Atty.
Roland Marquez Labor Law 2: Case Digests Batch 5
UNFAIR LABOR PRACTICE
1. INSULAR LIFE UNION v. INSULAR LIFE
G.R. No. L-25291 | January 30, 1971
Tickler: Letters; Free Coffee and Movies; Bribe
Ratio: The act of an employer in notifying absent employees individually
during a strike following unproductive efforts at collective bargaining that the
plant would be operated the next day and that their jobs were open for them
should they want to come in has been held to be an unfair labor practice, as
an active interference with the right of collective bargaining through dealing
with the employees individually instead of through their collective bargaining
representatives. Indeed, it is an unfair labor practice for an employer
operating under a collective bargaining agreement to negotiate or to
attempt to negotiate with his employees individually in connection with
changes in the agreement. And the basis of the prohibition regarding
individual bargaining with the strikers is that although the union is on strike,
the employer is still under obligation to bargain with the union as the
employees’ bargaining representative.
Facts: The Insular Life Assurance Co., Ltd., Employees Association-NATU,
FGU Insurance Group Workers & Employees Association-NATU, and
Insular Life Building Employees Association-NATU (the Unions), while still
members of the Federation of Free Workers (FFW), entered into separate
collective bargaining agreements with the Insular Life Assurance Co., Ltd.
and the FGU Insurance Group (the Companies).
Through a letter, 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.
The negotiations, however, reached a deadlock on the issue of union shop,
as a result of which the Unions filed a notice of strike. Several conciliation
conferences were held wherein the conciliators urged the Companies to
make reply to the Unions’ proposals. However, the Companies did not
make any counter-proposals but, instead, insisted that the Unions first drop
their demand for union security, promising money benefits if this was done.
The Unions then dropped said demand and a date was set by the parties to
meet and discuss the remaining demands.
The parties then negotiated on the labor demands but with no satisfactory
result due to a stalemate on the matter of salary increases. Instead of giving
counter-proposals, the Companies presented facts and figures and
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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.
Subsequently, the Unions went on strike and picketed the offices of the
Insular Life Building at Plaza Moraga. The Companies through their acting
manager and president, the respondent Jose M. Olbes sent to each of the
strikers a letter saying that if any of the strikers would like to come back to
work, they may advise the nearest police officer or security guard of such
intention. The letter also included some benefits like taking meals within the
office, free coffee and occasional movies, payment of OT work in excess of
eight hours, etc. The Unions, however, continued on strike.
From the date the strike was called until it was called off, some
management men tried to break thru the Unions’ picket lines. 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. The CFI of Manila
subsequently issued 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 saying that the Companies remain
firm of their position and that the companies will continue to operate even
without the workers. However, it also stated that the Companies will be
welcoming them back should they choose to continue to work, provided
there are no criminal charges pending against them. The strikers were
given an ultimatum until June 2, 1958.
The criminal charges against the strikers, except for three, were dismissed.
At any rate, because of the issuance of the writ of preliminary injunction
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
against them as well as the ultimatum of the Companies, 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. 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. 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.
The CIR prosecutor filed a complaint for unfair labor practice against the
Companies. 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 benefits 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. The Companies denied all of these. The complaint of the Unions was
eventually dismissed for lack of merit, as well as the subsequent Motion for
Reconsideration. Hence, this petition.
Issue: Whether or not the Companies are guilty of ULP
Held: Yes.
1. The letters were directed to the striking employees individually without
being coursed through the Unions which were representing the employees
in the collective bargaining.
The act of an employer in notifying absent employees individually during a
strike following unproductive efforts at collective bargaining that the plant
would be operated the next day and that their jobs were open for them
should they want to come in has been held to be an unfair labor practice, as
an active interference with the right of collective bargaining through dealing
with the employees individually instead of through their collective bargaining
representatives. Indeed, it is an unfair labor practice for an employer
operating under a collective bargaining agreement to negotiate or to
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attempt to negotiate with his employees individually in connection with
changes in the agreement. And the basis of the prohibition regarding
individual bargaining with the strikers is that although the union is on strike,
the employer is still under obligation to bargain with the union as the
employees’ bargaining representative.
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.
The respondents contend that the injunction was the main cause why the
strikers returned to work and not the letters. This assertion is without merit.
The circumstance that the strikers later decided to return to work ostensibly
on account of the injunctive writ cannot alter the intrinsic quality of the
letters, 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.
The test of whether an employer has interfered with and coerced
employees within the is whether the employer has engaged in conduct
which it may reasonably be said tends to interfere with the free exercise of
employees’ rights under section 3 of the Act, and 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. Besides, the letters
should not be considered by themselves alone but should be read in the
light of the preceding and subsequent circumstances surrounding them.
The letters should be interpreted according to the "totality of conduct
doctrine," whereby the culpability of an employer’s remarks were to be
evaluated not only on the basis of their implicit implications, but were to be
appraised against the background of and in conjunction with collateral
circumstances. Under this ‘doctrine’ expressions of opinion by an employer
which, though innocent in themselves, frequently were held to be culpable
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
because of the circumstances under which they were uttered, the history of
the particular employer’s labor relations or anti-union bias or because of
their connection with an established collateral plan of coercion or
interference.
Verily, the actuations of the respondents before and after the issuance of
the letters yield the clear inference that the said letters formed of the
respondents’ scheme to preclude if not destroy unionism within them.
2. 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.
So is there an unfair labor practice where the employer, although
authorized by the Court of Industrial Relations to dismiss the employees
who participated in an illegal strike, dismissed only the leaders of the
strikers, such dismissal being evidence of discrimination against those
dismissed and constitution a waiver of the employer’s right to dismiss the
striking employees and a condonation of the fault committed by them.
It is noteworthy that — perhaps in an anticipatory effort to exculpate
themselves from charges of discrimination in the readmission of strikers
returning to work — the respondents delegated the power to readmit to a
committee. But the respondent Olbes had chosen Abella and Garcia to
screen the unionists reporting back to work. It is not difficult to imagine that
these two employees — having been involved in unpleasant incidents with
the picketers during the strike — were hostile to the strikers. Needless to
say, the mere act of placing in the hands of employees hostile to the
strikers the power of reinstatement, is a form of discrimination in rehiring.
3. The record shows that not a single dismissed striker was given the
opportunity to defend himself against the supposed charges against him. As
earlier mentioned, when the striking employees reported back for work on
June 2, 1358, the respondents refused to readmit them unless they first
secured the necessary clearances; but when all, except three, were able to
secure and subsequently present the required clearances, the respondents
still refused to take them back.
The respondents, however, admitted that the alleged "acts of misconduct"
attributed to the dismissed strikers were the same acts with which the said
strikers were charged before the fiscal’s office and the courts. But all these
charges except three were dropped or dismissed. Indeed, the individual
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cases of dismissed officers and members of the striking unions do not
indicate sufficient basis for dismissal.
