court modified its decision and absolved Ang Wo Long of
responsibility for and liability under the May 3, 1963 collective bargaining contract
because of its finding that there was a lack of evidence which would show
knowledge not only of the CBA but of the existence of the union itself on the part
of Mr. Ang Wo Long.
Appreciation of facts and conclusions drawn from facts must be such as would
be acceptable to a reasonable mind. The reconsidered conclusions of the
respondent court not only fly against the dictates of reason and common sense
but are out of touch with the grounds of public policy implicit in the Industrial
Peace Act and in the constitutional mandate on protection to labor.
Under the facts are circumstances of this case, it is irrational if not specious to
assume that Mr. Ang bought a business lock, stock, and barrel without inquiring
into its labor-management situation and that his dismissal of all the union
members without retaining a few experienced workers and their replacement with
a completely new set of employees who were strangers to the company was
anything other than an attempt to rid the firm of unwanted union activity.
The former owner, Benito Estanislao alias Cha Wa, sold Everlasting
Manufacturing to Ang Wo Long on April 29, 1963 while CBA negotiations were
going on and about to be concluded. The firm had a recent history of labor
problems and the bargaining negotiations came about only after a strike.
According to the respondent court, the acts of Ang Wo Long — his filing an
application for registration with the Bureau of Commerce on April 21, 1963, his
securing the mayor's permit, and his other acts of management — were only acts
preparatory to taking over the firm and not acts indicating knowledge of union
activity and the CBA negotiations. We rule otherwise. Precisely because Mr. Ang
performed acts indicative of normal care and caution on the part of a man buying
a manufacturing firm, We rule that the same care and caution was also extended
to a more sensitive aspect of the business, one attracting the greatest degree of
concern and attention of any new owner, which was the relationship of the
workers to management, their willingness to cooperate with the owner, and their
productivity arising from harmonious relations. Benito Estanislao signed the CBA
no longer as owner but as "general manager." The new owner used the same
premises, the same business name, machineries, tools and implements and the
same officials and supervisors including the assistant manager, Mr. Tan Hoc The
only change was the replacement of the 21 union member with a completely new
set of employees hired from outside the firm. As stated by Judge Amando C.
Bugayong in the court's March 22,1966 decision, the respondent Ang Wo Long
did not show any just cause for dispensing with the services of all the 21 union
members. We agree with Judge Bugayong that "the conclusion becomes
inescapable that he (Mr. Ang) dismissed the complainants in order to break the
union and do away with the existing collective bargaining agreement which it has
obtained only after a strike and bargaining negotiations."
Another mystifying aspect of the questioned order and resolution was the placing
of full responsibility on the shoulders of Mr. Benito Estanislao whom the court
funny knew had already conveniently disappeared even as it absolved the only
person who could grant affirmative relief and whose liability had earlier been
determined to be founded on substantial evidence. The summons issued to
Benito Estanislao was returned by Ang Wo Long's counsel who stated that
Benito Estanislao was no longer at his former address. Summons had to be
effected through publication. The person found guilty of unfair labor practice did
not show up at the reopened hearings and as far as the records before US show,
had disappeared. The concatenation of circumstances clearly indicates the
participation of both Mr. Estanislao and Mr. Ang in the unfair labor practice.
Hence, Ang Wo Long should be jointly and severally liable with Benito S.
Estanislao for the payment of backwages to the complaining employees.
Considering practical considerations, among them the length of time that has
lapsed since the dismissal of the complaining employees and following Our
rulings in the cases of Mercury Drug Co., Inc., et al vs. CIP, et al. (56 SCRA,
694); Aguinaldo Co., Inc., et al. vs. CIR, et al (82 SCRA 309); Danao
Development Corporation vs. NLRC, et al. (81 SCRA 489); Monteverde, et al. vs.
CIR, et al. (79 SCRA 259); Insular Life Insurance Co., Ltd Employees
Association — NATU vs. Insular Life Assurance Co., Ltd (76 SCRA 50); People's
Bank and Trust Company, et al. vs. People's Bank and Trust Company
Employees Union et al (69 SCRA 10) and Liberty Cotton Mills Workers Union vs.
Liberty Cotton Mills, Inc., (92 SCRA 391), We grant three (3) years backwages
without deduction or qualification to the dismissed employees. Following the
same considerations and in fairness to Ang Wo Long, reinstatement of the
complaining employees should be made on the basis of the latter's physical
fitness for the respective jobs from which they were illegally ousted. (Mercury
Drug Co., Inc. vs. Court of Industrial Relations), (supra).
WHEREFORE, the petition is hereby GRANTED.
