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employer.Furthermore, bear in mind that ULP is punishable with both civil and/or
criminal sanctions. As such, the party so alleging must necessarily prove it by
substantial evidence. The Union, as earlier noted, failed to do this. Bankard merely
validly exercised its management prerogative. Not shown to have acted maliciously
or arbitrarily, no act of ULP can be imputed against it.
-BOMC, which was created pursuant to Central Bank5 Circular No. 1388, Series of
1993 (CBP Circular No. 1388, 1993), and primarily engaged in providing and/or
handling support services for banks and other financial institutions, is a subsidiary
of the Bank of Philippine Islands (BPI) operating and functioning as an entirely
separate and distinct entity.
A service agreement between BPI and BOMC was initially implemented in BPIs
Metro Manila branches. In this agreement, BOMC undertook to provide services such
as check clearing, delivery of bank statements, fund transfers, card production,
operations accounting and control, and cash servicing, conformably with BSP
Circular No. 1388. Not a single BPI employee was displaced and those performing
the functions, which were transferred to BOMC, were given other assignments.
The Manila chapter of BPI Employees Union (BPIEU-Metro ManilaFUBU) then filed a
complaint for unfair labor practice (ULP).
-the service agreement was likewise implemented in Davao City. Later, a merger
between BPI and Far East Bank and Trust Company (FEBTC) took effect on April 10,
2000 with BPI as the surviving corporation. Thereafter, BPIs cashiering function and
FEBTCs cashiering, distribution and bookkeeping functions were handled by BOMC.
Consequently, twelve (12) former FEBTC employees were transferred to BOMC to
complete the latters service complement.
BPI Davaos rank and file collective bargaining agent, BPI Employees Union-Davao
City-FUBU (Union), objected to the transfer of the functions and the twelve (12)
personnel to BOMC contending that the functions rightfully belonged to the BPI
employees and that the Union was deprived of membership of former FEBTC
personnel who, by virtue of the merger, would have formed part of the bargaining
unit represented by the Union pursuant to its union shop provision in the CBA.7
The Union then filed a formal protest on June 14, 2000 addressed to BPI Vice
Presidents Claro M. Reyes and Cecil Conanan reiterating its objection. It requested
the BPI management to submit the BOMC issue to the grievance procedure under
the CBA, but BPI did not consider it as "grievable." Instead, BPI proposed a Labor
Management Conference (LMC) between the parties.
During the LMC, BPI invoked management prerogative stating that the creation of
the BOMC was to preserve more jobs and to designate it as an agency to place
employees where they were most needed. On the other hand, the Union charged
that BOMC undermined the existence of the union since it reduced or divided the
bargaining unit.
ISSUE: whether or not the act of BPI to outsource the cashiering, distribution and
bookkeeping functions to BOMC is in conformity with the law and the existing CBA.
HELD: It is to be emphasized that contracting out of services is not illegal
perse.1wphi1 It is an exercise of business judgment or management prerogative.
Absent proof that the management acted in a malicious or arbitrary manner, the
Court will not interfere with the exercise of judgment by an employer.32 In this case,
bad faith cannot be attributed to BPI because its actions were authorized by CBP
Circular No. 1388, Series of 199333 issued by the Monetary Board of the then
Central Bank of the Philippines (now Bangko Sentral ng Pilipinas). The circular
covered amendments in Book I of the Manual of Regulations for Banks and Other
Financial Intermediaries, particularly on the matter of bank service contracts. A
finding of ULP necessarily requires the alleging party to prove it with substantial
evidence. Unfortunately, the Union failed to discharge this burden.
Much has been said about the applicability of D.O. No. 10. Both the NLRC and the
CA agreed with BPI that the said order does not apply. With BPI, as a commercial
bank, its transactions are subject to the rules and regulations of the governing
agency which is the Bangko Sentral ng Pilipinas.34 The Union insists that D.O. No.
10 should prevail.
The Court is of the view, however, that there is no conflict between D.O. No. 10 and
CBP Circular No. 1388. In fact, they complement each other.
