a.

“Unfair ka”: Unfair Labor Practices in the Workplace

1. Insular Life Assurance Employees v. Insular Life GR No. L-2529

1/30/1971 (Guzman)

Facts:

The Insular Life Assurance Co., Ltd., Employees Association-NATU, FGU

Insurance Group Workers & Employees Association-NATU, and Insular Life
Building Employees Association-NATU (hereinafter referred to as 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 (hereinafter referred to as
the Companies).

In a letter dated September 16, 1957, the Unions jointly submitted

proposals to the Companies for a modified renewal of their respective
collective bargaining contracts which were then due to expire on September
30, 1957.

Thereafter, in the months of September and October 1957 negotiations were

conducted on the Union's proposals, but these were snagged by a deadlock
on the issue of union shop, as a result of which the Unions filed on January
27, 1958 a notice of strike for "deadlock on collective bargaining." Several
conciliation conferences were held under the auspices of the Department of
Labor wherein the conciliators urged the Companies to make reply to the
Unions' proposals en toto so that the said Unions might consider the
feasibility of dropping their demand for union security in exchange for other
benefits.

From April 25 to May 6, 1958, the parties negotiated on the labor demands
but with no satisfactory result due to a stalemate on the matter of salary
increases. On May 13, 1958 the Unions demanded from the Companies final
counter-proposals on their economic demands, particularly on salary
increases. Instead of giving counter-proposals, the Companies on May 15,
1958 presented facts and figures and requested the Unions to submit a
workable formula which would justify their own proposals, taking into
account the financial position of the former. Forthwith the Unions voted to
declare a strike in protest against what they considered the Companies'
unfair labor practices.

On May 20, 1958 the Unions went on strike and picketed the offices of the
Insular Life Building at Plaza Moraga.

On May 21, 1958 the Companies through their acting manager and
president, the respondent Jose M. Olbes (hereinafter referred to as the
respondent Olbes), sent to each of the strikers a letter (exhibit A) quoted
verbatim as follows:

We recognize it is your privilege both to strike and to conduct picketing.

However, if any of you would like to come back to work voluntarily, you
may:

1. Advise the nearest police officer or security guard of your intention to do

so.

2. Take your meals within the office.

3. Make a choice whether to go home at the end of the day or to sleep

nights at the office where comfortable cots have been prepared.

4. Enjoy free coffee and occasional movies.

5. Be paid overtime for work performed in excess of eight hours.

6. Be sure arrangements will be made for your families.

The decision to make is yours — whether you still believe in the motives of
the strike or in the fairness of the Management.

The Unions, however, continued on strike, with the exception of a few

unionists who were convinced to desist by the aforesaid letter of May 21,
1958.
The company used strike breakers then led some strikers and non-strikers
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.

On July 29, 1958 the CIR prosecutor filed a complaint for unfair labor
practice against the Companies under Republic Act 875. The complaint
specifically charged the Companies with (1) interfering with the members of
the Unions in the exercise of their right to concerted action, by sending out
individual letters to them urging them to abandon their strike and return to
work, with a promise of comfortable cots, free coffee and movies, and paid
overtime, and, subsequently, by warning them that if they did not return to
work on or before June 2, 1958, they might be replaced; and (2)
discriminating against the members of the Unions as regards readmission to
work after the strike on the basis of their union membership and degree of
participation in the strike.

On August 4, 1958 the Companies filed their answer denying all the material
allegations of the complaint, stating special defenses therein, and asking for
the dismissal of the complaint.

Court of Industrial Relations ruling

After trial on the merits, the Court of Industrial Relations, rendered on a

decision dismissing the Unions' complaint for lack of merit. On August 31,
1965 the Unions seasonably filed their motion for reconsideration of the said
decision, and their supporting memorandum on September 10, 1965. This
was denied by the Court of Industrial Relations en banc in a resolution
promulgated on October 20, 1965.

Hence, this petition for review.

Issue:

WON the respondent employer is guilty of unfair labor practice?

Held: Yes.

1. Sending of letters individually during a strike is unfair labor

practice
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.

2. Right to free speech is not applicable when expression of opinion

expression of opinion by the employer or his agent contains a promise of
benefit, or threats, or reprisal

Moreover, since exhibit A is a letter containing promises of benefits to the

employees in order to entice them to return to work, it is not protected by
the free speech provisions of the Constitution. The same is true with exhibit
B since it contained threats to obtain replacements for the striking
employees in the event they did not report for work on June 2, 1958. The
free speech protection under the Constitution is inapplicable where the
expression of opinion by the employer or his agent contains a promise of
benefit, or threats, or reprisal.

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.

Others acts of employer constituting ULP

Likewise violative of the right to organize, form and join labor organizations
are the following acts: the offer of a Christmas bonus to all "loyal"
employees of a company shortly after the making of a request by the union
to bargain; wage increases given for the purpose of mollifying employees
after the employer has refused to bargain with the union, or for the purpose
of inducing striking employees to return to work; the employer's promises of
benefits in return for the strikers' abandonment of their strike in support of
their union; and the employer's statement, made about 6 weeks after the
strike started, to a group of strikers in a restaurant to the effect that if the
strikers returned to work, they would receive new benefits in the form of
hospitalization, accident insurance, profit-sharing, and a new building to
work in.

Test of interference of the employer to right of self-organization

The test of whether an employer has interfered with and coerced employees
within the meaning of subsection (a) (1) 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.

Delayed reinstatement is a form of discrimination

Delayed reinstatement is a form of discrimination in rehiring, as is having

the machinery of reinstatement in the hands of employees hostile to the
strikers, and reinstating a union official who formerly worked in a unionized
plant, to a job in another mill, which was imperfectly organized.

2. Foodbev International v. Ferrer GR No. 206795 9/16/2019 (Guzman)

FACTS: Petitioner Foodbev International (Foodbev) is a partnership engaged

in the food service industry by providing after-sales support for specialized
equipment, like hot and cold dispensers and displays. Respondent Foodbev
rank and file employees and members of Samahan ng Nagkakaisang
Manggagawa ng Foodbev International Central (Samahan), a labor union
established on May 31, 2008. Respondent Bernadette Belardo (Bernadette)
is a managerial employee and spouse of respondent Jever. She filed a
complaint for illegal dismissal, which was consolidated with the other cases.
From July 3 to 9, 2008, meetings were held between the union members,
Foodbev managers, and petitioner Lucila Dela Cruz (Lucila), Foodbev
president. Lucila asked their grievances and reasons in establishing a union,
and threatened to close Foodbev if the union activities persist. Lucila
reiterated to stop union activities and to withdraw from the union for the
sake of their jobs. Most of the union members did not resign, so Foodbev
castigated them by conducting a written examination exclusively for union
members. It was only after Galela complained that other nonunion-member
employees were made to take the examination. Those who failed the
examination were considered guilty of violating Article VI, Section C4 of
Foodbev's Code of Discipline on slowing down, dragging or limiting out. On
July 28, 2008, the five ice cream machine technicians filed a complaint for
illegal dismissal and money claims with the NLRC. On August 12, 2008,
Eroles returned from Isabela and reported for work at Foodbev's office in
Makati. He requested that his absence on August 11, 2008 be counted
against his leave credits. During the hearing, LA Azarraga advised the
respondents to secure the services of a lawyer, move for the dismissal of the
case before her, and to pursue the action filed before LA Que. On August 13,
2008, respondents filed a Notice of Dismissal or Withdrawal of Complaint
without Prejudice. Foodbev drew up a written offer of wage, sack of rice, and
canned corned beef to the 13 union members in exchange for a waiver.
Lucila instructed Eroles to take the day off the next day to convince the 13
respondents to accept their offer. On August 21, 2008, Eroles informed
Foodbev that their offer was rejected. On July 16, 2009, LA Que rendered a
decision dismissing the four consolidated complaints for violation of the rule
against forum shopping. The labor arbiter explained that while the filing of
consolidated cases before his branch initially involved dissimilar causes of
action from the cases filed before LA Azarraga, the subsequent amendment
of the complaints to include unfair labor practice, and the failure to inform
his branch of the status of the pending complaints was a violation of the rule
against forum shopping.
The NLRC established that respondents failed to disclose in their verification
that there were other pending cases before LA Azarraga, which is a violation
of the rule against forum shopping. The NLRC affirmed the dismissal of the
four complaints.

The CA affirmed the labor tribunal's finding that respondents committed

forum shopping. However, it deemed appropriate to resolve the substantial
issues presented as a dismissal on pure technicalities was frowned upon.