4. Lastly, where the strike was induced and provoked by improper conduct
on the part of an employer amounting to an “unfair labor practice,” the
strikers are entitled to reinstatement with back pay.
Where the employers’ ‘unfair labor practice’ caused or contributed to the
strike or where the ‘lock-out’ by the employer constitutes an ‘unfair labor
practice,’ the employer cannot successfully urge as a defense that the
striking or lock-out employees’ position has been filled by replacement.
Under such circumstances, if no job sufficiently and satisfactorily
comparable to that previously held by the aggrieved employee can be
found, the employer must discharge the replacement employee, if
necessary, to restore the striking or locked-out worker to his old or
comparable position.
Case Digest: Binua, L.J.I.
2. Shell Oil Workers Union v. Shell Philippines
G.R. No. L-28607 | May 31, 1971
Tickler: “18 security guards”
Ratio: An unfair labor practice is committed by a labor union or its agent by its
refusal ‘to bargain collectively with the employer’. Collective bargaining does not
end with the execution of an agreement, being a continuous process, the duty to
bargain necessarily imposing on the parties the obligation to live up to the terms of
such a collective bargaining agreement if entered into, it is undeniable that non-
compliance therewith constitutes an unfair labor practice.
Facts: Respondent Shell Company of the Philippines dissolved its security
guard section, stationed at its Pandacan Installation, notwithstanding its
continuance and assured by an existing collective bargaining contract. Shell
Company transferred eighteen (18) security guards to its other department
and consequently hired a private security agency to undertake the work of
said security guards. This resulted in a strike called by petitioner Shell Oil
Workers’ Union (UNION), The President certified it to respondent Court of
Industrial Relations (CIR). The CIR declared the strike illegal primarily on
the ground that such dissolution was a valid exercise of a management
prerogative.
Petitioner alleged that the eighteen (18) security guards affected are part of
the bargaining unit and covered by the existing collective bargaining
contract, and as such, their transfers and eventual dismissals are illegal
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
being done in violation of the existing contract. It, therefore, prayed that said
security guards be reinstated with full back wages from the time of their
dismissal up to the time of their actual reinstatement.
As special and affirmative defenses, the Company maintained that in
contracting out the security service and redeploying the 18 security guards
affected, it was merely performing its legitimate prerogative to adopt the
most efficient and economical method of operation; that said guards were
transferred to other sections with increase, except for four (4) guards, in
rates of pay and with transfer bonus; that said action was motivated by
business consideration in line with past established practice and made after
notice to and discussion with the Union; that the 18 guards concerned were
dismissed for willfully refusing to obey the transfer order; and that the strike
staged by the Union is illegal.
Issue: WON the Company committed unfair labor practice in contracting
out its security service to an independent professional security agency and
reassigning the 18 guards to other sections of the Company
Held: YES. The Shell Company, in failing to manifest fealty to what was
stipulated in an existing collective bargaining contract, was guilty of an unfair labor
practice.  Ratio: Respondent company's act in dismissing the Petitioners, who then
An unfair labor practice is committed by a labor union or its agent by its refusal ‘to
bargain collectively with the employer’. Collective bargaining does not end with
the execution of an agreement, being a continuous process, the duty to bargain
necessarily imposing on the parties the obligation to live up to the terms of such a
collective bargaining agreement if entered into, it is undeniable that non-
compliance therewith constitutes an unfair labor practice.
It is to be admitted that the stand of Shell Company as to the scope of management
prerogative is not devoid of plausibility if it were not bound by what was stipulated.
The growth of industrial democracy fostered by the institution of collective
bargaining with the workers entitled to be represented by a union of their choice,
has no doubt contracted the sphere of what appertains solely to the employer. It
would be going too far to assert, however, that a decision on each and every aspect
of the productive process must be reached jointly by an agreement between labor
and management. Essentially, the freedom to manage the business remains with
management. It still has plenty of elbow room for making its wishes prevail. In
much the same way that labor unions may be expected to resist to the utmost what
they consider to be an unwelcome intrusion into their exclusive domain, they
cannot justly object to management equally being jealous of its prerogatives.
However, the existing collective bargaining contract running for three years
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constituted a bar to such a decision reached by management.
In July 1966, there was a joint consultation between it and the Union on the matter.
Nonetheless on August 26, 1966, a collective bargaining contract was entered into
which, as indicated above, did assure the continued existence of the security guard
section. The Shell Company did not have to agree to such a stipulation. Or it could
have reserved the right to effect a dissolution and reassign the guards. It did not do
so. Instead, when it decided to take such a step resulting in the strike, it would rely
primarily on provisions in the collective bargaining contract couched in general
terms, merely declaratory of certain management prerogatives. Considering the
circumstances of record, there can be no justification then for Shell Company’s
insistence on pushing through its project of such dissolution without thereby
incurring a violation of the collective bargaining agreement.
Case Digest: Bulong, J.A.S.
3. ROMEO DABUET, et. al. vs. ROCHE PHARMACEUTICALS
G.R. No. L-45402 April 30, 1987 PADILLA, J.:
constituted the remaining and entire officialdom of the Roche Products
Labor Union, after the union's president and vice-president had been earlier
dismissed and when the CBA in the company was about to be renegotiated,
was an unfair labor practice under Sec. 4(a) (1) of the Industrial Peace Act.
Their dismissal, under the circumstances, amounted to interference with,
and restraint or coercion of, the petitioners in the exercise of their right to
engage in concerted activities for their mutual aid and protection
Facts: On 1 March 1973, petitioners, who were officers of the Roche
Products Labor Union, the labor organization existing in the firm, and with
whom the respondent company had a CBA which was due for re-
negotiation that month, wrote the respondent company expressing the
grievances of the union and seeking a formal conference with management
regarding the previous dismissal of the union's president and vice-
president.
A meeting was accordingly set for 12 March 1973. At said meeting,
however, instead of discussing the problems affecting the labor union and
management, Mr. Eric Mentha, the company's general manager, allegedly
berated the petitioners for writing said letter and called the letter and the
person who prepared it as “stupid."
Feeling that he was the one alluded to, since he had prepared the letter,
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
counsel for the labor union filed a case for grave slander against Mr.
Mentha. The charge was based on the affidavit executed by the petitioners.
The company and Mentha, in turn, filed a complaint for perjury against
petitioners alleging that their affidavit contained false statements.
The respondent company, furthermore, construed the execution by
petitioners of the affidavit as an act of breach of trust and confidence and
inimical to the interest of the company, for which they were suspended.
Subsequently, the respondent company filed with the NLRC a petition for
clearance to terminate their employment. The petitioners filed an opposition
thereto and, at the same time, filed charges of unfair labor practice, union
busting, and harassment against the company, Eric Mentha, and Reynaldo
Formeloza, the company's Finance/Administrative Manager.
