GOYA, INC. vs GOYA, INC.

EMPLOYEES UNION-FFW
G.R. No. 170054, January 21, 2013

Facts:

Goya, Inc. (“Goya”) hired contractual workers from PESO Resources Development Corporation (PESO) to perform temporary
and occasional services in its factory in Marikina. Goya, Inc. Employees Union-FFW (“Union”) requested for a grievance
conference on the ground that contractual workers do not belong to the three categories of employees stipulated in the CBA
(regular, probationary and casual). The matter was later referred to NCMB for voluntary arbitration.

In its pleading, the Union argued that the hiring of contractual employees is not a management prerogative and in gross
violation of the CBA tantamount to unfair labor practice, since the CBA only provides for only three categories of employees.
In relation, the work assigned to the contractual employees are those previously performed by regular employees. Further,
the CBA allows the maintenance of the pool of casual employees from which Goya shall hire workers who then becomes
regular employees when necessary to employ them for more than a year, and the hiring of probationary employees who also
becomes regular employees. Allowing to hire contractual employees shall deny the Union from having additional members
(or security of the Union to membership). Ultimately, if Goya’s argument is sustained, it shall lead to situations where it will
retrench or retire employees and will import employees from PESO, which shall lead to the extinguishment of the Union.

As for Goya, it contends the following: (a) the law expressly allows contracting and subcontracting arrangements; (b) the
hiring of contractual employees shall not prejudice the Union as no employee was terminated and neither did it result to
reduction of working hours nor the reduction/splitting of the bargaining unit; and (c) The CBA did not prohibit the company
from hiring employees through job contractors or its management prerogative to address temporary needs of its operations.

The voluntary arbitrator dismissed the unfair labor practice charge against Goya due to lack of factual basis but ordered it to
comply with the provisions of the CBA with regard to the hiring only of either regular, probationary or casual employees.
Aggrieved, Goya appealed the case to the Court of Appeals where the latter sustained the ruling of the voluntary arbitrator
and agreed that while the engagement of PESO is a management prerogative, such prerogative should be exercised in good
faith and not in contravention to law or CBA. Hence, Goya filed an appeal before the Supreme Court.

Issue:

Whether or not Goya’s engagement of PESO to place contractual employees is a valid exercise of management prerogative.

Ruling:

No. It was held by the Supreme Court that it is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions. A CBA is the negotiated contract between the
legitimate labor organization and the employer concerning terms and conditions of employment, and the parties are free to
stipulate such terms that they may deem convenient provided that these are not contrary to law, morals, good customs,
public order and public policy. Further, the exercise of management prerogative is not unlimited as it is subject to the
limitations found in law, CBA or the general principles of fair play and justice.

Given that the CBA between Goya and the Union are clear with regard to the three classes of employees and the union
security on its membership, it should be harmonized to give proper effect. Therefore, Goya’s contention that its act is valid as
an exercise of management prerogative is misplaced, as it shall be incompatible with the provisions of the CBA, which as
mentioned, is the law between the parties and should be complied with.