On the claim of unfair labor practice, the CA determined that Foodbev was
discouraging the formation of a union, and committed acts constituting
unfair labor practice based on the following evidence: the union's application
for registration, the minutes of the meeting between Foodbev's president
and/or managers and union members, the affidavits of Aquino and Pario, the
acts of Carpio and Brosas, the blotter report, the transfer of the union
president to Isabela, the show cause memo, and the notices of termination.

The CA ruled that the NLRC arbitrarily pronounced that there was no unfair
labor practice despite the lack of factual and legal bases. The CA resolved
that the burden to prove the validity of the dismissal rests on the employer,
and the proof must be based on substantial evidence. The CA found that
there was a dearth of evidence to prove that respondents refused to follow
instructions for their transfer to EMI. It was further revealed that nine of the
11 employees transferred to EMI were union members, which led the CA to
believe that the transfer was made to prevent them from conducting union
activities.

ISSUE:

1. WON there is illegal dismissal? - YES

2. WON there is union busting tantamount to ULP? - YES

RULING:

1. YES.

The respondents' dismissal on the ground of habitual absence lacks factual

basis and violates procedural requirements. However, this memo applies
only to the charge of gross negligence, and does not include the charge of
habitual absence, serious misconduct, and willful disobedience. Since
respondents were not formally charged of serious misconduct, fraud, and
willful breach of trust and confidence causing serious damage and prejudice
to the company, they were unable to defend their side and present evidence
on their behalf. The termination notice clearly violates respondents' rights to
due process. Article 297 of the Labor Code listed gross and habitual neglect
of duties by the employee as a ground for termination of his/her services.
Respondents did not exhibit acts constituting gross negligence, nor did
Foodbev cite other instances when respondents failed to perform assigned
tasks, signifying habitual negligence. There was no showing that
respondents had deliberate or thoughtless disregard for the cleaning
procedure. If at all, respondents are liable of simple negligence for failing to
use robby vapor in sanitizing the machine. The Court finds that respondent's
dismissal from employment is illegal due to several violations of procedural
and substantive requirements of the Labor Code and its Implementing Rules.
Bernadette's verbal termination from employment is a violation of her right
to security of tenure, and was done without just cause and due process
under Articles 294 and 297 of the Labor Code. Eroles is susceptible to being
transferred to another branch or company in the guise of training or
company practice, or verbal harassment similar to his dismissed co-workers.
The insinuations to resign and the successive termination from employment
of union members had created a hostile working environment, which
convinced him to sacrifice his employment and tantamount to constructive
dismissal.

2. YES

The records reveal several instances to support unfair labor practice,

specifically union busting, the Minutes of the Meetings disclose that as early
as July 2008, Lucila and Espeña had been discouraging the employees from
joining the union and in participating in union activities. These evidence on
record belie Foodbev's claim of ignorance on the existence of the union. The
fact that the examination was at first limited to union members is in itself an
unfair labor practice because it is discriminatory. Article 298 of the Labor
Code mandates the payment of separation pay to an employee terminated
from the service. Here, Foodbev's offer does not include separation pay,
which is contrary to law. The discussions above demonstrate Foodbev's
unfair labor practices, which create an unpleasant working atmosphere for
respondent union members and officers. They were targeted to take part in
a written examination, or prone to being transferred to another company or
to another branch. They were urged to file for resignation and accept a
measly compensation and goods, instead of full benefits under the law. If
these will not work, their employment will be terminated in order to dissolve
the union. The facts undeniably point to interference and restraining
respondents' right to self-organization, and discriminate their terms and
conditions of employment, as enumerated in paragraphs (a) and (e) of
Article 259 of the Labor Code.This further supports respondents' allegation
that they were targeted because of their union membership, and confirms
that Foodbev is liable for union busting.

3. Mendoza v. Officers of Manila Water Employees Union GR No. 201595

1/25/2016 (Guzman)

FACTS: Petitioner was a member of the Manila Water Employees Union

(MWEU), a (DOLE)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. In 2007,
MWEU through Cometa informed petitioner that the union was unable to
fully deduct the increased P200.00 union dues from his salary due to lack of
the required check-off authorization from him. Petitioner was warned that
his failure to pay the union dues would result in sanctions upon him. The
MWEU grievance committee recommended that petitioner be suspended for
30 days and was unanimously approved. The petitioner filed an appeal but
was denied. Petitioner was again penalized for a suspension and filed for an
appeal but was rejected. Consequently, MWEU scheduled an election of
officers and petitioner filed his certificate of candidacy for Vice-President, but
he was disqualified for not being a member in good standing on account of
his suspension. For the third time, petitioner was charged with non-payment
of union dues and for failure to attend the hearing, 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. In 2008, 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. In the
seeking recourse to the Labor Arbiter, NLRC and CA, the complaint for unfair
labor practices filed by Mendoza against respondents was dismissed on the
ground, among others, that the complaint covers intra-union disputes which
the mentioned authorities do not have jurisdiction. It also ruled that the
petitioner failed to provide substantial evidences on the violations of the
respondents against his right to appeal and self-organization.

ISSUE: Whether or not the respondents are guilty of unfair labor practice.

HELD:

Yes. The court ruled that the Labor Arbiter, NLRC and CA erred in failing to
resolve petitioner’s charge of unfair labor practices against respondents. It is
true that some of petitioner’s causes of action constitute intra-union cases
cognizable by the BLR under Article 226 of the Labor Code. However,
petitioner’s charge of unfair labor practices falls within the original and
exclusive jurisdiction of the Labor Arbiters, pursuant to Article 217 of the
Labor Code. Petitioner contends that respondents committed acts
constituting unfair labor practices – which charge was particularly laid out in
his pleadings, 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. In regard to
suspension of a union member, MWEU’s Constitution and By-Laws provides
under Article X, Section 4 thereof that 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 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 Court finds that petitioner was
illegally suspended for the second time and thereafter unlawfully expelled
from MWEU due to respondents’ failure to act on his written appeals. 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 in the 2007 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.

4. Cathay Pacific Steel v. CA GR No 164561 8/30/2006 (Tagudando)

DOCTRINE
Article 212(m) of the Labor Code, as amended, differentiates supervisory employees from
managerial employees, to wit: supervisory employees are those who, in the interest of the
employer, effectively recommend such managerial actions, if the exercise of such authority is
not merely routinary or clerical in nature but requires the use of independent judgment;
whereas, managerial employees are those who are vested with powers or prerogatives to lay
down and execute management policies and/or hire, transfer, suspend, lay off, recall,
discharge, assign or discipline employees.

FACTS
On February 16, 1990, petitioner Cathay Pacific Steel Corporation (CAPASCO) employed
Tamondong as Assistant to the Personnel Manager for its Cainta Plant. He was later elevated to
the position of Personnel/Administrative Officer, and then to Personnel Superintendent.
CAPASCO supervisory staff began organizing a union among its ranks in June 1996, afterwards
known as private respondent CAPASCO Union of Supervisory Employees (CUSE). Private
respondent Tamondong was an enthusiastic participant in the union's establishment and was
even elected as one of its officers when it was established.

As a result, petitioner CAPASCO issued private respondent Tamondong a document

demanding him to explain and cease his union activities, along with a warning that continuing to
do so might jeopardize his employment with the corporation. Private respondent Tamondong
disregarded the warning and wrote back, claiming his right to join and organize a labor union as
a supervisory employee. As a result, petitioner CAPASCO terminated private respondent
Tamondong's job on the basis of loss of faith and confidence on February 6, 1997,
characterizing his union activities as acts constituting serious disloyalty to the corporation.

Tamondong, a private respondent, claimed that his firing was unjustified and based exclusively
on his involvement and active participation in the creation of CAPASCO's supervisory
employees union. He maintained that this was not a viable reason for his dismissal because he
was exercising his constitutionally protected right to self-organization.

Petitioner CAPASCO, on the other hand, argued that because of private respondent
Tamondong's position as Personnel Superintendent and the functions he actually performed in
the company, he was considered a managerial employee and thus barred from joining a union
or being elected as one of its officers under the law. The LA decided in Tamondong's favor. The
NLRC later changed the decision and granted the appeal. Tamandong's certiorari petition

ISSUE/S
Was Tamondong illegally dismissed for joining the said union?

