Professional Documents
Culture Documents
1. Just press ctrl + click on the case title (not the number) to navigate.
2. Texts enclosed in [] should be paraphrased as they are not copied verbatim
3. Read the notes, if any, at the top of every case digest.
Contents
01
Lolita A. Lopez, et. al., vs. Quezon City Sports Club, Inc..............................................................................3
10 Herminigildo Inguillo and Zenaida Bergante vs. First Philippine Scales, Inc. (FPSI) and/or Amparo
Policarpio, manager.....................................................................................................................................5
11 HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, vs. SAMAHAN
NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT
AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN)......................................................................................8
20 UNIVERSITY OF SANTO TOMAS (UST) vs SAMAHANG MANGGAGAWA NG UST (SM-UST)...................10
21 ANDREW JAMES MCBURNIE, vs EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC.,.......12
30 RONILO SORREDA vs. CAMBRIDGE ELECTRONICS CORPORATION........................................................14
31 PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS ORGANIZATION
(PSTMSDWO), represented by its President, RENE SORIANO vs. PNCC SKYWAY CORPORATION..............15
40 NESTLÉ vs. UFE-DFA-KMU.....................................................................................................................17
41 FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THEPHILIPPINES (FASAP), PETITIONER, VS.
PHILIPPINE AIRLINES, INC. (PAL), PATRIA CHIONG & CA............................................................................19
50 FLAVIO S. SUAREZ, JR., et. al. vs. NATIONAL STEEL CORPORATION......................................................22
Page |2
Lolita A. Lopez, et. al., vs. Quezon City Sports Club, Inc.
Facts: Kasapiang Manggagawa sa Quezon City Sports Club (union) filed a complaint for unfair
labor practice against QCSC, alleging that the latter committed the following unfair labor
practices:
1. Interference with, restraining and/or coercing employees, particularly
members of the incumbent union in their exercise of their rights to self-
organization;
2. Discrimination in regards to payment of wages, hours of work and other
terms and conditions of employment in order to discourage continued
membership to the incumbent union;
3. Violation of several economic provisions of the CBA such as, across the
board implementation of any legislated wage increases, non-payment of
salaries and wages for [the] period already worked, and non-payment of
overtime pay to some employees and other related economic benefits which
will be specifically enunciated by the petitioner in the succeeding pleadings to
be filed
Held: 1. Yes. The right to appeal is not a natural right or a part of due process; it is merely a
statutory privilege, and may be exercised only in the manner and in accordance with the
provisions of law. The party who seeks to avail himself of the same must comply with the
requirements of the rules. Failing to do so, the right to appeal is lost.
Article 223 of the Labor Code partly provides that:
Art. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are
final and executory unless appealed to the Commission by any or both
parties within ten (10) calendar days from receipt of such decisions,
awards, or orders. Such appeal may be entertained only on any of the
following grounds:
Under Sections 4(a) and 6 of Rule VI of the New Rules of Procedure of the NLRC, as
amended, appeals involving monetary awards are perfected only upon compliance with
the following mandatory requisites, namely: (1) payment of the appeal fees; (2) filing of the
memorandum of appeal; and (3) payment of the required cash or surety bond. While the
bond requirement on appeals involving a monetary award has been relaxed in certain
cases, this can only be done where there was substantial compliance with the Rules; or
where the appellants, at the very least, exhibited willingness to pay by posting a partial
bond. Applying these jurisprudential guidelines, we find and hold that the NLRC did not err
in reducing the amount of the appeal bond and considering the appeal as having been filed
within the reglementary period. Moreover, the posting of the amount of P4,000,000.00
simultaneously with the filing of the motion to reduce the bond to that amount, as well as
the filing of the memorandum of appeal, all within the reglementary period, altogether
constitute substantial compliance with the Rules.
Page |4
Texts enclosed in a [] are supplied by me. Therefore, please paraphrase if you are to copy.
There are 2 issues in this digest (kaya mahaba) – one will suffice.
Herminigildo Inguillo and Zenaida Bergante vs. First Philippine Scales, Inc. (FPSI) and/or Amparo
Policarpio, manager
G.R. No. 165407 (June 5, 2009)
Facts: In 1991, FPSI and First Philippine Scales Industries Labor Union (FPSILU) entered into a
Collective Bargaining Agreement (CBA) for a period of five (5) years in a document
entitled RATIPIKASYON NG KASUNDUAN. Bergante and Inguillo, who were members of
FPSILU, signed the said document.
Bergante, Inguillo and several FPSI employees joined another union, the Nagkakaisang
Lakas ng Manggagawa (NLM). [The latter] filed with the Department of Labor and
Employment (DOLE) an intra-union dispute against FPSILU and FPSI. Meanwhile, on March
29, 1996, the executive board and members of the FPSILU addressed a document dated
March 18, 1996 denominated as “Petisyon” to FPSI's general manager, Amparo Policarpio
(Policarpio), seeking the termination of the services of [several employees, including herein
petitioners. This was granted upon by FPSI, which terminated, among others, herein
petitioners.]
In their Petition, Bergante and Inguillo assail the legality of their termination based on the
Union Security Clause in the CBA between FPSI and FPSILU.
Issue: [(1) Was there a valid ground for termination?
(2) Was there compliance with the procedural due process to the termination?]
Held: (1) Yes. The Labor Code of the Philippines has several provisions under which an employee
may be validly terminated, namely: (1) just causes under Article 282; (2) authorized causes
under Article 283; (3) termination due to disease under Article 284; and (4) termination by
the employee or resignation under Article 285. While the said provisions did not mention
as ground the enforcement of the Union Security Clause in the CBA, the dismissal from
employment based on the same is recognized and accepted in our jurisdiction.
“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 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
[40]
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.
Bergante and Inguillo assail the legality of their termination based on the Union Security
Page |5
[42]
Clause in the CBA between FPSI and FPSILU. Article II of the CBA pertains to Union
Security and Representatives, which provides:
“The Company hereby agrees to a UNION SECURITY [CLAUSE] with the following
terms:
1. All bonafide union members x x x x shall, as a condition to their continued
employment, maintain their membership with the UNION;
xxx
5. Any employee/union member who fails to retain union membership in
good standing may be recommended for suspension or dismissal by the Union
Directorate and/or FPSILU Executive Council x x x”
Verily, the aforesaid provision requires all members to maintain their membership with
FPSILU during the lifetime of the CBA. Failing so, and for any of the causes enumerated
therein, the Union Directorate and/or FPSILU Executive Council may recommend to FPSI an
employee/union member's suspension or dismissal. Records show that Bergante and
Inguillo were former members of FPSILU based on their signatures in the document which
ratified the CBA. It can also be inferred that they disaffiliated from FPSILU when the CBA
was still in force and subsisting, as can be gleaned from the documents relative to the
intra-union dispute between FPSILU and NLM-KATIPUNAN. In view of their disaffiliation,
as well as other acts allegedly detrimental to the interest of both FPSILU and FPSI, a
“Petisyon” was submitted to Policarpio, asking for the termination of the services of
employees who failed to maintain their Union membership.
In terminating the employment of an employee by enforcing the Union Security Clause, the
employer needs only 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 union's decision to expel the
employee from the union or company. All the requisites have been sufficiently met and
FPSI was justified in enforcing the Union Security Clause.
The stipulations in the CBA authorizing the dismissal of employees are of equal import as
the statutory provisions on dismissal under the Labor Code, since a CBA is the law between
the company and the Union, and compliance therewith is mandated by the express policy
to give protection to labor. In Caltex Refinery Employees Association (CREA) v.
Brillantes, the Court expounded on the effectiveness of union security clause when it held
that it is one intended to strengthen the contracting union and to protect it from the
fickleness or perfidy of its own members. For without such safeguards, group solidarity
becomes uncertain; the union becomes gradually weakened and increasingly vulnerable to
company machinations. In this security clause lies the strength of the union during the
enforcement of the collective bargaining agreement. It is this clause that provides labor
with substantial power in collective bargaining.
Page |6
(2) No. Nonetheless, while We uphold dismissal pursuant to a union security clause, the
same is not without a condition or restriction. The enforcement of union security clauses is
authorized by law, provided such enforcement is not characterized by arbitrariness, and
always with due process. There are two (2) aspects which characterize the concept of due
process under the Labor Code: one is substantive––whether the termination of
employment was based on the provisions of the Labor Code or in accordance with the
prevailing jurisprudence; the other is procedural - the manner in which the dismissal was
effected.
Procedural due process in the dismissal of employees requires notice and hearing. The
employer must furnish the employee two written notices before termination may be
effected. The first notice apprises the employee of the particular acts or omissions for
which his dismissal is sought, while the second notice informs the employee of the
employer’s decision to dismiss him. The requirement of a hearing, on the other hand, is
complied with as long as there was an opportunity to be heard, and not necessarily that an
actual hearing was conducted.
In the present case, the required two notices that must be given to herein petitioners
Bergante and Inguillo were lacking. Respondents, however, aver that they had furnished
the employees concerned, including petitioners, with a copy of FPSILU's “Petisyon.” While
the “Petisyon” enumerated the several grounds that would justify the termination of the
employees mentioned therein, yet such document is only a recommendation by
the Union upon which the employer may base its decision. It cannot be considered a
notice of termination. A perusal of each of [the grounds stated therein] leads Us to
conclude that what was stated were general descriptions, which in no way would enable
the employees to intelligently prepare their explanation and defenses.
Policarpio's allegations are self-serving. Except for her claim as stated in the respondent's
Position Paper, nowhere from the records can We find that Bergante and Inguillo were
accorded the opportunity to present evidence in support of their defenses. Policarpio
relied heavily on the “Petisyon” of FPSILU. She failed to convince Us that during the
dialogue, she was able to ascertain the validity of the charges mentioned in the
“Petisyon.” In her futile attempt to prove compliance with the procedural requirement,
she reiterated that the objective of the dialogue was to provide the employees “the
opportunity to receive the act of grace of FPSI by giving them an amount equivalent to
one-half (½) month of their salary for every year of service.” We are not convinced. We
cannot even consider the demand and counter-offer for the payment of the employees as
an amicable settlement between the parties because what took place was merely a
discussion only of the amount which the employees are willing to accept and the amount
which the respondents are willing to give. Such non-compliance is also corroborated by
Bergante and Inguillo in their pleadings denouncing their unjustified dismissal. In fine, We
hold that the dialogue is not tantamount to the hearing or conference prescribed by law.
Page |7
2.5 issues. Paraphrase texts enclosed in []. More facts can be deduced from the ruling.
HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, vs. SAMAHAN
NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT
AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN)
G.R. No. 165756 June 5, 2009
Facts: In 2001, HEPI’s hotel business suffered a slump due to the local and international economic
slowdown, aggravated by the events of September 11, 2001 in the United States.
According to petitioner, the management initially decided to cost-cut by implementing
energy-saving schemes: prioritizing acquisitions/purchases; reducing work weeks in some
of the hotel’s departments; directing the employees to avail of their vacation leaves; and
imposing a moratorium on hiring employees for the year 2001 whenever practicable. [It
thereafter decided to retrench several employees, including some of the union members.]
[Respondent Union, believing that this constituted an unfair labor practice, staged a strike].
A strike notice filed on April 12, 2002; a strike vote reached on April 25, 2002; notification
of the strike vote filed also on April 25, 2002; conciliation proceedings conducted on May 8,
20002; and the actual strike on May 10, 2002.
Issue: [(1) Was the retrenchment valid? (corollary-) Does the implementation of the downsizing
scheme preclude petitioner from availing the services of contractual and agency-hired employees?
(2) Was the strike valid?]
Held: (1) Yes. For a valid retrenchment, the following requisites must be complied with: (1) the
retrenchment is necessary to prevent losses and such losses are proven; (2) written notice
to the employees and to the DOLE at least one month prior to the intended date of
retrenchment; and (3) payment of separation pay equivalent to one-month pay or at least
one-half month pay for every year of service, whichever is higher.
In case of redundancy, the employer must prove that: (1) a written notice was
served on both the employees and the DOLE at least one month prior to the intended date
of retrenchment; (2) separation pay equivalent to at least one month pay or at least one
month pay for every year of service, whichever is higher, has been paid; (3) good faith in
abolishing the redundant positions; and (4) adoption of fair and reasonable criteria in
ascertaining which positions are to be declared redundant and accordingly abolished.
This Court will not hesitate to strike down a company’s redundancy program structured to
downsize its personnel, solely for the purpose of weakening the union leadership. Our
labor laws only allow retrenchment or downsizing as a valid exercise of management
prerogative if all other else fail. But in this case, petitioner did implement various cost-
saving measures and even transferred some of its employees to other viable positions just
to avoid the premature termination of employment of its affected workers. It was when
the same proved insufficient and the amount of loss became certain that petitioner had to
resort to drastic measures to stave offP9,981,267.00 in losses, and be able to survive.
[Corollary issue:] No.
“In any event, we have held that an employer’s good faith in implementing a redundancy program is not
Page |8
necessarily destroyed by availment of the services of an independent contractor to replace the services of the
terminated employees. We have previously ruled that the reduction of the number of workers in a company
made necessary by the introduction of the services of an independent contractor is justified when the latter is
undertaken in order to effectuate more economic and efficient methods of production. In the case at bar,
private respondent failed to proffer any proof that the management acted in a malicious or arbitrary manner in
engaging the services of an independent contractor to operate the Laura wells. Absent such proof, the Court
has no basis to interfere with the bona fide decision of management to effect more economic and efficient
methods of production.”
A valid and legal strike must be based on “strikeable” grounds, because if it is based on a
“non-strikeable” ground, it is generally deemed an illegal strike. Corollarily, a strike
grounded on ULP is illegal if no acts constituting ULP actually exist. As an exception, even if
no such acts are committed by the employer, if the employees believe in good faith that
ULP actually exists, then the strike held pursuant to such belief may be legal. As a general
rule, therefore, where a union believes that an employer committed ULP and the
surrounding circumstances warranted such belief in good faith, the resulting strike may be
considered legal although, subsequently, such allegations of unfair labor practices were
found to be groundless.
2. The appellate court’s award of additional signing bonus (from P10,000.00 to P18,000.00)
is contrary to the nature and principle behind the grant of such benefit, which is one given
[12]
as a matter of discretion and cannot be demanded by right, a consideration paid for the
goodwill that existed in the negotiations, which culminate in the signing of a CBA.
[13]
Petitioner claims that since this condition is absent in the parties’ case, it was
erroneous to have rewarded respondent with an increased signing bonus.
Issue: [1. Whether or not the members of private respondent voluntarily and knowingly accepted
the arbitral award of the secretary of dole, amounting to ratification or waiver..
2. Whether or not the increase of the signing bonus was correct.]
Held: The question of whether respondent’s members’ individual acceptance of the award and
the resulting payments made by petitioner operate as a ratification of the DOLE Secretary’s
award which renders CA decision moot, we find that such do not operate as a ratification
of the DOLE Secretary’s award; nor a waiver of their right to receive further benefits, or
what they may be entitled to under the law. The appellate court correctly ruled that the
respondent’s members were merely constrained to accept payment at the time. Christmas
was then just around the corner, and the union members were in no position to resist the
temptation to accept much-needed cash for use during the most auspicious occasion of the
year. Time and again, we have held that necessitous men are not, truly speaking, free men;
but to answer a present emergency, will submit to any terms that the crafty may impose
upon them.
will of the members is personified by its board of directors or trustees, the decisions it
makes should accordingly bind them. Precisely, a labor union exists in whole or in part for
the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment. What the individual employee may not do alone, as for
example obtain more favorable terms and conditions of work, the labor organization,
through persuasive and coercive power gained as a group, can accomplish better.
A signing bonus is a grant motivated by the goodwill generated when a CBA is successfully
negotiated and signed between the employer and the union. In the instant case, no CBA
was successfully negotiated by the parties. It is only because petitioner prays for this Court
to affirm in toto the DOLE Secretary’s May 31, 2002 Order that we shall allow an award of
signing bonus. There would have been no other basis to grant it if petitioner had not so
prayed. We shall take it as a manifestation of petitioner’s liberality, which we cannot now
allow it to withdraw. A bonus is a gratuity or act of liberality of the giver; when petitioner
filed the instant petition seeking the affirmance of the DOLE Secretary’s Order in its
entirety, assailing only the increased amount of the signing bonus awarded, it is considered
to have unqualifiedly agreed to grant the original award to the respondent union’s
members.
[FYI.]
WHEREFORE, the petition is PARTIALLY GRANTED. The signing bonus of EIGHTEEN
THOUSAND PESOS (P18,000.00) per member of respondent Samahang Manggagawa ng
U.S.T. as awarded by the Court of Appeals is REDUCED to TEN THOUSAND PESOS
(P10,000.00). All other findings and dispositions made by the Court of Appeals in its
January 31, 2005 Decision and September 23, 2005 Resolution in CA-G.R. SP No. 72965
are AFFIRMED.
P a g e | 11
[Similar to Lolita A. Lopez, et. al., vs. Quezon City Sports Club, Inc.] bold and italicized texts were supplied in
the decision. Texts enclosed in [] are supplied by me.
ANDREW JAMES MCBURNIE, vs EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC.,
G.R. Nos. 178034 & 178117; G.R. Nos. 186984-85 (September 18, 2009)
Facts: McBurnie filed a case against EGI for illegal termination. The labor arbiter ruled in
favor of the former.
Moreover, the filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer jurisdiction upon the
NLRC. Non-compliance therewith renders the decision of the Labor Arbiter final and
executory. This requirement is intended to assure the workers that if they prevail in the
case, they will receive the money judgment in their favor upon the dismissal of the
employer’s appeal. It is intended to discourage employers from using an appeal to delay or
evade their obligation to satisfy their employees' just and lawful claims.
Thus, it behooves the Court to give utmost regard to the legislative and administrative
intent to strictly require the employer to post a cash or surety bond securing
the full amount of the monetary award within the 10 day reglementary period. Nothing in
the Labor Code or the NLRC Rules of Procedure authorizes the posting of a bond that
is less than the monetary award in the judgment, or would deem such insufficient
posting as sufficient to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is subject to the
conditions that (1) the motion to reduce the bond shall be based on meritorious grounds;
and (2) a reasonable amount in relation to the monetary award is posted by the appellant,
otherwise the filing of the motion to reduce bond shall not stop the running of the period
to perfect an appeal. The qualification effectively requires that unless the NLRC grants the
reduction of the cash bond within the 10 day reglementary period, the employer is still
expected to post the cash or surety bond securing the full amount within the said 10-day
period. If the NLRC does eventually grant the motion for reduction after the reglementary
period has elapsed, the correct relief would be to reduce the cash or surety bond already
posted by the employer within the 10-day period.
Time and again, it has been held that the right to appeal is not a constitutional right, but a
mere statutory privilege. Hence, parties who seek to avail themselves of it must comply
with the statutes or rules allowing it. To reiterate, perfection of an appeal in the manner
and within the period permitted by law is mandatory and jurisdictional. The requirements
for perfecting an appeal must, as a rule, be strictly followed. Such requirements are
considered indispensable interdictions against needless delays and are necessary for the
orderly discharge of the judicial business. Failure to perfect the appeal renders the
judgment of the court final and executory. Just as a losing party has the privilege to file an
appeal within the prescribed period, so does the winner also have the correlative right to
enjoy the finality of the decision. Thus, the propriety of the monetary awards of the Labor
Arbiter is already binding upon this Court, much more with the Court of Appeals.
P a g e | 13
[Petitioner filed a case for illegal dismissal. Defendant averred that there was no employer-
employee relationship. CA ruled that the] petitioner Ronilo Sorreda was not a regular
employee of respondent Cambridge Electronics Corporation.
Issue: Whether or not there is an employer-employee relationship.
Held: NO. In this instance, petitioner, from the period May 8, 1999 to October 8, 1999, was
clearly a per-project employee of private respondent, resulting in an employer-employee
relationship. Consequently, questions or disputes arising out of this relationship fell under
the jurisdiction of the labor arbiter.
However, based on petitioner’s allegations in his position paper, his cause of action
was based on an alleged second contract of employment separate and distinct from the
per-project employment contract. Thus, petitioner insisted that there was a perfected
contract of perpetual employment and that respondent was liable to pay him damages.
We note, however, that petitioner filed the case only when respondent refused to
rehire him. While there was an employer-employee relationship between the parties under
their five-month per-project contract of employment, the present dispute is neither rooted
in the aforestated contract nor is it one inherently linked to it.
While the Constitution recognizes the primacy of labor, it also recognizes the critical role of
private enterprise in nation-building and the prerogatives of management. A contract of
perpetual employment deprives management of its prerogative to decide whom to hire,
fire and promote, and renders inutile the basic precepts of labor relations. While
management may validly waive it prerogatives, such waiver should not be contrary to law,
public order, public policy, morals or good customs.[24] An absolute and unqualified
employment for life in the mold of petitioner’s concept of perpetual employment is
contrary to public policy and good customs, as it unjustly forbids the employer from
terminating the services of an employee despite the existence of a just or valid cause. It
likewise compels the employer to retain an employee despite the attainment of the
statutory retirement age, even if the employee has became a “non-performing asset” or,
worse, a liability to the employer.
Moreover, aside from the self-serving claim of petitioner, there was no concrete
proof to establish the existence of such agreement. Petitioner cannot validly force
respondent to enter into a permanent employment contract with him. Such stance is
contrary to the consensuality principle of contracts as well as to the management
prerogative of respondent company to choose its employees.
ARTICLE VIII
VACATION LEAVE AND SICK LEAVE
[b] The company shall schedule the vacation leave of employees during
the year taking into consideration the request of preference of the
employees. (emphasis supplied)
[PNCC then created a schedule of leaves for their employees.] Petitioner objected to the
implementation of the said memorandum. It insisted that the individual members of the
union have the right to schedule their vacation leave. It opined that the unilateral
scheduling of the employees' vacation leave was done to avoid the monetization of their
vacation leave in December 2004.
Issue: WON the PNCC has the sole discretion to schedule the vacation leaves of its employees.
Held: YES. Petitioner insisted that their union members have the preference in scheduling
their vacation leave. On the other hand, respondent argued that Article VIII, Section 1 (b)
gives the management the final say regarding the vacation leave schedule of its employees.
Respondent may take into consideration the employees' preferred schedule, but the same
is not controlling.
The rule is that where the language of a contract is plain and unambiguous, its meaning
should be determined without reference to extrinsic facts or aids. The intention of the
parties must be gathered from that language, and from that language alone. Stated
differently, where the language of a written contract is clear and unambiguous, the
contract must be taken to mean that which, on its face, it purports to mean, unless some
good reason can be assigned to show that the words used should be understood in a
different sense.
In the case at bar, the contested provision of the CBA is clear and unequivocal. Article VIII,
Section 1 (b) of the CBA categorically provides that the scheduling of vacation leave shall
be under the option of the employer.
Thus, if the terms of a CBA are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall prevail. In fine, the CBA must
be strictly adhered to and respected if its ends have to be achieved, being the law between
the parties. In Faculty Association of Mapua Institute of Technology (FAMIT) v. Court of
P a g e | 15
Appeals, this Court held that the CBA during its lifetime binds all the parties. The
provisions of the CBA must be respected since its terms and conditions constitute the law
between the parties. The parties cannot be allowed to change the terms they agreed upon
on the ground that the same are not favorable to them.
[T]he purpose of a vacation leave is to afford a laborer a chance to get a much-needed rest
to replenish his worn-out energy and acquire a new vitality to enable him to efficiently
perform his duties, and not merely to give him additional salary and bounty. Accordingly,
the vacation leave privilege was not intended to serve as additional salary, but as a non-
monetary benefit. To give the employees the option not to consume it with the aim of
converting it to cash at the end of the year would defeat the very purpose of vacation
leave.
Indeed, the multitude or scarcity of personnel manning the tollways should not rest upon
the option of the employees, as the public using the skyway system should be assured of
its safety, security and convenience. Petitioner's contention that labor contracts should be
construed in favor of the laborer is without basis and, therefore, inapplicable to the
present case. This rule of construction does not benefit petitioners because, as stated,
there is here no room for interpretation. Since the CBA is clear and unambiguous, its terms
should be implemented as they are written.
P a g e | 16
2 rulings. You can just choose one of the two, or a little of both. Paraphrase text in [].
UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS - KILUSANG MAYO
UNO (UFE-DFA-KMU) vs. NESTLÉ PHILIPPINES, INCORPORATED (NESTLÉ)
G.R. Nos. 158930-31
The crucial question, therefore, of whether or not a party has met his statutory
duty to bargain in good faith typically turns on the facts of the individual case. As we have
said, there is no per se test of good faith in bargaining. Good faith or bad faith is an
inference to be drawn from the facts. To some degree, the question of good faith may be a
question of credibility. The effect of an employer’s or a union’s individual actions is not the
test of good-faith bargaining, but the impact of all such occasions or actions, considered as
a whole, and the inferences fairly drawn therefrom collectively may offer a basis for the
finding of the NLRC.
For a charge of unfair labor practice to prosper, it must be shown that Nestlé was
motivated by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner
contrary to morals, good customs, or public policy, and, of course, that social humiliation,
wounded feelings, or grave anxiety resulted x x x” in disclaiming unilateral grants as proper
subjects in their collective bargaining negotiations. While the law makes it an obligation
for the employer and the employees to bargain collectively with each other, such
compulsion does not include the commitment to precipitately accept or agree to the
proposals of the other. All it contemplates is that both parties should approach the
negotiation with an open mind and make reasonable effort to reach a common ground of
agreement.
In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither the
second Notice of Strike nor the records of these cases substantiate a finding of unfair labor
practice. It is not enough that the union believed that the employer committed acts of
unfair labor practice when the circumstances clearly negate even a prima facie showing to
warrant such a belief. (Tiu v. National Labor Relations Commission, G.R. No. 123276, 18
P a g e | 17
Employers are accorded rights and privileges to assure their self-determination and
independence and reasonable return of capital. (Capitol Medical Center, Inc. v. Meris, G.R.
No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass of privileges comprises
the so-called management prerogatives. (Capitol Medical Center, Inc. v. Meris, G.R. No.
155098, 16 September 2005, 470 SCRA 125, 136.) In this connection, the rule is that good
faith is always presumed. As long as the company’s exercise of the same is in good faith to
advance its interest and not for purpose of defeating or circumventing the rights of
employees under the law or a valid agreement, such exercise will be upheld. (Capitol
Medical Center, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.)
You can choose from either #1, 4 or 5 or a combination of any of those mentioned in the ruling...
FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THEPHILIPPINES (FASAP), PETITIONER, VS.
PHILIPPINE AIRLINES, INC. (PAL), PATRIA CHIONG & CA
G.R. No. 178083, July 23, 2008
Facts: Petitioner FASAP is the duly certified collective bargaining representative of PAL flight
attendants and stewards, or collectively known as PAL cabin crew personnel. Respondent
PAL is a domestic corporation organized and existing under the laws of the Republic of the
Philippines, operating as a common carrier transporting passengers and cargo through
aircraft.
On June 15, 1998, PAL retrenched 5,000 of its employees, including more than 1,400 of its
cabin crew personnel, to take effect on July 15, 1998. PAL adopted the retrenchment
scheme allegedly to cut costs and mitigate huge financial losses as a result of a downturn in
the airline industry brought about by the Asian financial crisis. During said period, PAL
claims to have incurred P90 billion in liabilities, while its assets stood at P85 billion.
Total -- 1,473.
PAL determined the cabin crew personnel efficiency ratings through an evaluation of the
individual cabin crew member's overall performance for the year 1997alone. Their
respective performance during previous years, i.e., the whole duration of service with PAL
of each cabin crew personnel, was not considered.
ART. 283. Closure of establishment and reduction of personnel.- The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundancy, the worker
P a g e | 19
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month
pay or to at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
The law recognizes the right of every business entity to reduce its work force if the
same is made necessary by compelling economic factors which would endanger its
existence or stability. Where appropriate and where conditions are in accord with law and
jurisprudence, the Court has authorized valid reductions in the work force to forestall
business losses, the hemorrhaging of capital, or even to recognize an obvious reduction in
the volume of business which has rendered certain employees redundant. Retrenchment is
only a measure of last resort, when other less drastic means have been tried and found to
be inadequate.
The burden clearly falls upon the employer to prove economic or business losses with
sufficient supporting evidence. Its failure to prove these reverses or losses necessarily
means that the employee's dismissal was not justified. ] Any claim of actual or potential
business losses must satisfy certain established standards, all of which must concur, before
any reduction of personnel becomes legal. These are:
(1) That retrenchment is reasonably necessary and likely to prevent business losses which,
if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if
only expected, are reasonably imminent as perceived objectively and in good faith by the
employer;
(2) That the employer served written notice both to the employees and to the Department
of Labor and Employment at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one (1)
month pay or at least one-half (½) month pay for every year of service, whichever is
higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees' right to
security of tenure; and,
(5) That the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as status, efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.
The foregoing principle holds true with respect to PAL's claim in its Comment that the only
issue is the manner by which its retrenchment scheme was carried out because
the validity of the scheme has been settled in its favor. Respondents might have confused
the right to retrench with its actual retrenchment program, treating them as one and the
same. The first, no doubt, is a valid prerogative of management; it is a right that exists for
all employers. As to the second, it is always subject to scrutiny in regard to faithful
compliance with substantive and procedural requirements which the law and
jurisprudence have laid down. The right of an employer to dismiss an employee differs
from and should not be confused with the manner in which such right is exercised.
[on #4 above]
It is almost an inflexible rule that employers who contemplate terminating the services of
their workers cannot be so arbitrary and ruthless as to find flimsy excuses for their
decisions. This must be so considering that the dismissal of an employee from work
involves not only the loss of his position but more important, his means of livelihood.
Applying this caveat, it is therefore incumbent for the employer, before putting into effect
any retrenchment process on its work force, to show by convincing evidence that it was
being wrecked by serious financial problems. Simply declaring its state of insolvency or its
impending doom will not be sufficient. To do so would render the security of tenure of
workers and employees illusory. Any employer desirous of ridding itself of its employees
could then easily do so without need to adduce proof in support of its action. We can not
countenance this. Security of tenure is a right guaranteed to employees and workers by the
Constitution and should not be denied on the basis of mere speculation.
On the requirement that the prerogative to retrench must be exercised in good faith, we
have ruled that the hiring of new employees and subsequent rehiring of "retrenched"
employees constitute bad faith; that the failure of the employer to resort to other less
drastic measures than retrenchment seriously belies its claim that retrenchment was done
in good faith to avoid losses; and that the demonstrated arbitrariness in the selection of
which of its employees to retrench is further proof of the illegality of the employer's
retrenchment program, not to mention its bad faith.
[on #5 above]
Prominent from the above data ( in facts) is the retrenchment of cabin crew personnel
due to "other reasons" which, however, are not specifically stated and shown to be for a
valid cause. This is not allowed because it has no basis in fact and in law.
Moreover, in assessing the overall performance of each cabin crew personnel, PAL only
considered the year 1997. This makes the evaluation of each cabin attendant's efficiency
rating capricious and prejudicial to PAL employees covered by it. By discarding the cabin
crew personnel's previous years of service and taking into consideration only one year's
worth of job performance for evaluation, PAL virtually did away with the concept of
seniority, loyalty and past efficiency, and treated all cabin attendants as if they were on
equal footing, with no one more senior than the other.
Nothing was heard from the retrenched employees, until February 1997 or about two and
half years after their separation from the company, when herein petitioners wrote
respondent demanding payment of retirement benefits under the CBA. They claimed that
they were qualified for optional retirement after having rendered services for at least ten
(10) years when they were retrenched on August 18, 1994.
[Labor arbiter dismissed their claims. NLRC reversed.] CA declared that petitioners were no
longer entitled to retirement benefits after having received the separation pay, and were
precluded from claiming such benefits because of their quitclaims.
Issue: Whether these retrenched employees that had already received their separation pay can
still recover retirement benefits.
Held: NO. (1) The retirement plan of respondent company reveals that an employee who was
terminated for cause is not entitled to retirement benefits and thus explicitly prohibits the
recovery of retirement benefits in cases of terminations for cause. Here, there is no
dispute that petitioners were separated from the service for cause, as it was due to a valid
retrenchment undertaken by respondent company. Unarguably, retrenchment is
recognized as one of the authorized causes for termination of employment under Article
283 of the Labor Code, which states:
The employer may also terminate the employment of any employee due to
the installation of labor-saving devices, redundancy, retrenchment to prevent losses
or the closing or cessation of operations of the establishment or undertaking unless
the closing is for the purpose of circumventing the provisions of this title, by
serving a written notice on the workers and the Department of Labor and
Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundancy, the
worker affected thereby shall be entitled to a separation pay equivalent to at least
one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent
to at least one (1) month pay or at least one-half (1/2) month pay for every year of
service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year.
P a g e | 22
Having been separated from employment due to an authorized cause, petitioners are
barred from receiving retirement benefits pursuant to Article X(E) of respondent’s
retirement plan. With the inclusion of such provision in the retirement plan, respondent
categorically disallows payment of retirement benefits to retrenched employees. They are
only entitled to payment of separation pay in accordance with Article 283 of the Labor
Code.
In their Reply, petitioners argue that the term “terminations for cause” under
Article X(E) of the retirement plan should be read to only include terminations for “just
cause” under Article 282 of the Labor Code, or to situations wherein it is the employee that
is at fault. This Court is not persuaded by this argument. Petitioners concede that the
Labor Code allows terminations by the employer for “just causes” under Article 282 or
“authorized causes” under Articles 283 and 284. Terminations covered by Articles 282 to
284 are all terminations by the employer for a lawful cause. In the past, this Court has had
occasion to use the term “dismissal for cause” to refer to dismissals for just and/or
authorized cause. Respondent’s retirement plan in referring to “terminations for cause”
plainly does not distinguish between just cause and authorized causes for
termination. Moreover, there is nothing in the said retirement plan which limits the term
“terminations for cause” to terminations under Article 282.
(2) Apart from the abovementioned provision in the retirement plan, provisions of the CBA
between the company and its employees further militate against petitioners’ contention
that they are entitled to both separation pay and retirement benefits. [It] readily shows
that retirement benefits shall be granted only to those employees who, after rendering at
least ten (10) years of continuous services, would retire upon reaching the mandatory
retirement age, or would avail of optional voluntary retirement.
In this instance to resolve all doubts as to the proper interpretation of the relevant
CBA provisions, it was imperative for the CA to determine the true intent of the parties to
the agreement. This juristic principle is supported by the following provision of law found
in the New Civil Code:
Thus, while the CBA, on its face, does not contain an express prohibition of payment of
retirement benefits to retrenched employees, the parties may still prove it by means of
contemporaneous and subsequent acts of the parties to the agreement, such as the
execution of the affidavits by the NASLU-FFW officers and respondent’s managers.
(3) We likewise uphold the CA’s finding that petitioners voluntarily executed and signed a
release and quitclaim after receiving their separation package, acknowledging full and final
payment of all benefits that they may be entitled to in relation to their employment. The
validity of quitclaims executed by laborers has long been recognized in this
jurisdiction. In Periquet v. National Labor Relations Commission, this Court ruled that not
all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement of the claims of the
employee, it is binding on the parties and may not later be disowned simply because of a
change of mind. Such legitimate waivers resulting from voluntary settlements of laborer’s
claims should be treated and upheld as the law between the parties.
In the instant case, there is no showing that petitioners were forced or duped by
respondent into signing the release and quitclaim. In their sworn quitclaim, they freely
declared that they received full separation pay as well as all other amounts due them by
reason of their employment. Each quitclaim was written in English and in the Visayan
dialect which petitioners very well understand. Besides, the quitclaim represents a
reasonable and fair settlement of petitioners’ claims as the separation package consisted of
two (2) months salary for every year of service, leave balance credits, 13 th month pay,
uniform plus rice subsidy differential, salary differential and signing bonus. Indeed, nothing
on the face of their quitclaim has been shown as unconscionable. In the absence of
evidence showing coercion or intimidation in its execution, we are constrained to uphold
the appellate court’s conclusion that the execution of the release and quitclaim was valid.