1) Ang Wo Long and Benito S. Estanislao are hereby ORDERED jointly and
severally to pay the complaining employees three (3) years backwages without
deduction or qualification.
DECISION
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP
No. 55634 dated December 29, 2000 and its resolution dated March 26, 2001.
The Court of Appeals reversed and set aside the decision of the National Labor
Relations Commission (NLRC) in NLRC NCR Case No. 4312-ULP which
affirmed the decision of the Labor Arbiter granting moral and exemplary damages
to petitioner Geronimo Q. Quadra in connection with his dismissal from the
service.
On November 19, 1966, the CIR issued its decision finding respondent PCSO
guilty of unfair labor practice for having committed discrimination against the
union and for having dismissed petitioner due to his union activities. It ordered
the reinstatement of petitioner to his former position with full backwages and with
all the rights and privileges pertaining to said position.1
Respondent PCSO complied with the decision of the CIR. But while it reinstated
petitioner to his former position and paid his backwages, it also filed with the
Supreme Court a petition for review on certiorari entitled "Philippine Charity
Sweepstakes Office, et al. v. The Association of Sweepstakes Staff Personnel, et
al." assailing the decision of the CIR in Case No. 4312-ULP. The petition was
docketed as G.R. No. L-27546.2
On March 16, 1967, during the pendency of the case in the Supreme Court,
petitioner filed with the CIR a "Petition for Damages." He prayed for moral and
exemplary damages in connection with Case No. 4312-ULP. He cited the
decision of the Supreme Court in Rheem of the Philippines, Inc., et al. v.
Ferrer, et al.3 where it upheld the jurisdiction of the CIR over claims for damages
incidental to an employee's dismissal.
Respondent PCSO moved to dismiss the petition for damages on the following
grounds: (1) the CIR has no jurisdiction to award moral and exemplary damages;
(2) the cause of action is barred by prior judgment, it appearing that two
complaints are brought for different parts of a single cause of action; and (3) the
petition states no valid cause of action.
The petition for damages and the motion to dismiss, however, remained pending
with the CIR until it was abolished and the NLRC was created. On April 25, 1980,
the Labor Arbiter rendered a decision awarding moral and exemplary damages to
petitioner in the amount of P1.6 million. The dispositive portion of the decision
stated:
The NLRC affirmed the decision of the Labor Arbiter,5 prompting respondent
PCSO to file a petition for certiorari with the Court of Appeals.
The Court of Appeals reversed the decision of the NLRC. It held that there was
no basis for the grant of moral and exemplary damages to petitioner as his
dismissal was not tainted with bad faith. It was the Civil Service Commission that
recommended petitioner's dismissal after conducting an investigation. It also held
that the petition claiming moral and exemplary damages filed by petitioner after
respondent PCSO had complied with the CIR decision of reinstatement and
backwages amounted to splitting of cause of action.6
Petitioner now seeks the Court to review the ruling of the Court of Appeals. He
basically argues:
First: The ruling of the Court of Appeals that the PCSO did not act in bad
faith when it dismissed the petitioner is contrary to the already final and
executory decision of the CIR dated November 1[9], 1966 finding the
PCSO guilty of bad faith and unfair labor practice in dismissing the
petitioner. The decision of the CIR was affirmed by the High Court in the
case of PCSO, et al. v. Geronimo Q. Quadra, et al., 115 SCRA 34. The
Court of Appeals has no jurisdiction to amend the final and executory
decision of November 1[9], 1966 of the CIR which was affirmed by the
High Court. Once a decision has become final [and] executory, it could no
longer be amended or altered.
Second: The ruling of the Court of Appeals that the claims for moral and
exemplary damages of the petitioner is allegedly "tantamount to splitting of
cause of action under Sec. 4, Rule 2 of the 1997 Rules of Civil Procedure"
is contrary to law. When petitioner filed with the CIR his complaint for
illegal dismissal and unfair labor practice, the prevailing law and
jurisprudence was that the CIR did not have jurisdiction to grant moral and
exemplary damages. Petitioner's claim for moral damages was filed with
the CIR in the same case by virtue of the ruling of the High Court in Rheem
v. Ferrer, 19 SCRA 130 holding that the CIR has jurisdiction to award
moral and exemplary damages arising out of illegal dismissal and unfair
labor practice.8
Upon the entire evidence as a whole (sic), the [c]ourt feels and believes
that complainant Quadra was discriminatorily dismissed by reason of his
militant union activities, not only as President of PCSEA, but also as
President of the ASSPS.10
For this reason, we find it proper in this case to impose moral and
exemplary damages on private respondent. x x x
On the second issue, we agree with petitioner that the filing of a petition for
damages before the CIR did not constitute splitting of cause of action under the
Revised Rules of Court. The Revised Rules of Court prohibits parties from
instituting more than one suit for a single cause of action. Splitting a cause of
action is the act of dividing a single cause of action, claim or demand into two or
more parts, and bringing suit for one of such parts only, intending to reserve the
rest for another separate action. The purpose of the rule is to avoid harassment
and vexation to the defendant and avoid multiplicity of suits.12
The prevailing rule at the time that the action for unfair labor practice and illegal
dismissal was filed and tried before the CIR was that said court had no
jurisdiction over claims for damages. Hence, petitioner, at that time, could not
raise the issue of damages in the proceedings. However, on January 27, 1967,
the Supreme Court rendered its ruling in Rheem of the Philippines, Inc., et al.