5. EUGENE S. ARABIT et al
JARDINE PACIFIC FINANCE, INC. (FORMERLY MB FINANCE)
-Petitioners were former regular employees of respondent Jardine Pacific Finance,
Inc. (formerly MB Finance) (Jardine). The petitioners were also officers and members
of MB Finance Employees Association-FFW Chapter (the Union), a legitimate labor
union and the sole exclusive bargaining agent of the employees of Jardine. The
table below shows the petitioners previously occupied positions, as well as their
total length of service with Jardine before their dismissal from employment.
-On the claim of financial losses, Jardine decided to reorganize and implement a
redundancy program among its employees. The petitioners were among those
affected by the redundancy program. Jardine thereafter hired contractual employees
to undertake the functions these employees used to perform.
-The Union filed a notice of strike with the National Conciliation and Mediation Board
(NCMB), questioning the termination of employment of the petitioners who were
also union officers. The Union alleged unfair labor practice on the part of Jardine, as
well as discrimination in the dismissal of its officers and members.
Negotiations ensued between the Union and Jardine under the auspices of the
NCMB, and both parties eventually reached an amicable settlement. In the
settlement, the petitioners accepted their redundancy pay without prejudice to their
right to question the legality of their dismissal with the NLRC. Jardine paid the
petitioners a separation package composed of their severance pay, plus their
grossed up transportation allowance.7
-the petitioners and the Union filed a complaint against Jardine with the NLRC for
illegal dismissal and unfair labor practice.
ISSUE: whether Jardine committed an unfair labor practice against the Union.
HELD: based on the guidelines set by the Court in the cases of Golden Thread and
Asian Alcohol, we find that at two levels, Jardine failed to set the required fair and
whether an employer has interfered with and coerced employees in the exercise of
their right to self-organization, that is, whether the employer has engaged in
conduct which, it may reasonably be said, tends to interfere with the free exercise
of employees rights; and that it is not necessary that there be direct evidence that
any employee was in fact intimidated or coerced by statements of threats of the
employer if there is a reasonable inference that anti-union conduct of the employer
does have an adverse effect on self-organization and collective bargaining. The
questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its
employees, to the exclusion of union members, before the scheduled certification
election; 2) the active campaign by the sales officer of petitioners against the union
prevailing as a bargaining agent during the field trip; 3) escorting its employees
after the field trip to the polling center; 4) the continuous hiring of subcontractors
performing respondents functions; 5) assigning union members to the Cabangan
site to work as grass cutters; and 6) the enforcement of work on a rotational basis
for union members, all reek of interference on the part of petitioners. Indubitably,
the various acts of petitioners, taken together, reasonably support an inference
that, indeed, such were all orchestrated to restrict respondents free exercise of
their right to self-organization. The Court is of the considered view that petitioners
undisputed actions prior and immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled in the affairs of its employees
in selecting their exclusive bargaining representative. In Holy Child Catholic School
v. Hon. Patricia Sto. Tomas, 17 the Court ruled that a certification election was the
sole concern of the workers, save when the employer itself had to file the petition x
x x, but even after such filing, its role in the certification process ceased and
became merely a bystander. Thus, petitioners had no business persuading and/or
assisting its employees in their legally protected independent process of selecting
their exclusive bargaining representative. The fact and peculiar timing of the field
trip sponsored by petitioners for its employees not affiliated with THS-GQ Union,
although a positive enticement, was undoubtedly extraneous influence designed to
impede respondents in their quest to be certified. This cannot be countenanced.
Not content with achieving a no union vote in the certification election, petitioners
launched a vindictive campaign against union members by assigning work on a
rotational basis while subcontractors performed the latters functions regularly.
Worse, some of the respondents were made to work as grass cutters in an effort to
dissuade them from further collective action. Again, this cannot be countenanced.
More importantly, petitioners' bare denial of some of the complained acts and
unacceptable explanations, a mere afte1ihought at best, cannot prevail over
respondents' detailed narration of the events that transpired. At this juncture, it
bears to emphasize that in labor cases, the quantum of proof necessary is
substantial evidence, 18 or that amount of relevant evidence as a reasonable mind
might accept as adequate to suppoti a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise. 19 In fine, mindful of the nature of
the charge of ULP, including its civil and/or criminal consequences, the Cou1i finds
that the NLRC, as correctly sustained by the CA, had sufficient factual and legal
bases to support its finding of ULP.