After due proceedings, the compulsory arbitrator found that the petitioners'
dismissal was without justifiable cause, but that there was no unfair labor
practice committed and directed that petitioners be paid separation pay.
On appeal, the NLRC agreed with the findings of the arbitrator that the
petitioners' dismissal was without just and valid cause. However, it
disagreed with the arbitrator on the relief granted. The NLRC ordered the
reinstatement of the petitioners with two (2) months salary as back wages.
Both parties appealed to the Secretary of Labor who set aside the decision
of the NLRC and entered another one ordering the payment of severance
pay only.
The petitioners appealed to the Office of the President, which rendered a
decision finding the respondents guilty of unfair labor practice and directing
the reinstatement of the petitioners with back wages from the time of their
suspension until actually reinstated, without loss of seniority rights. The
respondent company was, likewise, ordered to extend to the petitioners all
fringe benefits to which they are entitled had they not been dismissed.
However, upon motion by the respondent company, the OP later reversed
its previous decision and ruled that, while the petitioners' dismissal was not
for just and valid cause, no unfair labor practice had been committed.
Consequently, it directed that petitioners be paid only separation pay in an
amount double those awarded by the compulsory arbitrator and Secretary
of Labor.
Issues
1. Whether or not the respondent company, in terminating the
employment of the petitioners without just and lawful cause, committed
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an unfair labor practice.
2. Whether the Supreme Court has jurisdiction to take cognizance of the
instant petition.
Held
1. YES. The respondent company had committed unfair labor practice in
dismissing the petitioners without just and valid cause.
Where the letter written by the union addressed to management referred to
employee grievances and/or, labor-management issues, and the
employees concerned were all officers of the union, then seeking a
renegotiation of the CBA, there should be a recognition of such letter as an
act for the mutual aid, protection and benefit of the employees concerned.
This recognition, in turn, should extend to petitioners' execution of an
affidavit in support of the charge of slander against Eric Mentha for calling
the union's lawyer, who prepared the letter, and the contents thereof as
“stupid."
Breach of trust and confidence, the grounds alleged for herein petitioners'
dismissal, "must not be indiscriminately used as a shield to dismiss an
employee arbitrarily. For who can stop the employer from filing an the
charges in the books for the simple exercise of it, and then hide behind the
pretext of loss of confidence which can be proved by mere preponderance
of evidence." Besides, there is nothing in the record to show that the charge
of perjury filed by private respondents against the petitioners has prospered
in any conclusive manner.
Respondent company's act in dismissing the Petitioners, who then
constituted the remaining and entire officialdom of the Roche Products
Labor Union, after the union's president and vice-president had been earlier
dismissed and when the CBA in the company was about to be renegotiated,
was an unfair labor practice under Sec. 4(a) (1) of the Industrial Peace Act.
Their dismissal, under the circumstances, amounted to interference with,
and restraint or coercion of, the petitioners in the exercise of their right to
engage in concerted activities for their mutual aid and protection
As the respondent company was guilty of unfair labor practice,
reinstatement of the dismissed employees should follow as a matter of
right. It is an established rule that an employer who commits an unfair labor
practice may be required to reinstate, with full back wages, the workers
affected by such act, the amount not to exceed back wages for three (3)
years.
2. YES. The respondents claim that the Supreme Court has no jurisdiction
to take cognizance of the instant petition pursuant to Art. Art. 223 of the
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
Labor Code which provides that the Office of the President is the final
appellate authority within the adjudicative machinery for handling labor
disputes and no law, order or regulation provides for any appeal therefrom
to the Supreme Court.
The Court, in the exercise of its power of judicial review, may review
decisions of the Office of the President on questions of law and jurisdiction,
when properly raised. This does not mean judicial supremacy over the
Office of the President but the performance by this Court of a duty
specifically enjoined upon it by the Constitution, as part of a system of
checks and balances.
Case Digest: Cabaña, P.M.H.
4. Wise and Co., Inc. v. Wise & Co., Inc. Employees Union-NATU and
Hon. Bienvenido G. Laguesma, in his capacity as voluntary Arbitrator
G.R. No. 87672, October 13, 1989
Ratio: Discrimination per se is not unlawful. There can be no discrimination
where the employees concerned are not similarly situated. Respondent union
cannot claim that there is grave abuse of discretion by the petitioner in extending
the benefits of profit sharing to the non-union employees as they are two (2) groups
not similarly situated. These non-union employees are not covered by the CBA.
They do not derive and enjoy the benefits under the CBA.
Facts: On April 3, 1987, Wise and Co., Inc. issued a memorandum circular
introducing a profit-sharing scheme for its managers and supervisors the initial
distribution of which was to take effect March 31, 1988.
On July 3, 1987, respondent union wrote to petitioner through its president, asking
for participation in this scheme, which was however denied by petitioner on the
ground that it had to adhere strictly to the CBA.
In the meantime, talks were underway for early negotiation by the parties of the
CBA which was due to expire on April 30, 1988. The negotiation thus begun
earlier than the freedom period.
Petitioner advised respondent union in writing that they were prepared to consider
including the employees covered by the CBA in the profit-sharing scheme
beginning the year 1987 provided that the ongoing negotiations were concluded
prior to December 1987. However, the CBA negotiations reached a deadlock on the
issue of the scope of the bargaining unit. Conciliation efforts 1988 were made but
no settlement was reached.
On March 30, 1988, petitioner distributed the profit-sharing benefit not only to
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managers and supervisors but also to all other rank and file employees not covered
by the CBA, which caused the respondent union to file a notice of strike alleging
that petitioner was guilty of unfair labor practice because the union members were
discriminated against in the grant of the profit sharing benefits.
Consequently, management refused to proceed with the CBA negotiations unless
the last notice of strike was first resolved. The union agreed to postpone
discussions on the profit-sharing demand until a new CBA was concluded. After a
series of conciliation conferences, the parties agreed to settle the dispute through
voluntary arbitration. On March 20, 1989 the voluntary arbitrator issued an award
ordering petitioner to likewise extend the benefits of the 1987 profit-sharing
scheme to the union members.
Issue: Whether the grant by management of profit-sharing benefits to its
non-union member employees is discriminatory against its workers who are
union members.
Held: NO. Under the CBA between the parties that was in force and effect
from May 1, 1985 to April 30, 1988 it was agreed that the "bargaining unit"
covered by the CBA "consists of all regular or permanent employees, below
the rank of assistant supervisor." Also expressly excluded from the term
"appropriate bargaining unit" are all regular rank and file employees in the
office of the president, vice-president, and the other offices of the company
— personnel office, security office, corporate affairs office, accounting and
treasury department.
It is to this class of employees who were excluded in the "bargaining
unit" and who do not derive benefits from the CBA that the profit-
sharing privilege was extended by petitioner.