v. Ferrer, et al.13 upholding the jurisdiction of the CIR over claims for damages
incidental to an employee's illegal dismissal. Petitioner properly filed his claim for
damages after the declaration by the Court and before the ruling on their case
became final. Such filing could not be considered as splitting of cause of action.
SARMIENTO, J.:
The cases before the Court pit labor against management, in which, on not a few occasions, it is labor that has cause for complaint.
10. On April 30, 1980, the services of nine (9) more union members,
namely: Ernesto Tuason, Israel Vino, Pedro Santos, Juanita Suba,
Edilberto Sarmiento, Diosalino Pandan, Antonio Razon, Benjamin
Capiz and Jesus Sembrano, were terminated by private respondent
on the ground that its contract with the U.S. Air Force had expired.
The rune employees filed a complaint for illegal dismissal against
private respondents on June 2, 1980. docketed as R03-AB Case No.
663-80.
11. On May 9, 1980, private respondent filed with MOLE, Region III,
a Notice of Termination of Contract together with a list of employees
affected by the expiration of the contract, among them, the 39
individual petitioners herein.
13. After heating, Labor Arbiter Federico S. Bernardo who took over
the cases from Arbiter Palumbarit rendered a decision dated July 2,
1982, the dispositive portion of which reads:
I.
II.
III.
On the first issue, the petitioners submit that the motion for reconsideration,
treated subsequently as an appeal, 3 of the private respondent had been filed
beyond the ten-day period prescribed by the Labor Code, in the absence of any
statement thereon as to material dates. The respondent Commission ruled that it
was, on the strength of receipts in possession of the Labor Department
disclosing such dates and showing that said appeal had been seasonably filed.
As a matter of practice, and in connection with ordinary civil cases, this Court has
assumed a stance of liberality towards the application of the material data rule, if
it in be otherwise verified from other evidence that the appeal had been perfected
within the time prescribed. 4 We see no reason why we should hold otherwise as
far as labor cases are concerned. Accordingly, we yield to the respondent
Commission's finding that the e.g. Gochangco, Inc. had filed its appeal on time. It
may be further noted that the petitioners themselves can offer no proof, other
than vague inferences from circumstances, of the belated appeal they allege.
This is not to say, however, that such an appeal has judgment. The Solicitor
General himself urges that we grant that, petition and hence, reverse the
respondent Commission. But apart from such urgings, the records themselves
show that a reversal is in order.
We are convinced that the respondent company is indeed guilty of an unfair labor
practice. It is no coincidence that at the time said respondent issued its
suspension and termination orders, the petitioners were in the midst of a
certification election preliminary to a labor management conference, purportedly,
"to normalize employer-employee relations." 5 It was within the legal right of the
petitioners to do so, 6 the exercise of which was their sole prerogative, 7 and in
which management may not as a rule interfere. 8 In this connection, the
respondent company deserves our strongest condemnation for ignoring the
petitioners' request for permission for some time out to attend to the hearing of
their petition before the med-arbiter. It is not only an act of arrogance, but a
brazen interference as well with the employees right to self-organization, contrary
to the prohibition of the Labor Code against unfair labor practices. 9
But as if to add insult to injury, the company suspended the petitioners on the
ground of "abandonment of work" 10on February 27, 1980, the date on which,
apparently, the pre-election conference had been scheduled. (The petitioners
sought permission on February 26, 1980 while the suspension order was issued
on February 28, 1980.) What unfolds here is a clear effort by management to
punish the petitioners for their union activities.