RULING
YES. Tamondong's dismissal was unconstitutional since he was denied his right to self-
organization through union membership. Because the findings of the Court of Appeals that
private respondent Tamondong was indeed a supervisory employee and not a managerial
employee, thus eligible to join or participate in the union activities of private respondent CUSE,
were supported by evidence on record, the Court of Appeals cannot be said to have acted with
grave abuse of discretion amounting to lack or excess of jurisdiction in annulling the NLRC
Decision.

The Memorandum obliged private respondent Tamondong to work fixed daily working hours
from 8:00 a.m. to 12:00 p.m. and 1:00 p.m. to 5:00 p.m., according to the Court of Appeals'
decision. According to the Court of Appeals, this imposition on private respondent Tamondong
is uncharacteristic of a managerial employee. The Court of Appeals referenced the case of
Engineering Equipment, Inc. v. NLRC, in which the Court concluded that one of the basic
characteristics of a managerial employee is that he is not subjected to the strict adherence of
regular office hours or maximum hours of work.
 5. Cainta Catholic School v. Cainta Catholic School Employees Union GR
15102 5/4/2006 (Tagudando)

DOCTRINE
Retirement is distinct from dismissal for just or authorized reasons as defined by Articles 282
and 283 of the Labor Code. In both of these cases, the employer must show the existence of
just or authorized dismissal as defined by the Labor Code. Retirement, on the other hand, is the
outcome of a voluntary agreement between the employer and the employee, whereby the latter
agrees and/or consents to discontinue his employment with the former after attaining a specific
age.
FACTS
Cainta Catholic School (School) and the Cainta Catholic School Employees Union have
reached an agreement (CCSEU). Llagas and Javier were elected as President and Vice-
President, respectively, at the Union's election of officials. Following that, the School, in
accordance with Section 2, Article X of the CBA, retired Llagas and Javier after more than 20
years of continuous service:

An employee may be retired, either upon application by the employee himself or by the decision
of the Director of the School, upon reaching the age of 60 or after having rendered at least 20
years of service to the School the last 3 years of which must be continuous.

The Union filed a strike notice with the NCMB three days later. The Union went on strike and
picketed the School's entrances afterwards.

ISSUE/S
Was Llagas and Javier’s forced retirement a valid exercise of management prerogative?

RULING
YES. Retirement is the outcome of a voluntary agreement between the employer and the
employee, in which the latter agrees and/or consents to discontinue his employment with the
former after attaining a particular age. The Union and its members are obligated to abide by the
commitments and constraints they agreed to yield to management by accepting the CBA. The
disputed retirement terms cannot be viewed as an imposition on the Union, which had every
right to reject to consent to management's ability to retire personnel with at least 20 years of
service.

The exercise by the employer of a lawful and duly established prerogative to retire an employee
does not constitute unfair labor practice in the case of Philippine Airlines.
6. Purefoods v. Nagkakaisang Samahang Mangagawa ng Purefoods GR
No. 150896 8/28/2008 (Sarmiento)

Facts:

-Three labor organizations and a federation are respondents in this case'

Nagkakaisang Samahang Manggagawa Ng Purefoods Rank-And-File
(NAGSAMA-Purefoods), the exclusive bargaining agent of the rank-and-file
workers of Purefoods' meat division throughout Luzon; St. Thomas Free Workers
Union (STFWU), of those in the farm in Sto. Tomas, Batangas; and Purefoods
Grandparent Farm Workers Union (PGFWU), of those in the poultry farm in Sta.
Rosa, Laguna.

-February 8, 1995, NAGSAMA-Purefoods manifested to petitioner

corporation its desire to re-negotiate the collective bargaining agreement (CBA)
then due to expire on the 28th of the said month.

-STFWU and PGFWU also submitted their respective proposals for CBA
renewal, and their general membership resolutions which, among others,
affirmed the two organizations' affiliation with PULO.

-On July 24, 1995, however, the petitioner company concluded a new
CBA with another union in its farm in Malvar, Batangas.

-following day, the regular rank-and-file workers in the Sto. Tomas farm
were refused entry in the company premises; and on July 31, 1995, 22 STFWU
members were terminated from employment.

-Aggrieved by these developments, the four respondent labor organizations

jointly instituted a complaint for unfair labor practice (ULP), illegal
lockout/dismissal and damages,

-LA rendered a Decision dismissing the complaint,

-appeal, the NLRC reversed the ruling of the LA,

-company's refusal to recognize the labor organizations' affiliation with

PULO was unjustified considering that the latter had been granted the status of a
federation by the Bureau of Labor Relations; and that this refusal constituted
undue interference in, and restraint on the exercise of the employees' right to
self-organization and free collective bargaining.
 -real motive of the company in the sudden closure of the Sto. Tomas farm
and the mass dismissal of the STFWU members was union busting, as only the
union members were locked out, and the company subsequently resumed
operations of the closed farm under a new contract with the landowner. Because
the requisites of a valid lockout were absent, the NLRC concluded that the
company committed ULP

-MOR: petitioner corporation, in its motion for reconsideration before the

appellate court and in its petition before us, did not present a reasonable
explanation for its non-compliance with the rules. Further, it cannot be said that
petitioner substantially complied therewith, because it did not attach to its motion
for reconsideration any proof of the authority of its signatory

Issue:

WON the refusal of Purefoods to recognized PULO as a labor organizations’

affiliation constituted undue interference in, and restraint on the exercise of the
employees’ right to self-organization and free collective bargaining?

Decision:

YES, crystal clear that the closure of the Sto. Tomas farm was made in bad faith.
Badges of bad faith are evident from the following acts of the petitioner:
-it unjustifiably refused to recognize the STFWU's and the other unions'
affiliation with PULO;
-it concluded a new CBA with another union in another farm during the
agreed indefinite suspension of the collective bargaining negotiations;
-it surreptitiously transferred and continued its business in a less hostile
environment;
-and it suddenly terminated the STFWU members, but retained and
brought the non-members to the Malvar farm.
-Petitioner presented no evidence to support the contention that it was
incurring losses or that the subject farm's lease agreement was pre-terminated.
-the closure of the Sto. Tomas farm circumvented the labor
organization's right to collective bargaining and violated the members' right to
security of tenure.

Petitioner company is ordered to: (1) reinstate the illegally dismissed STFWU
members and pay them full backwages from the time of illegal termination up to actual
reinstatement; (2) if reinstatement is no longer feasible, pay the illegally dismissed
STFWU members their separation pay equivalent to one month pay, or one-half month
pay for every year of service, whichever is higher; and (3) pay moral and exemplary
damages in the aggregate amount of P500,000.00 to the said illegally dismissed
STFWU members.
 7. BPI Employees Union-Davao City-FUBU v. BPI GR No 174912
7/24/2013 (Sarmiento)

Facts:

-Service agreement between BPI and BOMC was initially implemented in

BPI’s 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.

-Manila chapter of BPI Employees Union (BPIEU-Metro Manila-FUBU)

then filed a complaint for unfair labor practice (ULP). The Labor Arbiter (LA)
decided the case in favor of the union. The decision was, however, reversed on
appeal by the NLRC. BPIEU-Metro Manila-FUBU filed a petition for certiorari
before the CA which denied it, holding that BPI transferred the employees in the
affected departments in the pursuit of its legitimate business.

-January 1, 1996, the service agreement was likewise implemented in

Davao City.

-BPI’s cashiering function and FEBTC’s cashiering, distribution and

bookkeeping functions were handled by BOMC. Consequently, twelve (12)
former FEBTC employees were transferred to BOMC

-BPI Davao’s 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

-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.

-December 21, 2001, the NLRC came out with a resolution upholding the
validity of the service agreement between BPI and BOMC and dismissing the
charge of ULP.

-Not satisfied, the Union filed a motion for reconsideration which was,
however, denied by the CA.

Issue:
Whether the act of BPI to outsource the cashiering, distribution and
bookkeeping functions to BOMC is in conformity with the law?
 Decision:

Yes - contracting out of services is not illegal per se. 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.

Clearly, only gross violations of the economic provisions of the CBA are treated
as ULP. Otherwise, they are mere grievances-union shop agreement in the CBA, even
assuming it was malicious and flagrant, is not a violation of an economic provision in the
agreement

-It failed to take into consideration its recognition of the bank’s exclusive rights
and prerogatives, likewise provided in the CBA, which included the hiring of employees,
promotion, transfers, and dismissals for just cause and the maintenance of order,
discipline and efficiency in its operations.

-hand, the union has not presented even an iota of evidence that petitioner bank
has started to terminate certain employees, members of the union. In fact, what appears
is that the Bank has exerted utmost diligence, care and effort to see to it that no union
member has been terminated.

-BPI stresses that not a single employee or union member was or would be
dislocated or terminated from their employment as a result of the Service Agreement.
Neither had it resulted in any diminution of salaries and benefits nor led to any reduction
of union membership.

--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

-WHEREFORE, the petition is DENIED

8. CEPALCO v. CEPALCO Employees Labor Union GR No. 211015

6/20/2016 (Ibarra)

FACTS Respondent is the duly certified bargaining representative of CEPALCO's

regular rank-and-file employees. CEPALCO and CESCO (petitioners) entered into a Contract
for Meter Reading Work where CESCO undertook to perform CEPALCO's meter-reading
activities. As a result, several employees and union members of CEPALCO were relieved,
assigned in floating positions, and replaced with CESCO workers, prompting respondent to file
a complaint for ULP against petitioners. Respondent alleged that when CEPALCO engaged
CESCO to perform its meter-reading activities, its intention was to evade its responsibilities
under the CBA and labor laws, and that it would ultimately result in the dissipation of
respondent's membership in CEPALC0. It further averred that for engaging in labor-only
contracting, the workers placed by CESCO must be deemed regular rank-and-file employees of
CEPALCO, and that the Contract for Meter Reading Work be declared null and void. Petitioners
averred that CESCO is an independent job contractor and that the contracting out of the meter-
reading services did not interfere with CEPALCO's regular workers' right to selforganize,
denying that none of respondent's members was put on floating status. They argued that the
case is only a labor standards issue, and that respondent is not the proper party to raise the
issue regarding the status of CESCO's employees and, hence, cannot seek that the latter be
declared as CEPALCO's regular employees. The LA dismissed the complaint for lack of merit. It
found that petitioners have shown by substantial evidence that CESCO carries on an
independent business of contracting services, in this case for CEPALCO's meter-reading work,
and that CESCO has an authorized capital stock of Pl00,000,000.00, as well as equipment and
materials necessary to carry out its business. As an independent contractor, CESCO is the
statutory employer of the workers it supplied to CEP ALCO pursuant to their contract. The
NLRC affirmed the LA's ruling in toto.

CEPALCO and CESCO entered into another Contract of Service, this time for the
warehousing works of CEPALCO. Alleging that three union members who were assigned at the
warehouse of the logistics department were transferred to other positions and departments
without their conformity and, eventually, were replaced by workers recruited by CESCO,
respondent filed another complaint for ULP against petitioners. Petitioners posited that
CEPALCO did not engage in ULP when it contracted out its warehousing works and that
CESCO is an independent contractor. They further reiterated that respondent is not the proper
party to seek any form of relief for the CESCO employees. The LA dismissed the case for lack
of merit, citing its earlier decision. It explained that the only difference between the previous
case and the present case was that in the former, CEPALCO contracted out its meter-reading
activities, while in the latter, it contracted out its warehousing works. However, both cases
essentially raised the same issue between the same parties – whether or not the contracting out
of services being performed by the union members constitute ULP. The NLRC affirmed the LA's
ruling in toto. With respect to the first case, the CA partially granted respondent's certiorari
petition and reversed and set aside the assailed NLRC issuances. The CA found that CESCO
was engaged in labor-only contracting in view of the following circumstances: a) There was
absolutely no evidence to show that CESCO exercised control over its workers, as it was
CEPALCO that established the working procedure and methods, supervised CESCO's workers,
and evaluated them; b) There is no substantial evidence to show that CESCO had substantial
capitalization as it only had a paid-up capital of P5l ,OOO.OO, and there was nothing on
CESCO's list of machineries and equipment that could have been used for the performance of
the meterreading activities contracted out to it; c) The workers of CESCO performed activities
that are directly related to CEPALCO's main line of business. Consequently, the workers hired
by CESCO pursuant to the service contract for the meter-reading activities were declared
regular employees of CEP ALCO. The CA found no substantial evidence that CEPALCO was
engaged in ULP, there being no showing that when it contracted out the meter-reading activities
to CESCO, CEPALCO was motivated by ill will, bad faith or malice, or that it was aimed at
interfering with its employees' right to self-organization.

As to the second case, the CA partially granted respondent's petition, finding that
CESCO was a labor-only contractor as it had no substantial capitalization, as well as tools,
equipment, and machineries used in the work contracted out by CEPALCO. As such, CESCO is
merely an agent of CEPALCO, and that the latter is still responsible to the workers recruited by
CESCO in the same manner and extent as if those workers were directly employed by
CEPALC0. Same as the ruling in the first case, the CA found that CEPALCO committed no ULP
for lack of substantial evidence to establish the same.

ISSUES In both cases, petitioners averred that: 1) CA erred in declaring CESCO as a

labor-only contractor notwithstanding the fact that CEPALCO has already been absolved of the
charges of ULP. Petitioners argue that the issue of whether or not CESCO is an independent
contractor was mooted by the finality of the finding that there was no ULP on the part of
CEPALCO. 2) CEPALCO's contracting arrangements with CESCO did not amount to ULP. 3)
Respondent is not a party-in-interest in this issue because the declaration of the CA that the
employees of CESCO are considered regular employees will not even benefit the respondent. If
there is anyone who stands to benefit from such rulings, they are the employees of the CESCO
who are not impleaded in these cases.

HELD CESCO is a labor-only contractor Under Article 106 of the Labor Code, as
amended, labor-only contracting is an arrangement where the contractor, who does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises,
among others, supplies workers to an employer and the workers recruited are performing
activities which are directly related to the principal business of such employer. Labor-only
contracting is considered as a form of ULP when the same is devised by the employer to
"interfere with, restrain or coerce employees in the exercise of their rights to self-organization."

In these cases, the Court agrees with the CA that CEPALCO was engaged in labor-only
contracting as its Contract for Meter-Reading Work and Contract of Service To Perform
Warehousing Works with CESCO fit the criteria provided for in Section 5 of DO 18-02, to be
specific, petitioners failed to show that CESCO has substantial capital or investment which
relates to the job, work or service to be performed.  While it is true that: (a) CESCO's
Amended Articles of Incorporation shows that CESCO's authorized capital stock is
P200,000,000.00, which was increased from Pl00,000,000.00; and (b) its financial statements
shows that its paid-up capital stock is in the sum of P81,063,000.00, there is no available
document to show CESCO's authorized capital stock at the time of the contracting out of
CEPALCO's meter-reading activities to CESCO.  The increases in its authorized capital stock
and paid-up capital were only made after the execution of the Contract for Meter-Reading Work,
hence, are only relevant with regard to the time CEPALCO contracted out its warehousing
works to CESCO. Since the amount of CESCO's authorized capital stock at the time CEPALCO
contracted out its meter-reading activities was not shown, the Court has no means of
determining whether it had substantial capital at the time the contract therefor was entered into.
 Furthermore, the list of CESCO's office equipment, furniture and fixtures, and vehicles offered
in evidence by petitioners does not satisfy the requirement that they could have been used in
the performance of the specific work contracted out. o As the CA aptly pointed out, the tools and
equipment utilized by CESCO in the meter-reading activities are owned by CEPALCO,
emphasizing the fact that CESCO has no basic equipment to carry out the service contracted
out by CEP ALCO.  Although it may be said that CESCO had substantial capital when
CEPALCO contracted out its warehousing works, there is, however, lack of credible evidence to
show that CESCO had the aforesaid substantial investment in the form of equipment, tools,
implements, machineries, and work premises to perform the warehousing activities on its own
account. It is also evident that meter-reading is a job that is directly related to the main business
of CEPALCO, considering that the latter is an electric distribution utility, which is necessarily
tasked with the evaluation and appraisal of meters in order to bill its clients.  Similarly,
warehousing works is directly related to CEPALCO's electric distribution business, which
involves logistics, inventories, accounting, billing services, and other related operations.
Records are devoid of evidence to prove that the work undertaken in· furtherance of the
meterreading contract was made under the sole control and supervision of CESCO. Instead, as
noted by the CA, it was CEPALCO that established the working procedure and methods and
supervised CESCO's workers in their tasks.  No evidence has been offered to establish that
CESCO exercised control with respect to the manner and methods of achieving the
warehousing works, or that it supervised the workers assigned to perform the same.

CEPALCO's contracting arrangements with CESCO did not amount to ULP Respondent
was not able to present any evidence to show that such arrangements violated CEPALCO's
workers' right to self-organization, which, constitutes the core of ULP. Records do not show that
this finding was further appealed by respondent. Thus, the complaints filed by respondent
should be dismissed with finality.

Respondent is not a real party-in-interest While respondent did ask for the nullification of
the subject contracts between petitioners, and even sought that the employees provided by
CESCO to CEPALCO be declared as the latter's own employees, petitioners correctly argue
that respondent is not a real party-in-interest and hence, had no legal standing insofar as these
matters are concerned. This is because respondent failed to demonstrate how it stands to be
benefited or injured by a judgment on the same, or that any personal or direct injury would be
sustained by it if these reliefs were not granted. If at all, it would be the employees of CESCO
who are entitled to seek the foregoing reliefs since in cases of labor-only contracting, "the
person or intermediary shall be considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if the latter were directly employed
by him." However, they have not been impleaded in these cases.
 9. PICOP v. Taneca GR No. 160828 8/9/2010 (Ibarra)

PICOP Resources Inc vs Taneca

GR 160828
 Facts:
 Respondents were regular rank-and-file employees of PRI and bona fide members
of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-
SPFL), which is the collective bargaining agent for the rank-and-file employees of petitioner PRI.
PRI has a CBA with NAMAPRI-SPFL. The CBA contained the following union security
provisions:
Article II- Union Security and Check-Off
Section 6. Maintenance of membership.
6.1 All employees within the appropriate bargaining unit who are members of the UNION at the
time of the signing of this AGREEMENT shall, as a condition of continued employment by the
COMPANY, maintain their membership in the UNION in good standing during the effectivity of
this AGREEMENT.6.3 The COMPANY, upon the written request of the UNION and after
compliance with the requirements of the New Labor Code, shall give notice of termination of
services of any employee who shall fail to fulfill the condition provided in Section 6.1 and 6.2 of
this Article
Atty. Fuentes sent a letter to the management of PRI demanding the termination of employees
who allegedly campaigned for, supported and signed the Petition for Certification Election of the
Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL
considered said act of campaigning for and signing the petition for certification election of FFW
as an act of disloyalty and a valid basis for termination for a cause in accordance with its
Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article II,
Sections 6.1 and 6.2 on Union Security Clause.On October 16, 2000, PRI served notices of
termination for causes to employees whom NAMAPRIL-SPFL sought to be terminated on the
ground of “acts of disloyalty” committed against it when respondents allegedly supported and
signed the Petition for Certification Election of FFW before the “freedom period” during the
effectivity of the CBA. A Notice dated October 21, 2000 was also served on the DOLE, Caraga
Region.Respondents then accused PRI of ULP. 
Issue: WON respondents were validly terminated.
Held:
 “Union security” is a generic term, which is applied to and comprehends “closed shop,” “union
shop,” “maintenance of membership,” or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment. There is union shopwhen all new regular employees are required to join the union
within a certain period as a condition for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or transferred out of the bargaining
unit, or the agreement is terminated. A closed shop may be defined as an enterprise in which,
by agreement between the employer and his employees or their representatives, no person may
be employed in any or certain agreed departments of the enterprise unless he or she is,
becomes, and, for the duration of the agreement, remains a member in good standing of a
union entirely comprised of or of which the employees in interest are a part.
 However, in terminating the employment of an employee by enforcing the union security
clause, the employer needs to determine and prove that: (1) the union security clause is
applicable; (2) the union is requesting for the enforcement of the union security provision in the
CBA; and (3) there is sufficient evidence to support the decision of the union to expel the
employee from the union. These requisites constitute just cause for terminating an employee
based on the union security provision of the CBA.
 As to the first requisite, there is no question that the CBA between PRI and respondents
included a union security clause. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in
two (2) occasions demanded from PRI, in their letters dated May 16 and 23, 2000, to terminate
the employment of respondents due to their acts of disloyalty to the Union. However, as to the
third requisite, we find that there is no sufficient evidence to support the decision of PRI to
terminate the employment of the respondents. The mere signing of the authorization in support
of the Petition for Certification Election of FFW on March 19, 20 and 21, or before the “freedom
period,” is not sufficient ground to terminate the employment of respondents inasmuch as the
petition itself was actually filed during the freedom period. Nothing in the records would show
that respondents failed to maintain their membership in good standing in the Union.
Respondents did not resign or withdraw their membership from the Union to which they belong.
Respondents continued to pay their union dues and never joined the FFW. Petition
denied.

10. NUWHRAIN v. NLRC GR No. 179402 8/30/2008 (Buedron)

NUWHRAIN v. NLRC G.R. No. 179402

September 30, 2008

Types of union security provisions

FACTS:

· Acesite Phil Hotel Corp. (Hotel) entered into a CBA with Hi-Manila Pavilion
Hotel Labor Union (HIMPHLU), the SEBA of R&F employees of the Hotel.
The parties agreed that the effectivity of the representation and non-
economic provisions will be for 5 years, while economic provisions will
be effective for 3 years. The latter was later on extended for another 2
 years, such that all provisions will be effective until June 30 2005.

· During the freedom period, HIMPHLU negotiated an extension of the

CBA’s effectivity for another 2 years, the MoA of which was signed and
ratified on May 20 and 27, respectively. Thereafter, NUWHRAIN was
registered as a legit labor org and filed a petition for certification
election.

· After the lapse of the freedom period, but pending disposition of the PCE,
HIMPHLU served the Hotel a written demand, together with an
investigation report, for the dismissal of 36 employees, following their
expulsion from the said union for alleged acts of disloyalty and violation
of its CBL. These employees, who were members of HIMPHLU, joined
NUWHRAIN, in violation of the union security clause.

· The Hotel then sent these employees notices, directing them to submit a
written explanation. It also called the unions and employees concerned
for a reconciliatory conference in order to avoid dismissal. However,
NUWHRAIN proceeded to file a notice of strike on the ground of ULP.

· NUWHRAIN: Hotel committed ULP when it issued notices to the 36

employees who switched allegiance. During the conference, VP Azores
stated her preference to deal with HIMPHLU and blamed NUWHRAIN for
its labor problems. Hotel’s Resident Manager, Corpuz, implored
NUWHRAIN members to withdraw the PCE and reaffirm their
membership in HIMPHLU.

· Hotel: Only complied with its contractual obligations with HIMHPLU and
that none of the 36 were dimissed. Moreover, it denied the alleged
statements made by Azores and Corpuz.

· NLRC:

Not guilty. 1) MoA was entered into to address the employee’s economic
needs, not to interfere or restrain the right to freedom of association; 2)
Notices were issued in compliance with the CBA; 3) statements made during
the conference were interpreted as merely proposed solutions to avoid the
dismissal of the employees. These statements do not constitute ULP for they
could not have coerced or influenced either of the unions, both of whom did
 not agree to the suggested course of action; and 4) claim for exemplary and
moral damages lacked sufficient bases. MR denied. In the meantime, the CE
was held wherein HIMPHLU won.

· CA:

Hotel acted prudently in issuing the Notices to the 36 employees after

HIMPHLU demanded their dismissal. Notices did not amount to the
termination, but merely sought their explanation on why the union security
clause should not be applied to them. It also gave credence to the denial made
by the Hotel’s officers re: statements made during the conference.

ISSUES: WoN the Hotel is guilty of ULP.

HELD:

No.

Section 2. DISMISSAL PURSUANT TO UNION SECURITY CLAUSE. Accordingly,

failure to join the UNION within the period specified in the immediately preceding
section or failure to maintain membership with the UNION in good standing either
through resignation or expulsion from the UNION in accordance with the UNION’s
Constitution and bylaws due to disloyalty, joining another union or nonpayment
of UNION dues shall be a ground for the UNION to demand the dismissal from the
HOTEL of the employee concerned. The demand shall be accompanied by the
UNION’s investigation report and the HOTEL shall act accordingly subject to
existing laws and jurisprudence on the matter, provided, however, that the UNION
shall hold the HOTEL free and harmless from any and all liabilities that may arise
should the dismissed employee question in any manner the dismissal. The
HOTEL shall not, however, be compelled to act on any such UNION demand if
made within a period of sixty (60) days prior to the expiry date of this agreement.
· “Union security” is a generic term which is applied to and comprehends “closed
shop,” “union shop,” “maintenance of membership” or any other form of
agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment, which is recognized
under Art. 248(e) of the LC.

· The law allows for such stipulations as a means of encouraging workers

to join and support the union of their choice in the protection of their
rights and interests visàvis the employer. In promoting unionism,
workers are able to negotiate with management on an even playing field
and with more persuasiveness than if they were to individually and
separately bargain with the employer.

· Villar v. Inciong: Employees have the right to disaffiliate from their union
and form a new organization of their own; however, they must suffer the
consequences of their separation from the union under the security
clause of the CBA.

· To avoid the clear possibility of liability for breaching the union security
clause and to protect its own interest, the only sensible option for the
Hotel upon its receipt of the demand for dismissal, was to conduct its
own inquiry on WoN there was sufficient ground to dismiss the said
employees who defected from HIMPHLU. Moreover, the hotel did not
take further steps to terminate the said employees. Instead, it arranged
a reconciliatory conference between the contending unions to avoid the
possibility of dismissal.

· GR: The dismissal of an employee by the company pursuant to a labor

union’s demand in accordance with a union security agreement does
not constitute ULP. An employer is not considered guilty thereof if it
merely complied in good faith with the request of the certified union for
the dismissal of employees expelled from the union pursuant to the
union security clause in the CBA. There is even less possibility of
 sustaining a finding of guilt for ULP when the employer did not in fact
dismiss the employees.

· Re: statements uttered by hotel officers: NUHWRAIN has the burden of

proving that the named officers did make the statements attributed to
them. It failed to discharge such burden. It merely presented a single
sworn statement signed by 6 of its union members, who, undoubtedly,
have a natural bias towards their union, which puts their credibility into
question. Morever, findings of fact of quasi judicial agencies are given
much weight and considered conclusive. Withdrawal of the PCE and re-
acceptance by HIMHPLU of the employees without sanctions were
merely proposals to settle the dispute. Furthermore, NUHWRAIN
admitted that before issuing the notices, the hotel maintained a neutral
stand.

Petition DENIED.

11. BPI v. BPI Employees Union-Davao Chapter GR No. 164301 8/10/2010

(Buedron)

BPI vs. BPI Employees Union-Davao Chapter, G.R. No. 164301, August 10, 2010

Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC
were transferred to and absorbed by BPI as the surviving corporation. FEBTC
employees, including those in its different branches across the country, were
hired by petitioner as its own employees, with their status and tenure recognized
and salaries and benefits maintained.

Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI

Unibank (hereinafter the Union, for brevity) is the exclusive bargaining agent of
BPIs rank and file employees in Davao City. The former FEBTC rank-and-file
employees in Davao City did not belong to any labor union at the time of the
merger

Prior to the effectivity of the merger, respondent Union invited said FEBTC
employees to a meeting regarding the Union Shop Clause.
 Section 2. Union Shop - New employees falling within the bargaining
unit as defined in Article I of this Agreement, who may hereafter be
regularly employed by the Bank shall, within thirty (30) days after
they become regular employees, join the Union as a condition of
their continued employment. It is understood that membership in
good standing in the Union is a condition of their continued
employment with the Bank. (Emphases supplied.)

Respondent Union then sent notices to the former FEBTC employees who
refused to join, as well as those who retracted their membership, and called them
to a hearing regarding the matter. When these former FEBTC employees refused
to attend the hearing, the president of the Union requested BPI to implement the
Union Shop Clause of the CBA and to terminate their employment pursuant
thereto.

Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision dated

November 23, 2001, ruled in favor of petitioner BPIs interpretation that the former
FEBTC employees were not covered by the Union Security Clause of the CBA
between the Union and the Bank on the ground that the said employees were not
new employees who were hired and subsequently regularized, but were absorbed
employees by operation of law because the former employees of FEBTC can be
considered assets and liabilities of the absorbed corporation. The Voluntary
Arbitrator concluded that the former FEBTC employees could not be compelled to
join the Union, as it was their constitutional right to join or not to join any
organization.

ISSUE:

Whether or not the former FEBTC employees that were absorbed by

petitioner upon the merger between FEBTC and BPI should be covered by the
Union Shop Clause found in the existing CBA between petitioner and respondent
Union.

HELD:

Section 2, Article II of the CBA is silent as to how one becomes a regular

employee of the BPI for the first time.There is nothing in the said provision which
requires that a new regular employee first undergo a temporary or probationary
status before being deemed as such under the union shop clause of the CBA.
Union security is a generic term which is applied to and comprehends closed
shop, union shop, maintenance of membership or any other form of agreement
which imposes upon employees the obligation to acquire or retain union
membership as a condition affecting employment.

There is union shop when all new regular employees are required to join the
union within a certain period for their continued employment.

There is maintenance of membership shop when employees, who are union

members as of the effective date of the agreement, or who thereafter become
members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or
the agreement is terminated.

A closed-shop, on the other hand, may be defined as an enterprise in which, by

agreement between the employer and his employees or their representatives, no
person may be employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the
employees in interest are a part.

In other words, the purpose of a union shop or other union security

arrangement is to guarantee the continued existence of the union through
enforced membership for the benefit of the workers.

Absorbed FEBTC Employees are Neither Assets nor Liabilities.

In legal parlance, however, human beings are never embraced in the term assets
and liabilities. Moreover, BPIs absorption of former FEBTC employees was
neither by operation of law nor by legal consequence of contract. There was no
government regulation or law that compelled the merger of the two banks or the
absorption of the employees of the dissolved corporation by the surviving
corporation. Had there been such law or regulation, the absorption of employees
of the non-surviving entities of the merger would have been mandatory on the
surviving corporation. In the present case, the merger was voluntarily entered
into by both banks presumably for some mutually acceptable consideration.
In fact, the Corporation Code does not also mandate the absorption of the
employees of the non-surviving corporation by the surviving corporation in the
case of a merger.
Proper Appreciation of the Term New Employees Under the CBA.

In any event, it is of no moment that the former FEBTC employees retained

the regular status that they possessed while working for their former employer
upon their absorption by petitioner. This fact would not remove them from the
scope of the phrase new employees as contemplated in the Union Shop Clause of
the CBA, contrary to petitioners insistence that the term new employees only
refers to those who are initially hired as non-regular employees for possible
regular employment.

The Union Shop Clause in the CBA simply states that new employees who
during the effectivity of the CBA may be regularly employed by the Bank must
join the union within thirty (30) days from their regularization. There is nothing in
the said clause that limits its application to only new employees who possess
non-regular status, meaning probationary status, at the start of their employment.
Petitioner likewise failed to point to any provision in the CBA expressly excluding
from the Union Shop Clause new employees who are absorbed as regular
employees from the beginning of their employment. What is indubitable from the
Union Shop Clause is that upon the effectivity of the CBA, petitioners new regular
employees (regardless of the manner by which they became employees of BPI)
are required to join the Union as a condition of their continued employment.

No Substantial Distinction Under the CBA Between Regular Employees Hired

After Probationary Status and Regular Employees Hired After the Merger.

They both enjoy benefits that the Union was able to secure for them under the
CBA. When they both entered the employ of BPI, the CBA and the Union Shop
Clause therein were already in effect and neither of them had the opportunity to
express their preference for unionism or not. We see no cogent reason why the
Union Shop Clause should not be applied equally to these two types of new
employees, for they are undeniably similarly situated.

PURPOSE OF UNION SECURITY CLAUSE

Indeed, a union security clause in a CBA should be interpreted to give

meaning and effect to its purpose, which is to afford protection to the certified
bargaining agent and ensure that the employer is dealing with a union that
represents the interests of the legally mandated percentage of the members of
the bargaining unit.

The union shop clause offers protection to the certified bargaining agent
by ensuring that future regular employees who

(a) enter the employ of the company during the life of the CBA;

(b) are deemed part of the collective bargaining unit; and

c) whose number will affect the number of members of the collective

bargaining unit will be compelled to join the union.

· Such compulsion has legal effect, precisely because the employer

by voluntarily entering in to a union shop clause in a CBA with
the certified bargaining agent takes on the responsibility of
dismissing the new regular employee who does not join the
union.

Right of an Employee not to Join a Union is not Absolute and Must Give
Way to the Collective Good of All Members of the Bargaining Unit.

Time and again, this Court has ruled that the individual employees right
not to join a union may be validly restricted by a union security clause in a CBA
and such union security clause is not a violation of the employees constitutional
right to freedom of association. Laws and jurisprudence promote unionism and
afford certain protections to the certified bargaining agent in a unionized
company because a strong and effective union presumably benefits all
employees in the bargaining unit since such a union would be in a better position
to demand improved benefits and conditions of work from the employer.

settled jurisprudence has already swung the balance in favor of unionism, in

recognition that ultimately the individual employee will be benefited by that
policy. In the hierarchy of constitutional values, this Court has repeatedly held
that the right to abstain from joining a labor organization is subordinate to the
policy of encouraging unionism as an instrument of social justice.

CONCLUSION
 Union Shop Clause of the CBA covers the former FEBTC employees who
were hired/employed by BPI during the effectivity of the CBA in a manner which
petitioner describes as absorption.
 12. JAIME BILAN MONTEALEGRE AND CHAMON'TE, INC., PETITIONERS, v.
SPOUSES ABRAHAM AND REMEDIOS DE VERA, RESPONDENTS.

(G.R. No. 208920, July 10, 2019)

Jerson Servandil (Servandil) filed a complaint for illegal dismissal against A. De

Vera Corporation (Corporation). The case was referred to the National Labor
Relations Commission (NLRC) and raffled to Labor Arbiter (LA) Joel Lustria.

On November 27, 2003, the LA rendered a Decision against the Corporation, finding
it guilty of illegal dismissal and holding it liable to Servandil for backwages,
separation pay and unpaid salary. ibrary

The corporation filed an appeal before the NLRC, which was dismissed for lack of
jurisdiction because of the failure to post the appeal bond. The NLRC also denied
the corporation's motion for reconsideration.

The CA likewise denied the petition for certiorari filed before it. When the case was
elevated to the Supreme Court, the petition was denied.

Meanwhile, the NLRC issued an Entry of Judgment declaring that its January 31,
2005 Resolution had become final and executory.

Thereafter, a Writ of Execution was issued commanding the sheriff to proceed

against the movable and immovable properties of the corporation and respondent
Abraham De Vera. When it was returned unsatisfied, Servandil moved for the
issuance of an alias writ of execution which was granted.

Pursuant to this writ, a parcel of land (property) registered in the name of

c

respondents was levied upon and sold to petitioners Jaime Bilan Montealegre and
Chamon'te, Inc. (petitioners) at a public auction.

As no redemption was made during the period provided by law, petitioners filed an
omnibus motion seeking the issuance of a final deed of sale, cancellation of title in
the name of respondents, and the issuance of a new title in their names. It was
during this time that respondents realized that only the corporation was impleaded
as party-respondent in Servandil's complaint for illegal dismissal.

Resposndents filed a verified counter-manifestation with omnibus motion stating

that the property sold at auction does not belong to the judgment debtor, the
corporation, but to respondents, who were not impleaded as party-respondents in
the case for illegal dismissal. They likewise claimed that the property was conjugal
and there was no showing that an advantage or benefit accrued to their conjugal
partnership.

The LA denied respondents' omnibus motion and directed Sheriff Manolito G.

Manuel to issue and execute a Final Deed of Conveyance and/or Final Deed of Sale
of the subject property in favor of the Purchasers/Appellees, JAIME BILAN
MONTEALEGRE and [CHAMON'TE], INC.

Likewise, the levy effected by the RTC Cebu Court Sheriff Rome C. Asombrado to
the subject property was lifted or cancelled c.

Aggrieved, respondents filed a petition before the NLRC with prayer for the issuance
of a temporary restraining order (TRO) and/or writ of preliminary injunction.The
NLRC issued a TRO and a writ of preliminary injunction, respectively.

However, later on, it denied respondents' petition, affirming in toto the August 25,
2011 Order of the LA.

The NLRC noted that respondent Abraham filed an earlier omnibus motion which
sought to annul the Notice of Sheriffs Sales for the levy and public sale of the
property, and this omnibus motion was resolved in an Order where it was declared
that the levy and sale of the property is valid.

Considering that no motion for reconsideration or appeal was filed, the Order
became final and executory. The NLRC held that respondents are prohibited to
question a final and executory Order by assailing the later Order (2011), which
merely enforced the earlier Order.

More, the NLRC rejected respondent Abraham's argument that the

corporation is a distinct entity and therefore, its creditors cannot go after
his property. The NLRC reasoned that, although as a rule, the officers and
members of a corporation are not personally liable for acts done in
performance of their duties, an exceptional circumstance exists in this
case, i.e., the corporation is no longer existing and is unable to satisfy the
judgment in favor of the employee.

Finally, the NLRC declared that the validity of the levy and sale of the property
cannot likewise be questioned on the basis that the property levied upon is a
conjugal property of respondents. This is because respondent Remedios failed to
file a third-party claim within five days from the last day of posting or publication of
the notice of execution sale. The NLRC likewise denied respondents' motion for
reconsideration.

Aggrieved, respondents filed a petition for certiorari before the CA which granted
the petition and reversed the NLRC Resolutions.
On August 30, 2013, the CA denied petitioners' motion for reconsideration. It
ruled that, contrary to petitioners' contentions, it is not undisputed that
the corporation has ceased to exist. While Servandil alleged this fact
before the LA, said closure is not supported by the evidence on record.
Furthermore, the ruling in A.C. Ransom Labor Union- CCLV v. NLRC, which made
corporate officers liable in case of closure of the corporation is inapplicable in this
case. Unlike in the present case, the corporate officers in A.C. Ransom were
impleaded from the very beginning.

ISSUE:

1. Whether the CA correctly declared null the writs of execution issued by the LA
and the subsequent orders and resolutions of the LA and NLRC implementing
said writs of execution against respondents' property.

2. Whether piercing of corporate veil is warranted in this case.

3. Whether corporate officers are held solidarily liable with the corporation for
separation pay

RULING:

1. The Court ruled that the CA acted correctly.

As a general rule, a writ of execution must strictly conform to every

particular of the judgment to be executed. It should not vary the terms of
the judgment it seeks to enforce, nor may it go beyond the terms of the
judgment sought to be executed, otherwise, if it is in excess of or beyond
the original judgment or award, the execution is void.

Furthermore, the power of the courts in executing judgments extends only

to properties unquestionably belonging to the judgment debtor and
liability may even be incurred by the sheriff for levying properties not
belonging to the judgment debtor.

In Mandaue Dinghow Dimsum House, Co., Inc. v. National Labor Relations

Commission-Fourth Division40 we ruled: cralawred

The Order and the Alias Writ of Execution issued by the LA are null and void for lack
of jurisdiction and for altering the tenor of the NLRC decision dated October 24,
2000 which directed Mandaue Dinghow alone to pay the private respondents'
separation pay. The private respondents did not assail this ruling. Thus, the same
became final and executory. Even granting that the NLRC committed a mistake in
failing to indicate in the dispositive portion that Uytengsu was solidarity liable with
Mandaue Dinghow, the correction — which is substantial — can no longer be
allowed in this case because the judgment has already become final and
executory.41
chanRoblesvirtualLaw1ibrary

Here, it is undisputed that the final and executory November 27, 2003 LA
Decision adjudged the corporation guilty of illegal dismissal and ordered it
to pay Servandil separation pay and backwages. It did not mention
respondents' liability.

Nevertheless, the Writ of Execution dated May 22, 2007 and the Alias Writ
of Execution dated February 11, 2008 were directed against the movable
and immovable properties of both the corporation and respondent
Abraham. Clearly, the writs of execution here exceeded the terms of the final and
executory judgment of the LA.

Consequently, the CA correctly set aside the levy and sale of the subject
property pursuant to said writs and the August 25, 2011 Order, which
directed the issuance of a Final Deed of Sale in favor of petitioners, for
being the offshoot of a void execution, as well as the NLRC Resolutions dated
March 29, 2012 and May 28, 2012, which affirmed the August 25, 2011 Order.

2. Contrary to petitioners' assertions, the piercing of the veil of

corporate fiction is unwarranted in this case.

We further explained that Carag v. National Labor Relations Commission clarified

that Article 212(e) of the Labor Code, by itself, does not make a corporate
officer personally liable for the debts of the corporation. It emphasized
that the governing law on personal liability of directors or officers for
debts of the corporation is still Section 31 of the Corporation Code.

Thus, the doctrine of piercing the corporate veil applies only in three basic
areas, namely:

1) defeat of public convenience as when the corporate fiction is used as a vehicle

for the evasion of an existing obligation;

2) fraud cases or when the corporate entity is used to justify a wrong, protect
fraud, or defend a crime;
or 3) alter ego cases, where a corporation is merely a farce since it is a mere alter
ego or business conduit of a person, or where the corporation is so organized and
controlled and its affairs are so conducted as to make it merely an instrumentality,
agency, conduit or adjunct of another corporation.

In the absence of malice, bad faith, or a specific provision of law making a

corporate officer liable, such corporate officer cannot be made personally
liable for corporate liabilities.

3. The general rule is corporate officers are not held solidarily liable
with the corporation for separation pay

The reason for this is that the corporation is invested by law with a
personality separate and distinct from those persons composing it as well
as from that of any other legal entity to which it may be related.

To hold a director or officer personally liable for corporate obligation is the

exception and it only occurs when the following requisites are present:

(1) the complaint must allege that the director or officer assented to the
patently unlawful acts of the corporation, or that the director or officer was
guilty of gross negligence or bad faith; and

(2) there must be proof that the director or officer acted in bad faith.

Here, the two requisites are wanting. Servandil's complaint failed to allege or
impute bad faith or malice on the part of respondent Abraham De Vera. There
was likewise nothing in the November 27, 2003 LA Decision that would
establish that respondent Abraham De Vera acted in bad faith when
Servandil was dismissed from the service. There was likewise no invocation of
bad faith on the part of respondent Abraham De Vera to evade any judgment
against the corporation.

WHEREFORE, the petition is DENIED.

13.

ASIAN INSTITUTE OF MANAGEMENT, Petitioner,vs. ASIAN INSTITUTE OF MANAGEMENT

FACULTY ASSOCIATION, Respondent.

(G.R. No. 207971)

FACTS:

Petitioner Asian Institute of Management (AIM) is a duly registered non-stock, non-profit educational
institution. Respondent Asian Institute of Management Faculty Association (AFA) is a registered
labor organization composed of members of the AIM faculty

On May 16, 2007, respondent filed a petition for certification election seeking to represent a
bargaining unit in AIM consisting of forty (40) faculty members. Petitioner opposed the petition,
claiming that respondent's members are neither rank-and-file nor supervisory, but rather, managerial
employees.

On July 11, 2007, petitioner filed a petition for cancellation of respondent's certificate of
registration on the grounds of misrepresentation in registration and that respondent is composed of
managerial employees who are prohibited from organizing as a union.

On August 30, 2007, the Med-Arbiter issued an Order denying the petition for certification election
on the ground that AIM' s faculty members are managerial employees. This Order was appealed by
respondent before the Secretary of the DOLE who reversed the decision and allowed the
conduct of a certification election among the faculty members of the Asian Institute of
Management (AIM), with the following choices:

1. ASIAN INSTITUTE OF MANAGEMENT FACULTY ASSOCIATION (AIMFA); and

2. No Union.

Meanwhile, DOLE-NCR Regional Director Raymundo G. Agravante granted AIM's petition for
cancellation of respondent's certificate of registration and ordering its delisting from the
roster of legitimate labor organizations. Order was appealed by respondent before the (BLR),
which reversed the same and ordered respondent's retention in the roster of legitimate labor
organizations.

The BLR held that the grounds relied upon in the petition for cancellation are not among the
grounds authorized under Article 239 of the Labor Code, and that respondent's members are
not managerial employees. Petitioner moved to reconsider, but was rebuffed in a March 18, 2010
Resolution.

On October 22, 2010, the CA rendered its Decision agreeing with the petitioners contention that the
members of its tenure-track faculty are managerial employees who are ineligible to join, assist or
form a labor organization.
Article 212(m) of the Labor Code defines managerial employees as one who is vested with
powers or prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are
those who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires the use
of independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.

There are, therefore, two (2) kinds of managerial employees under Art. 212(m) of the Labor
Code:

1. lay down x x x management policies', such as the Board of Trustees, and

2. those who 'execute management policies and/or hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees'.

On its face, the SOLE's opinion is already erroneous because in claiming that the 'test of

In further opining that a managerial employee is one whose 'authority is not merely routinary
or clerical in nature but requires the use of independent judgment', a description which fits
now a supervisory employee under Section l(t), Rule I, Book V of the Omnibus Rules
Implementing the Labor Code, it then follows that the SOLE was not aware of the change in the
law and thus gravely abused its discretion amounting to lack of jurisdiction in concluding
that AIM's 'tenure-track' faculty are not managerial employees.

Clearly, AIM's tenure-track faculty do not merely recommend faculty standards. They 1âwphi1

'determine all faculty standards', and are thus managerial employees. The standards' being
subjected to the approval of the Board of Trustees would not make AIM's tenure-track faculty non-
managerial because as earlier mentioned, managerial employees are now of two categories: (1)
those who 'lay down policies', such as the members of the Board of Trustees, and (2) those who
'execute management policies (etc.)’, such as AIM's tenure-track faculty.

The Assailed Ruling of the Court of Appeals

Meanwhile, relative to DOLE Case No. NCR-OD-0707-001-LRD or petitioner AIM's petition for
cancellation of respondent's certificate of registration, petitioner filed on May 24, 20 l 0 a
Petition for Certiorari22before the CA, questioning the BLR's December 29, 2009 decision and
March 18, 2010 resolution.

The petition, docketed as CA-G.R. SP No. 114122, alleged that the BLR committed grave abuse
of discretion in granting respondent's appeal and affirming its certificate of registration
notwithstanding that its members are managerial employees who may not join, assist, or
form a labor union or organization.

On January 8, 2013, the CA rendered the assailed Decision stating that the petition lacks merit. AIM
must lay the basis by showing that any of the grounds provided under Article 239 of the
Labor Code, exists, to wit:
Article 239. Grounds for cancellation of union registration. - The following may constitute
grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification
of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;

(c) Voluntary dissolution by the members.

Article 238 of the Labor Code provides that the enumeration of the grounds for cancellation
of union registration, is exclusive; in other words, no other grounds for cancellation is
acceptable, except for the three (3) grounds stated in Article 239.

The bare fact that two signatures appeared twice on the list of those who participated in the
organizational meeting would not, to our mind, provide a valid reason to cancel respondent's
certificate of registration. The cancellation of a union's registration doubtless has an impairing
dimension on the right of labor to self-organization. For fraud and misrepresentation to be
grounds for cancellation of union registration under the Labor Code, the nature of the fraud
and misrepresentation must be grave and compelling enough to vitiate the consent of a
majority of union members.23

Article 245-A. Effect of inclusion as members of employees outside the bargaining unit. - The
inclusion as union members of employees outside the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said employees are automatically deemed removed
from the list of membership of said union.

Petitioner insists that Article 245-A is not applicable to this case as all AF A members are managerial
employees. The CA is not persuaded, thus, the petition is denied.

Petitioner filed its Motion for Reconsideration, which was denied by the CA. Hence, the instant
Petition.

Issue

1. Whether the CA seriously erred in affirming the dispositions of the BLR and thus validating
the respondent's certificate of registration notwithstanding the fact that its members are all
managerial employees who are disqualified from joining, assisting, or forming a labor
organization.

2. Whether the court can rule on this case despite a pending petition for review on certiorari in
another case.
Ruling:

1. In case of alleged inclusion of disqualified employees in a union, the proper

procedure for an employer like petitioner is to directly file a petition for cancellation of
the union's certificate of registration due to misrepresentation, false statement or
fraud under the circumstances enumerated in Article 239 of the Labor Code, as amended

In this case, petitioner was correct in filing a petition for cancellation of respondent's
certificate of registration. Petitioner's sole ground for seeking cancellation of
respondent's certificate of registration - that its members are managerial employees
and for this reason, its registration is thus a patent nullity for being an absolute
violation of Article 245 of the Labor Code which declares that managerial employees are
ineligible to join any labor organization --- is, in a sense, an accusation that respondent is
guilty of misrepresentation for registering under the claim that its members are not
managerial employees.

2. The issue of whether respondent's members are managerial employees is still

pending resolution by way of petition for review on certiorari in G.R. No. 197089, which
is the culmination of all proceedings in DOLE Case No. NCR-OD-M-0705-007 -- where the
issue relative to the nature of respondent's membership was first raised by petitioner itself
and is there fiercely contested.

The resolution of this issue cannot be pre-empted; until it is determined with finality in
G.R. No. l 97089, the petition for cancellation of respondent's certificate of registration
on the grounds alleged by petitioner cannot be resolved.

As a matter of courtesy and in order to avoid conflicting decisions, We must await the
resolution of the petition in G.R. No. 197089. If a particular point or question is in issue
in the second action, and the judgment will depend on the determination of that
particular point or question, a former judgment between the same parties or their
privies will be final and conclusive in the second if that same point or question was in
issue and adjudicated in the first suit. Identity of cause of action is not required, but
merely identity of issues.

Hence, the case should be CONSOLIDATED with G.R. No. 197089.