There can be no discrimination committed by petitioner thereby as the
situation of the union employees are different and distinct from the non-
union employees. Indeed, discrimination per se is not unlawful. There can
be no discrimination where the employees concerned are not similarly
situated.
Respondent union cannot claim that there is grave abuse of discretion by
the petitioner in extending the benefits of profit sharing to the non-union
employees as they are two (2) groups not similarly situated. These non-
union employees are not covered by the CBA. They do not derive and enjoy
the benefits under the CBA.
The Court holds that it is the prerogative of management to regulate,
according to its discretion and judgment, all aspects of employment. This
flows from the established rule that labor law does not authorize the
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substitution of the judgment of the employer in the conduct of its business.
Such management prerogative may be availed of without fear of any
liability so long as it is exercised in good faith for the advancement of
the employers’ interest and not for the purpose of defeating or
circumventing the rights of employees under special laws or valid
agreement and are not exercised in a malicious, harsh, oppressive,
vindictive or wanton manner or out of malice or spite.
The grant by petitioner of profit sharing benefits to the employees outside
the "bargaining unit" falls under the ambit of its managerial prerogative. It
appears to have been done in good faith and without ulterior motive. More
so when as in this case there is a clause in the CBA where the employees
are classified into those who are members of the union and those who are
not. In the case of the union members, they derive their benefits from the
terms and conditions of the CBA contract which constitute the law between
the contracting parties. Both the employer and the union members are
bound by such agreement.
Case Digest: Gopez, S. F. A.
5. NORMA MABEZA vs. NATIONAL LABOR RELATIONS COMMISSION,
PETER NG/HOTEL SUPREME
G.R. No. 118506 | 1997-04-18
TICKLER: Hotel staff being forced to sign an instrument, Mabeza refused
so she was terminated from work as an example to other employees
RATIO: 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.
FACTS: 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.
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
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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.
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. According to her, respondent strongly chided her for refusing to
proceed to the City Prosecutor's Office to attest to the affidavit. She
thereafter reluctantly filed a leave of absence from her job which was
denied by management. When she attempted to return to work 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,
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.
Peter Ng alleged before Labor Arbiter Pati that Mabeza "surreptitiously left
(her job) without notice to the management" and that she actually
abandoned her work. He maintained that there was no basis for the money
claims for underpayment and other benefits as these were paid in the form
of facilities to petitioner and the hotel's other employees. Peter Ng raised a
new ground, loss of confidence, which was supported by a criminal
complaint for Qualified Theft he filed before the prosecutor's office of the
City of Baguio against Mabeza.
Issue: Whether or not the dismissal by the private respondent of petitioner
constitutes an unfair labor practice.
Held: YES. 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
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
employment through concerted action.
We agree with the Solicitor General's observation in his manifestation that
"this actuation is analogous to the situation envisaged in paragraph (f) of
Article 248 of the Labor Code" 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"
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.
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. Granting 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.
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;" he failed to provide proof of the
employee's written authorization; and, he failed to show how he arrived at
the valuations.
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
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manifestation, "secured certified copies thereof from the nearest regional
office of the Department of Labor, the SSS or the BIR."
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. Considering, 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.
It is therefore evident that petitioner is entitled to the payment of the
deficiency in her wages equivalent to the full wage applicable from May 13,
1988 up to the date of her illegal dismissal.
Additionally, petitioner is entitled to payment of service incentive leave pay,
emergency cost of living allowance, night differential pay, and 13th month
pay for the periods alleged by the petitioner as the private respondent has
never been able to adduce proof that petitioner was paid the aforestated
benefits.
Case Digest: Laxamana, Fatima Joyce
6. Complex Electronics Employees Association vs. NLRC
G.R. No. 121315. July 19, 1999G.R. No. 89 | July 30, 1990
Tickler: Complex Closure; 97 Affected Employees
Ratio: Without the much needed equipment, Complex was unable to
continue its business. It was left with no other choice except to shut down
the entire business. The closure, therefore, was not motivated by the union
activities of the employees, but rather by necessity, since it can no longer
engage in the production without the much needed materials, equipment
and machinery.
Facts: Complex Electronics Corporation (Complex) was engaged in the
manufacture of electronic products. It was actually a subcontractor of
electronic products where its customers gave their job orders, sent their
own materials and consigned their equipment to it. The customers were
foreign-based companies with different product lines and specifications
requiring the employment of workers with specific skills for each product
line.
The rank and file workers of Complex were organized into a union known
as the Complex Electronics Employees Association, herein referred to as
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
the Union.
On March 4, 1992, Complex received a facsimile message from Lite-On
Philippines Electronics Co., requiring it to lower its price by 10%.
Consequently, on March 9, 1992, a meeting was held between Complex
and the personnel of the Lite-On Production Line. Complex informed its
Lite-On personnel that such request of lowering their selling price by 10%
was not feasible as they were already incurring losses at the present prices
of their products. Under such circumstances, Complex regretfully informed
the employees that it was left with no alternative but to close down the
operations of the Lite-On Line. The company, however, promised that:
1) Complex will follow the law by giving the people to be retrenched the
necessary 1 month notice. Hence, retrenchment will not take place until
after 1 month from March 09, 1992.
2) The Company will try to prolong the work for as many people as possible
for as long as it can by looking for job slots for them in another line if
workload so allows and if their skills are compatible with the line
requirement.
3) The company will give the employees to be retrenched a retrenchment
pay as provided for by law i.e. half a month for every year of service in
accordance with Article 283 of the Labor Code of Philippines.
The Union, on the other hand, pushed for a retrenchment pay equivalent to
one (1) month salary for every year of service, which Complex refused.
On March 13, 1992, Complex filed a notice of closure of the Lite-On Line
with the Department of Labor and Employment (DOLE) and the
retrenchment of the ninety-seven (97) affected employees.
Thereafter, the Union filed a notice of strike with the National Conciliation
and Mediation Board (NCMB). The Union conducted a strike vote which
resulted in a "yes" vote.
In the evening of April 6, 1992, the machinery, equipment and materials
being used for production at Complex were pulled-out from the company
premises and transferred to the premises of Ionics Circuit, Inc. (Ionics) at
Cabuyao, Laguna. The following day, a total closure of company operation
was effected at Complex.
A complaint was filed with the Labor Arbitration Branch of the NLRC for
unfair labor practice, illegal closure/illegal lockout, money claims for
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vacation leave, sick leave, unpaid wages, 13th month pay, damages and
attorney's fees.
The Union alleged that the pull-out of the machinery, equipment and
materials from the company premises, which resulted to the sudden
closure of the company was in violation of Section 3 and 8, Rule XIII, Book
V of the Labor Code of the Philippines 4 and the existing CBA. Ionics was
impleaded as a party defendant because the officers and management
personnel of Complex were also holding office at Ionics with Lawrence Qua
as the President of both companies.
Complex, on the other hand, averred that since the time the Union ?led its
notice of strike, there was a significant decline in the quantity and quality of
the products in all of the production lines. The delivery schedules were not
met prompting the customers to lodge complaints against them. Fearful
that the machinery, equipment and materials would be rendered
inoperative and unproductive due to the impending strike of the workers,
the customers ordered their pull-out and transfer to Ionics. Thus, Complex
was compelled to cease operations.
After trial on the merits, the labor arbiter rendered a decision ordering
respondents Complex Electronics Corporation, Ionics Incorporated and
Lawrence Qua, to reinstate the 531 employees to their former position and
to pay the complainants the aggregate amount of P26,949, 891.80.
On appeal, the NLRC rendered a decision ordering the respondent
Complex Electronics Corporation to pay the 531 complainants equivalent to
one month pay in lieu of notice and separation pay equivalent to one month
pay for every year of service and a fraction of six months as one whole
year. Respondents Ionics and Lawrence Qua were ordered excluded as
parties solidarily liable with Complex. Aggrieved by the decision, Complex,
Ionics and the complainants filed their respective motions for
reconsideration, but were denied by respondent NLRC. Hence these
petitions.
Issue: Whether or not the Complex is guilty of illegal closure and illegal
dismissal of the petitioners.
Held: NO. The Court ruled that there was a complete cessation of the
business operations at the complex not because of the labor dispute.
COMPELETE CESSATION OF BUSINESS OPERATIONS.
Lockout is the temporary refusal of employer to furnish work as a result of
an industrial or labor dispute. It may be manifested by the employer's act of
excluding employees who are union members. In the present case, there
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
was a complete cessation of the business operations at Complex not
because of the labor dispute. It should be recalled that, before the labor
dispute, Complex had already informed the employees that they would be
closing the Lite-On Line. The employees, however, demanded for a
separation pay equivalent to one (1) month salary for every year of service
which Complex refused to give.
When Complex filed a notice of closure of its Lite-On Line, the employees
filed a notice of strike which greatly alarmed the customers of Complex and
this led to the pull-out of their equipment, machinery and materials from
Complex. Thus, without the much needed equipment, Complex was unable
to continue its business. It was left with no other choice except to shut
down the entire business. The closure, therefore, was not motivated by the
union activities of the employees, but rather by necessity since it can no
longer engage in production without the much needed materials, equipment
and machinery.
CESSATION OF BUSINESS IS A MANAGEMENT PREROGATIVE AS
LONG AS IT IS DONE IN GOOD FAITH.
Whether or not Complex was incurring great losses, it is still one of the
management's prerogative to close down its business as long as it is done
in good faith. Thus, in Catatista et al. vs. NLRC and Victorias Milling Co.,
Inc. we ruled: In any case, Article 283 of the Labor Code is clear that an
employer may close or cease his business operations or undertaking even
if he is not suffering from serious business losses or financial reverses, as
long as he pays his employees their termination pay in the amount
corresponding to their length of service. It would indeed, be stretching the
intent and spirit of the law if we were to unjustly interfere in management's
prerogative to close or cease its business operations just because said
business operations or undertaking is not suffering from any loss.
Anent the issue of separation pay, the Court ruled that notwithstanding the
financial losses suffered by Complex, such was, however, not the main
reason for its closure, hence there was no grave abuse of discretion on the
part of the public respondent in awarding the employees one month for
every year of service as termination pay. Accordingly, the assailed decision
of the NLRC was affirmed.
Case Digest: Malaluan, G.C.Q.
7. MALAYANG SAMAHAN NG MGA MANGGAGAWA SA M.
GREENFIELD vs. RAMOS
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G. R. No. 113907 - February 28, 2000
Ratio: Thus, notwithstanding the fact that the dismissal was at the
instance of the federation and that it undertook to hold the company free
from any liability resulting from such a dismissal, the company may still be
held liable if it was remiss in its duty to accord the would-be dismissed
employees their right to be heard on the matter.
Tickler: Malayang Samahan, ULP
Facts: Malayang Samahan ng mga Manggagawa sa M. Greenfield is a
local union member of the federation United Lumber and General
Workers of the Philippines. The local union and the federation had a
disagreement which originated from the latter’s alleged failure to provide
legal, educational or organizational support, thus, the local union
declaring autonomy. As a consequence, thirty (30) union officers were
expelled from the federation for committing acts of disloyalty and/or acts
inimical to the federation. Pursuant to the union security clause of the
CBA (maintenance of membership), the federation moved to dismiss said
union officers, which the company adhered to.
Members of the local union staged a strike which was attended with
violence, force and intimidation on both sides resulting to physical injuries
to several employees and damage to company properties. The company
attempted to quell the same by hiring persons to pacify the strikers.
Several members of the local union were placed on preventive
suspension and only some were allowed to return to work.
The local union filed a complaint for Unfair Labor Practice. The company’s
defense is that the strike was illegal for being founded upon a non-
strikeable issue and marred by violence.
Issue: Whether or not respondent company was justified in dismissing
petitioner employees merely upon the labor federation's demand for the
enforcement of the union security clause embodied in their collective
bargaining agreement.
Held: NO. 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
requirement of due process. The reason behind the enforcement of union
security clauses which is the sanctity and inviolability of contracts cannot
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
override one's right to due process.
In the case under scrutiny, petitioner union officers were expelled by the
federation for allegedly committing acts of disloyalty and/or inimical to the
interest of ULGWP and in violation of its Constitution and By-laws. Upon
demand of the federation, the company terminated the petitioners without
conducting a separate and independent investigation. Respondent
company did not inquire into the cause of the expulsion and whether or
not the federation had sufficient grounds to effect the same. Relying
merely upon the federation's allegations, respondent company terminated
petitioners from employment when a separate inquiry could have revealed
if the federation had acted arbitrarily and capriciously in expelling the
union officers. Respondent company's allegation that petitioners were
accorded due process is belied by the termination letters received by the
petitioners which state that the dismissal shall be immediately effective.
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. 16 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.
In its decision, public respondent also declared that if complainants
(herein petitioners) have any recourse in law, their right of action is
against the federation and not against the company or its officers, relying
on the findings of the Labor Secretary that the issue of expulsion of
petitioner union officers by the federation is a purely intra-union matter.
While it is true that the issue of expulsion of the local union officers is
originally between the local union and the federation, hence, intra-union in
character, the issue was later on converted into a termination dispute
when the company dismissed the petitioners from work without the benefit
of a separate notice and hearing. As a matter of fact, the records reveal
that the termination was effective on the same day that the termination
notice was served on the petitioners.
Thus, notwithstanding the fact that the dismissal was at the instance of
the federation and that it undertook to hold the company free from any
liability resulting from such a dismissal, the company may still be held
liable if it was remiss in its duty to accord the would-be dismissed
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employees their right to be heard on the matter.