What disturbs us even more, however, is the perplexing gullibility with which the
respondent National Labor Relations Commission would fall for such an
indefensible position. Said the Commission: "So, with their gate passes
confiscated, even if management will reinstate them, without the gate passes,
they cannot enter the US Clark Airforce Base and perform their jobs, for the gate
pass is a pre-requisite for their entrance for employment." 13 For surely, and as
we stated, the petitioners were dispossessed of those gate passes precisely
because of the suspension meted out against them. It is not the other way
around, as the Commission would have us behave, for the confiscation of such
passes would not furnish a ground for suspension. Reinstatement then would
have deprived the base gullibility guards any right to hold on to such passes any
further. In the absence of superior orders, mere base guards are bereft of any
discretion to act on such matters.
In finding the petitioners' suspension illegal, with more reason do we hold their
subsequent dismissal to be illegal. We are not persuaded by the respondent
firm's argument that final termination should be effected as the contract has
expired." 14 What impresses us is the Solicitor General's submission that the
petitioners were regular employees and as such, their tenure did not end with the
expiration of the contract. We quote:
NAMES
DATE POSITION
EMPLOYED
1. Cornelio Jan. 1976 Driver
Pangilinan
2. Leo Mar. 1977 Driver
Tropico
3. Olimpio Jan. 1977 Driver
Gumin
4. Juanita June l976 Driver
Suba
5. Rolando Oct. 1978 Driver
Santos
6. Ruben Jan. 1975 Packer
Buela
7. Odilon May 1975 Packer
Lising
8. Reynaldo May 1976 Packer
Dayrit
9. Rogelio Mar. 1977 Packer
Manguerra
10. Orlando May 1977 Packer
Nacu
11. Diosalino May 1977 Packer
Perdon
12. Ernesto June 1977 Packer
Galang
13. Orlando June l977 Packer
Pangilinan
14. Jesus May 1977 Packer
Sembrano
15. Renato May 1976 Packer
Castaneda
16. Edilberto Aug. 1977 Packer
Sarmiento
17, Eduardo Dec. 1977 Packer
Alegado
18. Benjamin June l978 Packer
Capiz
19. Antonio Nov. 1978 Packer
Razon
20. Edilberto May 1978 Packer
Bingcang
21. Ernesto June 1978 Packer
Santos
22. Benedicto Oct. 1978 Packer
Capio
23. Rufo May 1977 Packer
Bugayong
24. Ricardo Dec. 1978 Packer
S. Domingo
25. Teresito Mar. 1978 Packer
Cullarin
26. Israel May 1979 Packer
Vino
27. Ernesto Mar. 1979 Packer
Ramirez
28. Romeo S. Sept. 1979 Packer
Gina
29. Arnel Sept. 1979 Packer
Calflung
30. Pedro A. May 1979 Packer
Santos
31. Rodolfo Nov. 1978 Packer
Capitly
32. Sept. 1979 Packer
Buenaventura
B. Puno
33. Edilberto Nov. 1978 Packer
Quiambao
34. Fernando Jan. 1975 Checker
Lising
35. Ernesto Feb. 1975 Mechanic
M. Tuazon
36. Marcelo Jan. 1963 Mechanic
Lagansad
37. Marcelino May 1979 Mechanic
Valerio
38. Serafin Feb. 1979 Packer
Pawa
39. Jesus S. May 1977 Packer
Daquigan
40. Ismael May 1978 Packer 15
Cayanan
As regular employees, the petitioners' tenure are secure, and their dismissal
must be premised on a just cause. 16
We find none here. What we find, instead, are flimsy attempts by the respondent
company to discredit the person of the petitioners' counsel, or their officers, and
other resorts to argumenta ad hominem. 17
There is no merit in the claim that the petitioners' terms were coterminous with
the duration of the contract. There is nothing in the records that would show that
the petitioners were parties to that contract. It appears furthermore that the
petitioners 18 were in the employ of the respondent company long before that
contract was concluded. They were not contract workers whose work terms are
tied to the agreement, but were, rather, regular employees of their employer who
entered into that contract.
But even if dismissal were warranted, the same nonetheless faces our
disapproval in the absence of a proper clearance then required under the Labor
Code.19 It is true that efforts were undertaken to seek such a clearance, yet there
is no showing that it was issued. That still taints the dismissal with the vice of
illegality.
The Court likewise rejects the claims of an alleged waiver by the petitioners of
their economic demands, in the light of an alleged order issued by Labor Arbiter
Luciano Aquino in connection with another case(s) involving the same parties. (It
was Labor Arbiter Federico Bernardo who penned the unfair labor practice/illegal
dismissal case.) The Honorable Aquino's disposition reads:
The records show that a "Waiver of Claims, Rights and Interest" was
filed by above-named petitioners stating, among other things, that
said petitioners are waiving their claims, rights and interests against
the respondents.