Case Digest: Martinez, M. J. A.
8. Standard Chartered Bank vs. Confesor
G.R. NO. 114974 | June 16, 2004
Tickler: ULP, family affair, surface bargaining, blue sky bargaining
Ratio: The right to self-organization necessarily includes the right to
collective bargaining. Parenthetically, if an employer interferes in the
selection of its negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be inferred that the
employer adopted the said act to yield adverse effects on the free exercise
to right to self-organization or on the right to collective bargaining of the
employees, ULP under Article 248(a) in connection with Article 243 of the
Labor Code is committed. In order to show that the employer committed
ULP under the Labor Code, substantial evidence is required to support the
claim. Substantial evidence has been defined as such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.
Facts: The Bank and the Union signed a five-year CBA with a provision to
renegotiate the terms thereof on the third year. Prior to the expiration of the
three-year period. Within the sixty-day freedom period, the Union initiated
the negotiations. The Union, through its President, Eddie L. Divinagracia,
sent a letter containing its proposals covering political provisions and 34
economic provisions. Included therein was a list of the names of the
members of the Unions negotiating panel. The bank took note of the
Union’s proposal and posited that it would be in a better position to present
its counter-proposals on the economic items after the Union had presented
its justifications for the economic proposals.
Before the commencement of the negotiation, the Union, through
Divinagracia, suggested to the Bank’s Human Resource Manager and head
of the negotiating panel, Cielito Diokno, that the bank lawyers should be
excluded from the negotiating team. The Bank acceded. Meanwhile, Diokno
suggested to Divinagracia that Jose P. Umali, Jr., the President of the
National Union of Bank Employees (NUBE), the federation to which the
Union was affiliated, be excluded from the Union’s negotiating panel.
However, Umali was retained as a member thereof.
The parties met and set the ground rules for the negotiation. Diokno
suggested that the negotiation be kept a family affair. The proposed non-
economic provisions of the CBA were discussed first. Even during the final
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
reading of the non-economic provisions there were still provisions on which
the Union and the Bank could not agree. Towards the end of the meeting,
the Union manifested that the same should be changed to DEADLOCKED
to indicate that such items remained unresolved. Both parties agreed to
place the notation DEFERRED/DEADLOCKED.
The negotiation for economic provisions commenced. Except for the
provisions on signing bonus and uniforms, the Union and the Bank failed to
agree on the remaining economic provisions of the CBA. The Union
declared a deadlock and filed a notice of strike with the NCMB. On the
other hand, the Bank filed a complaint for ULP and Damages before the
Arbitration Branch of the NLRC. It contended that the Union demanded "sky
high economic demands," indicative of blue-sky bargaining. Further, the
Union violated its no strike- no lockout clause by filing a notice of strike
before the NCMB. Considering that the filing of notice of strike was an
illegal act, the Union officers should be dismissed.
Then Secretary of Labor and Employment (SOLE) Confesor, issued an
Order assuming jurisdiction over the labor dispute at the Bank. The
complaint for ULP filed by the Bank before the NLRC was consolidated with
the complaint over which the SOLE assumed jurisdiction. The SOLE
ordered the parties to execute a collective bargaining agreement
incorporating the dispositions contained herein. The SOLE dismissed the
charges of ULP of both the Union and the Bank, explaining that both parties
failed to substantiate their claims. The SOLE stated that ULP charges
would prosper only if shown to have directly prejudiced the public interest.
Issue: W/N the Union was able to substantiate its claim of ULP against the
Bank arising from the latter’s alleged interference with its choice of
negotiator; surface bargaining; making bad faith non-economic proposals;
and refusal to furnish the Union with copies of the relevant data.
Held: Article 248(a) of the Labor Code, considers it an unfair labor practice
when an employer interferes, restrains or coerces employees in the
exercise of their right to self-organization or the right to form association.
The right to self-organization necessarily includes the right to collective
bargaining. Parenthetically, if an employer interferes in the selection of its
negotiators or coerces the Union to exclude from its panel of negotiators a
representative of the Union, and if it can be inferred that the employer
adopted the said act to yield adverse effects on the free exercise to right to
self-organization or on the right to collective bargaining of the employees,
ULP under Article 248(a) in connection with Article 243 of the Labor Code is
committed. In order to show that the employer committed ULP under the
Labor Code, substantial evidence is required to support the claim.
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Substantial evidence has been defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.
The circumstances that occurred during the negotiation do not show that
the suggestion made by Diokno to Divinagracia is an anti-union conduct
from which it can be inferred that the Bank consciously adopted such act to
yield adverse effects on the free exercise of the right to self-organization
and collective bargaining of the employees, especially considering that such
was undertaken previous to the commencement of the negotiation and
simultaneously with Divinagracia’s suggestion that the bank lawyers be
excluded from its negotiating panel. It is clear that such ULP charge was
merely an afterthought. The accusation occurred after the arguments and
differences over the economic provisions became heated and the parties
had become frustrated.
Re: Surface bargaining
Surface bargaining is defined as “going through the motions of negotiating”
without any legal intent to reach an agreement. The Union has not been
able to show that the Bank had done acts, both at and away from the
bargaining table, which tend to show that it did not want to reach an
agreement with the Union or to settle the differences between it and the
Union. Admittedly, the parties were not able to agree and reached a
deadlock. However, it is herein emphasized that the duty to bargain “does
not compel either party to agree to a proposal or require the making of a
concession. Hence, the parties’ failure to agree did not amount to ULP
under Article 248(g) for violation of the duty to bargain.
The minutes of meetings do not show that the Bank had any intention of
violating its duty to bargain with the Union. Records show that after the
Union sent its proposal to the Bank, the latter replied with a list of its
counter-.Thereafter, meetings were set for the settlement of their
differences. The minutes of the meetings show that both the Bank and the
Union exchanged economic and non-economic proposals and counter-
proposals. The Union has not been able to show that the Bank had done
acts, both at and away from the bargaining table, which tend to show that it
did not want to reach an agreement with the Union or to settle the
differences between it and the Union. Admittedly, the parties were not able
to agree and reached a deadlock. However, it is herein emphasized that the
duty to bargain does not compel either party to agree to a proposal or
require the making of a concession.53 Hence, the parties failure to agree
did not amount to ULP under Article 248(g) for violation of the duty to
bargain.
Re: The Union Did Not Engage In Blue-Sky Bargaining
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
The Bank failed to show that the economic demands made by the Union
were exaggerated or unreasonable. The minutes of the meeting show that
the Union based its economic proposals on data of rank and file employees
and the prevailing economic benefits received by bank employees from
other foreign banks doing business in the Philippines and other branches of
the Bank in the Asian region.
Re: Refusal of bank to furnish information
We, likewise, find that the Union failed to substantiate its claim that the
Bank refused to furnish the information it needed. While the refusal to
furnish requested information is in itself an unfair labor practice, and also
supports the inference of surface bargaining, in the case at bar, Umali, in a
meeting dated May 18, 1993, requested the Bank to validate its
guestimates on the data of the rank and file. However, Umali failed to put
his request in writing as provided for in Article 242(c) of the Labor Code
In sum, we find that the public respondent did not act with grave abuse of
discretion amounting to lack or excess of jurisdiction when it issued the
questioned order and resolutions. While the approval of the CBA and the
release of the signing bonus did not estop the Union from pursuing its
claims of ULP against the Bank, we find that the latter did not engage in
ULP. We, likewise, hold that the Union is not guilty of ULP.
Case Digest: Paz, J.N.A.
9. Philcom Employees Union v. Philippine Global Communications
G.R. No. 144315 | July 17, 2006
Tickler: PEU, PhilCom, ULP
Ratio: 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.
Facts: Upon the expiration of the CBA between petitioner Philcom Employees
Union (PEU) and private respondent Philippine Global Communications, Inc.
(Philcom, Inc.), the parties started negotiations for the renewal of their CBA. While
negotiations were ongoing, PEU filed with the NCMB a Notice of Strike due to
perceived unfair labor practice committed by the company. In view of the filing of
the Notice of Strike, the company suspended negotiations on the CBA which
moved the union to file another Notice of Strike on the ground of bargaining
deadlock.
When the Acting Labor Secretary Trajano assumed jurisdiction over the
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dispute, the union assailed the authority of then Acting Secretary Trajano to
assume jurisdiction over the labor dispute. More importantly, the union
raised the issue of the alleged unfair labor practice of the company
enumerated as follows:
a. PABX transfer and contractualization of PABX service and
position;
b. Massive contractualization;
c. Flexible labor and additional work/function;
d. Disallowance of union leave intended for union seminar;
e. Misimplementation and/or non-implementation of employees'
benefits like shoe allowance, rainboots, raincoats, OIC shift
allowance, P450.00 monthly allowance, driving allowance,
motorcycle award and full-time physician;
f. Non-payment, discrimination and/or deprivation of overtime,
restday work, waiting/stand by time and staff meetings;
g. Economic inducement by promotion during CBA negotiation;
h. Disinformation scheme, surveillance and interference with union
affairs;
i. Issuance of memorandum/notice to employees without giving copy
to union, change in work schedule at Traffic Records Section and
ITTO policies; and
j. Inadequate transportation allowance, water and facilities
Issue: Whether or not Philcom’s acts constitute unfair labor practices under
Article 248 of the Labor Code.
Held: NO. 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. Without that element, the
acts, no matter how unfair, are not unfair labor practices. The only
exception is Article 248(f), which in any case is not one of the acts specified
in PEU's charge of unfair labor practice.
A review of the acts complained of as unfair labor practices of Philcom do
not fall under any of the prohibited acts defined and enumerated in Article
248 of the Labor Code. The issues of misimplementation or non-
implementation of employee benefits, non-payment of overtime and other
monetary claims, inadequate transportation allowance, water, and other
facilities, are all a matter of implementation or interpretation of the economic
provisions of the CBA between Philcom and PEU subject to the grievance
procedure.
A reading of private respondent's justification for the acts complained of
would reveal that they were actually legitimate reasons and not in anyway
related to union busting. Hence, as to compelling employees to render
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
flexible labor and additional work without additional compensation, it is the
company's explanation that the employees themselves voluntarily took on
work pertaining to other assignments but closely related to their job
description when there was slack in the business which caused them to be
idle.
On the alleged misimplementation and/or non-implementation of
employees' benefits, the company gave the following explanation which the
Court finds plausible, to wit:
The employees at CTSS were given One Thousand Pesos
(P1,000.00) cash or its equivalent in purchase orders because it
was their own demand that they be given the option to buy the pair
of leather boots they want. According to the employees, they were
not aware that they were entitled to these benefits. Moreover,
aside from a part time physician who reports for duty everyday, the
company has secured the services of Prolab Diagnostics, which
has complete medical facilities and personnel, to serve the
medical needs of the employees.
On the issue of non-payment, discrimination and/or deprivation of overtime,
restday work, waiting/stand by time and staff meeting allowance, suffice it to
state that there is nothing on record to prove the same. Petitioner did not
present evidence substantial enough to support its claim.
As to the alleged inadequate transportation allowance and facilities, the
company posits that:
The transportation allowances given to the employees are more
than adequate to defray their daily transportation cost. Hence,
there is absolutely no justification for an increase in the said
allowance. As to the demand for clean drinking water, the
company has installed sufficient and potable water inside the Head
Office even before the strike was staged by the Union.
Anent the allegation of PABX transfer and contractualization of PABX
service and position, these were done in anticipation of the company to
switch to an automatic PABX machine which requires no operator. This
cannot be treated as ULP since management is at liberty, absent any
malice on its part, to abolish positions which it deems no longer necessary.
With respect to the perceived massive contractualization of the company,
said charge cannot be considered as ULP since the hiring of contractual
workers did not threaten the security of tenure of regular employees or
union members. That only 160 employees out of 400 employees in the
company's payroll were considered rank and file does not of itself indicate
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unfair labor practice since this is but a company prerogative in connection
with its business concerns.
Likewise, the offer or promotions to a few union members is neither
unlawful nor an economic inducement. These offers were made in
accordance with the legitimate need of the company for the services of
these employees to fill positions left vacant by either retirement or
resignation of other employees. Besides, a promotion is part of the career
growth of employees found competent in their work.
On the union's charge that management disallowed leave of union officers
and members to attend union seminar, this is belied by the evidence
submitted by the union itself. In a letter to PEU's President, the company
granted the leave of several union officers and members to attend a
seminar notwithstanding that its request to be given more details about the
affair was left unheeded by the union. Those who were denied leave were
urgently needed for the operation of the company.
On the ULP issue of disinformation scheme, surveillance and interference
with union affairs, these are mere allegations unsupported by facts. The
charge of "black propaganda" allegedly committed by the company when it
supposedly posted two (2) letters addressed to the Union President is
totally baseless. Petitioner presents no proof that it was the company which
was behind the incident.
On the issuance of memorandum/notice to employees without giving copy
to union, change in work schedule at Traffic Records Section and ITTO
policies, the company has sufficiently rebutted the same, thus:
Contrary to the allegations of the Union, the rationale and
mechanics for the abolishment of the midnight schedule at the
Traffic Record Services had been thoroughly and adequately
discussed with the Union's President and the staff of Traffic
Record Services. The midnight services were abolished for purely
economic reasons. The company realized that the midnight work
can be handled in the morning without hampering normal
operations. At the same time, the company will be able to save on
cost.
The Court has always respected a company's exercise of its prerogative to
devise means to improve its operations. Thus, the Court have held that
management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments,
supervision and transfer of employees, working methods, time, place and
manner of work.
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5
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.
Even assuming arguendo that Philcom had violated some provisions in the
CBA, there was no showing that the same was a flagrant or malicious
refusal to comply with its economic provisions. The law mandates that such
violations should not be treated as unfair labor practices.
Case Digest: Poncardas, Z.K.A.
10. Mendoza v. Officers of Manila Water
G.R. No. 201595 | January 25, 2016
Tickler: Unfair Labor Practices, Manila Water
Ratio: Unfair labor practices may be committed both by the employer under
Article 248 and by labor organizations under Article 249 of the Labor Code.
Facts: Petitioner was a member of the Manila Water Employees Union
(MWEU), a registered labor organization consisting of rank-and-file
employees within Manila Water Company (MWC). The respondents herein
were MWEU officers during the period material to this petition.
Petitioner was informed he failed to pay union dues was warned that this
would result in sanctions upon him. Borela, an officer of the union, referred
the charge to the MWEU grievance committee for investigation. A notice of
hearing was sent to petitioner, who attended the scheduled hearing. The
MWEU grievance committee recommended that petitioner be suspended
for 30 days. The Executive Board "unanimously approved.” Petitioner and
his co-respondents wrote to Borela expressing their intention to appeal the
same to the General Membership Assembly in accordance with of the
union's Constitution and By-Laws, which grants them the right to appeal
any arbitrary resolution, policy and rule promulgated by the Executive Board
to the General Membership Assembly. Borela denied petitioner's appeal,
stating that the prescribed period for appeal had expired.
Petitioner was once more charged with non-payment of union dues and
was again penalized with a 30-day suspension by Borela. Petitioner wrote a
reply invoking his right to appeal through the convening of the General
Membership Assembly. However, the respondents did not act on
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petitioner's plea.
Meanwhile, MWEU scheduled an election of officers. Petitioner filed his
certificate of candidacy for VP, but he was disqualified for not being a
member in good standing on account of his suspension.
Petitioner was then charged with non-payment of union dues for the third
time. He did not attend the scheduled hearing. This time, he was meted the
penalty of expulsion from the union, per "unanimous approval" of the
members of the Executive Board. His pleas for an appeal to the General
Membership Assembly were once more unheeded.
During the freedom period and negotiations for a new collective bargaining
agreement (CBA) with MWC, petitioner joined another union, the Workers
Association for Transparency, Empowerment and Reform, All-Filipino
Workers Confederation (WATER-AFWC). He was elected union President.
Other MWEU members were inclined to join WATER-AFWC, but MWEU
director Torres threatened that they would not get benefits from the new
CBA. The MWEU leadership submitted a proposed CBA which contained
provisions to the effect that in the event of retrenchment, non-MWEU
members shall be removed first, and that upon the signing of the CBA, only
MWEU members shall receive a signing bonus.
Petitioner filed a Complaint against respondents for unfair labor practices.
Respondents claimed that the Labor Arbiter had no jurisdiction over the
dispute, which is intra-union in nature; that the Bureau of Labor Relations
(BLR) was the proper venue and that they were not guilty of unfair labor
practices, discrimination, coercion or restraint.
The Labor Arbiter issued her Decision stating that filing of the instant case
is still premature and that the parties shall exhaust first all the administrative
remedies before resorting to compulsory arbitration. Thus, instant case is
referred back to the Union. The NLRC dismissed the petition. The CA
dismissed the petition.
Issue: Whether or not respondents are guilty of Unfair Labor Practice.
Held: YES. Unfair labor practices may be committed both by the employer
under Article 248 and by labor organizations under Article 249 of the Labor
Code.
Atty. Roland Marquez Labor Law 2: Case Digests Batch 5 UST Block 2A

Petitioner contends that respondents committed acts constituting unfair

labor practices, but that the Labor Arbiter, the NLRC, and the CA ignored it
and simply dismissed his complaint on the ground that his causes of action
were intra- or inter-union in nature. Specifically, petitioner claims that he
was suspended and expelled from MWEU illegally as a result of the denial
of his right to appeal his case to the general membership assembly in
accordance with the union's constitution and by-laws. On the other hand,
respondents counter that such charge is intra-union in nature, and that
petitioner lost his right to appeal when he failed to petition to convene the
general assembly through the required signature of 30% of the union
membership in good standing pursuant to Article VI, Section 2 (a) of
MWEU's Constitution and By-Laws or by a petition of the majority of the
general membership in good standing under Article VI, Section 3.
Under the Constitution and By-Laws of the union, when an MWEU member
is suspended, he is given the right to appeal such suspension within three
working days from the date of notice of said suspension, which appeal the
MWEU Executive Board is obligated to act upon by a simple majority vote.
When the penalty imposed is expulsion, the expelled member is given
seven days from notice of said dismissal and/or expulsion to appeal to the
Executive Board, which is required to act by a simple majority vote of its
members. The Board's decision shall then be approved/disapproved by a
majority vote of the general membership assembly in a meeting duly called
for the purpose.
MWEU due to respondents' failure to act on his written appeals. The
required petition to convene the general assembly through the required
signature of 30% or majority of the union membership does not apply in
petitioner's case; the Executive Board must first act on his two appeals
before the matter could properly be referred to the general membership.
Because respondents did not act on his two appeals, petitioner was
unceremoniously suspended, disqualified and deprived of his right to run for
the position of MWEU Vice-President election of officers, expelled from
MWEU, and forced to join another union, WATER-AFWC. For these,
respondents are guilty of unfair labor practices under Article 249 (a) and (b)
— that is, violation of petitioner's right to self-organization, unlawful
discrimination, and illegal termination of his union membership — which
case falls within the original and exclusive jurisdiction of the Labor Arbiters,
in accordance with Article 217 of the Labor Code.
Case Digest: Quiambao, Angelica Roscea S.

The documentary evidence is clear that when petitioner received Borela's

letter informing him of the Executive Board's unanimous approval of the
grievance committee recommendation to suspend him for the second time,
he immediately and timely filed a written appeal. However, the Executive
Board did not act thereon. Then again, when petitioner was charged for the
third time and meted the penalty of expulsion from MWEU by the
unanimous vote of the Executive Board, his timely appeal was again not
acted upon by said board.

Thus, contrary to respondents' argument that petitioner lost his right to

appeal when he failed to petition to convene the general assembly through
the required signature of 30% of the union membership in good standing
pursuant to Article VI, Section 2 (a) of MWEU's Constitution and By-Laws or
by a petition of the majority of the general membership in good standing
under Article VI, Section 3, the SC finds that petitioner was illegally
suspended for the second time and thereafter unlawfully expelled from

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