With respect to the second issue, that is, whether or not the waiver
of rights and interests executed by Fernando do so, 6 The G Lising,
Odilon do so, 6 The G Lising, Jose C. Tiamzon, Ernesto Tuazon,
Pedro Santos, Ruben Buela, Eduardo Alegado, Estrael Vino,
Rogelio Manguerra, Edilberto Bingcang, Olimpio Gumin, Leo
Tropico, Orlando Nacu, Rodolfo T. Capitly and Juanito Suba, are
valid, the alleged president of complainant-appellee union Benigno
Navarro, Sr., contends that Id Atty. Solomon has no authority to
appear floor and in behalf of individual complainants-appellees who
waived their rights and interests in these cases since there was no
authority from him. Records, however, disclose that said Atty.
Solomon had been the attorney of record for complainants-appellees
since the inception of these cases, and, therefore, is authority to
represent them cannot be questioned- not even by Ministry. Navarro
who allegedly took over the presidency of complainant-appellee
union after the disappearance of the former president, Mr. Ficardo
Alconga, Sr. And besides, the waiver of rights and interests were
personally executed by the signatories therein and all that Atty.
Solomon did was to assist them. 21
We find this puzzling for clearly, Labor Arbiter Aquino's resolution refers to other
cases22 and not the instant unfair labor practice controversy. The Commission
cannot feign simple mistake for such a lapse. Wittingly or unwittingly, it had made
itself a Dawn of the respondent corporation or otherwise had yielded to its
influence. The Court rebukes Atty. Isagani M. Jungco counsel for the respondent
company, for his unbecoming act and the individual members of the Commission
itself, for besmirching the integrity of the Commission.
In any event, we have held that unfair labor practice cases are not, in view of the
public interest involved, subject to compromises. 23 Furthermore, these alleged
waivers do not appear to have been presented in the first instance. They cannot
be introduced for the first time on appeal.
We come, finally, to the respondent company's liability for backwages and for
emergency cost of living allowances (ECOLA). In its appeal, the company denies
any liability, pointing to "[r]epresentative samples of the documents evidencing
payment was likewise submitted due to the voluminous records which cannot be
all produced." 24 The Commission accepted this argument, noting that 'these
xerox copies of payment of allowances, were never spurned by complainants-
appellees." 25 The Solicitor General observes, on the other hand, that these
alleged documents were never presented at the hearing but surfaced only on
appeal. 26 Indeed, there is no reference in the Labor Arbiter's decision to these
documents, and apparently, the respondent firm entered the same in evidence at
the appeal level only. As we have declared, a party is barred from introducing
fresh matters at the appellate stage. Besides, and as the Solicitor General points
out, "the ECOLA awarded to petitioners in the decision of the Labor Arbiter
include only those that pertain to them from the time of their dismissal up to July
1, 1982 " 27 the date the Labor Arbiter ordered their reinstatement. 28 Accordingly,
we rule the respondent corporation liable for such unpaid claims.
Before Batas Blg. 70 29 was enacted into law, unfair labor practices were
considered administrative offenses, 30 and have been held akin to tort, 31 wherein
damages are payable. We therefore not only order herein the reinstatement of
the petitioners and the payment of backwages (including cost-of-living
allowances) to them, but impose as well moral and exemplary damages. With
respect to backwages, we hold the respondent e.g. Gochangco, Inc. liable, in line
with the recommendation of the Solicitor General and in accordance with
accepted practice, for backwages equivalent to three (3) years without
qualification or deduction. 32
As for moral damages, we hold the said respondent liable therefor under the
provisions of Article 2220 of the Civil Code providing for damages for "breaches
of contract where the defendant acted fraudulently or in bad faith." We deem just
and proper the sum of P5,000.00 each in favor of the terminated workers, in the
concept of such damages.
We likewise grant unto said workers another P5,000.00 each to answer for
exemplary damages based on the provisions of Articles 2229 and 2231 and/or
2232 of the Civil Code. For "act[ing] in gross and evident bad faith in refusing to
satisfy the [petitioners'] plainly valid, just and demandable claim[s] " 33 the
respondent firm is further condemned to pay attorney's fees. The Court considers
the total sum of P20,000.00 fair and reasonable.
If only for emphasis, the new Constitution considers "labor as a primary social
economic force." 34 As the conscience of the government, it is this Court's sworn
duty to ensure that none trifles with labor rights.
WHEREFORE, the petition is GRANTED. The decision of the public respondent,
the National Labor Relations Commission, is REVERSED and SET ASIDE.
Judgment is hereby rendered: