G.R. No. 185556 March 28, 2011 SUPREME STEEL CORPORATION, Petitioner, vs.

NAGKAKAISANG MANGGAGAWA NG SUPREME INDEPENDENT UNION NMS!IND!APL", Respondent. DECISION NAC#URA, J.: This petition for review on certiorari assails the Court of Appeals CA! Decision " dated Septe#$er %&, '&&(, and Resolution dated Dece#$er ), '&&(, which affir#ed the findin* of the National +a$or Relations Co##ission N+RC! that petitioner violated certain provisions of the Collective ,ar*ainin* A*ree#ent C,A!. Petitioner Supre#e Steel Pipe Corporation is a do#estic corporation en*a*ed in the $usiness of #anufacturin* steel pipes for do#estic and forei*n #ar-ets. Respondent Na*-a-aisan* .an**a*awa n* Supre#e Independent /nion is the certified $ar*ainin* a*ent of petitioner0s ran-1and1file e#plo2ees. The C,A' in 3uestion was e4ecuted $2 the parties to cover the period fro# 5une ", '&&% to .a2 %", '&&(. The Case On 5ul2 '6, '&&7, respondent filed a notice of stri-e with the National Conciliation and .ediation ,oard NC.,! on the *round that petitioner violated certain provisions of the C,A. The parties failed to settle their dispute. Conse3uentl2, the Secretar2 of +a$or certified the case to the N+RC for co#pulsor2 ar$itration pursuant to Article '8% *! of the +a$or Code. Respondent alle*ed eleven C,A violations, delineated as follows9 A. Denial to four e#plo2ees of the C,A1 provided wa*e increase Article :II, Section " of the C,A provides9 Section ". The CO.PAN; shall *rant a *eneral wa*e increase, over and a$ove to all e#plo2ees, accordin* to the followin* schedule9 A. Effective 5une ", '&&% P").&& per wor-in* da2< ,. Effective 5une ", '&&) P"'.&& per wor-in* da2< and C. Effective 5une ", '&&7 P"'.&& per wor-in* da2.% Respondent alle*ed that petitioner has repeatedl2 denied the annual C,A increases to at least four individuals9 5uan Ni=o, Re2naldo Acosta, Ro##el Talavera, and Eddie Dala*on. Accordin* to respondent, petitioner *ives an anniversar2 increase to its e#plo2ees upon reachin* their first 2ear of e#plo2#ent. The four e#plo2ees received their respective anniversar2 increases and petitioner used such anniversar2 increase to >ustif2 the denial of their C,A increase for the 2ear. ) Petitioner e4plained that it has $een the co#pan20s lon* standin* practice that upon reachin* one 2ear of service, a wa*e ad>ust#ent is *ranted, and, once wa*es are ad>usted, the increase provided for in the C,A for that 2ear is no lon*er i#ple#ented. Petitioner clai#ed that this practice was not o$>ected to $2 respondent as evidenced $2 the e#plo2ees0 pa2 slips. 7 Respondent countered that petitioner failed to prove that, as a #atter of co#pan2 practice, the anniversar2 increase too- the place of the C,A increase. It contended that all e#plo2ees should receive the C,A stipulated increase for the 2ears '&&% to '&&7. 8 ,. Contractin*1out la$or Article II, Section 8 of the C,A provides9 Section 8. Prohi$ition of Contractin* Out of ?or- of .e#$ers of ,ar*ainin* /nit. Thirt2 %&! da2s fro# the si*nin* of this C,A, contractual e#plo2ees in all depart#ents, e4cept ?arehouse and Pac-in* Section, shall $e phased out. Those contractual e#plo2ees who are presentl2 in the wor-force of the CO.PAN; shall no lon*er $e allowed to wor- after the e4piration of their contracts without pre>udice to $ein* hired as pro$ationar2 e#plo2ees of the CO.PAN;. 6 Respondent clai#ed that, contrar2 to this provision, petitioner hired te#porar2 wor-ers for five #onths $ased on unifor#l2 worded e#plo2#ent contracts, renewa$le for five #onths, and assi*ned the# to al#ost all of the depart#ents in the co#pan2. It pointed out that, under the C,A, te#porar2 wor-ers are allowed onl2 in the ?arehouse and Pac-in* Section< conse3uentl2, e#plo2#ent of contractual

e#plo2ees outside this section, whether direct or a*enc21hired, was a$solutel2 prohi$ited. ?orse, petitioner never re*ulari@ed the# even if the position the2 occupied and the services the2 perfor#ed were necessar2 and desira$le to its $usiness. /pon the e4piration of their contracts, these wor-ers would $e replaced with other wor-ers with the sa#e e#plo2#ent status. This sche#e is a clear circu#vention of the laws on re*ular e#plo2#ent. ( Respondent ar*ued that the ri*ht to self1or*ani@ation *oes $e2ond the #aintenance of union #e#$ership. It e#phasi@ed that the C,A #aintains a union shop clause which *ives the re*ular e#plo2ees %& da2s within which to >oin respondent as a condition for their continued e#plo2#ent. Respondent #aintained that petitioner0s persistent refusal to *rant re*ular status to its e#plo2ees, such as Dindo ,uella, who is assi*ned in the Aalvani@in* Depart#ent, violates the e#plo2ees0 ri*ht to self1or*ani@ation in two wa2s9 "! the2 are deprived of a representative for collective $ar*ainin* purposes< and '! respondent is deprived the ri*ht to e4pand its #e#$ership. Respondent contended that a union0s stren*th lies in its nu#$er, which $eco#es crucial especiall2 durin* ne*otiations< after all, an e#plo2er will not $ar*ain seriousl2 with a union whose #e#$ership constitutes a #inorit2 of the total wor-force of the co#pan2. Accordin* to respondent, out of the 7&& e#plo2ees of the co#pan2, onl2 ")6 are union #e#$ers, and at least 8& e#plo2ees would have $een eli*i$le for union #e#$ership had the2 $een reco*ni@ed as re*ular e#plo2ees.B Cor its part, petitioner ad#itted that it hired te#porar2 wor-ers. It purportedl2 did so to cope with the seasonal increase of the >o$ orders fro# a$road. In order to co#pl2 with the >o$ orders, petitioner hired the te#porar2 wor-ers to help the re*ular wor-ers in the production of steel pipes. Petitioner #aintained that these wor-ers do not affect respondent0s #e#$ership. Petitioner clai#ed that it a*reed to ter#inate these te#porar2 e#plo2ees on the condition that the re*ular e#plo2ees would have to perfor# the wor- that these e#plo2ees were perfor#in*, $ut respondent refused. Respondent0s refusal alle*edl2 proved that petitioner was not contractin* out the services $ein* perfor#ed $2 union #e#$ers. Cinall2, petitioner insisted that the hirin* of te#porar2 wor-ers is a #ana*e#ent prero*ative. "& C. Cailure to provide shuttle service Petitioner has alle*edl2 rene*ed on its o$li*ation to provide shuttle service for its e#plo2ees pursuant to Article :ID, Section 6 of the C,A, which provides9 Section 6. Shuttle Service. As per co#pan2 practice, once the co#pan2 vehicle used for the purpose has $een reconditioned."" Respondent clai#ed that the co#pan2 vehicle which would $e used as shuttle service for its e#plo2ees has not $een reconditioned $2 petitioner since the si*nin* of the C,A on Ce$ruar2 '8, '&&)."' Petitioner e4plained that it is difficult to i#ple#ent this provision and si#pl2 denied that it has rene*ed on its o$li*ation."% D. Refusal to answer for the #edical e4penses incurred $2 three e#plo2ees Respondent asserted that petitioner is lia$le for the e4penses incurred $2 three e#plo2ees who were in>ured while in the co#pan2 pre#ises. This lia$ilit2 alle*edl2 ste#s fro# Article DIII, Section ) of the C,A which provides9 Section ). The CO.PAN; a*rees to provide first aid #edicine and first aid service and consultation free of char*e to all its e#plo2ees. ") Accordin* to respondent, petitioner0s definition of what constitutes first aid service is li#ited to the $are #ini#u# of treatin* in>ured e#plo2ees while still within the co#pan2 pre#ises and referrin* the in>ured e#plo2ee to the Chinese Aeneral Eospital for treat#ent, $ut the travel e4pense in *oin* to the hospital is char*ed to the e#plo2ee. Thus, when Al$erto Auevarra and 5o$ Cani@ares, union #e#$ers, were in>ured, the2 had to pa2 PB&.&& each for transportation e4penses in *oin* to the hospital for treat#ent and *oin* $ac- to the co#pan2 thereafter. In the case of Rodri*o Solitario, petitioner did not even shoulder the cost of the first aid #edicine, a#ountin* to P',""%.&&, even if he was in>ured durin* the co#pan2 sportsfest, $ut the a#ount was deducted, instead, fro# his salar2. Respondent insisted that this violates the a$ove cited provision of the C,A."7
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Petitioner insisted that it provided #edicine and first aid assistance to Rodri*o Solitario. 1avvphi1 It alle*ed that the latter cannot clai# hospitali@ation $enefits under Article DIII, Section " "8 of the C,A $ecause he was not confined in a hospital."6 E. Cailure to co#pl2 with the ti#e1off with pa2 provision Article II, Section ( of the C,A provides9 Section (. Ti#e1Off with Pa2. The CO.PAN; shall *rant to the /NION0s dul2 authori@ed representativeFs or to an2 e#plo2ee who are on dut2, if su##oned $2 the /NION to testif2, if hisFher presence is necessar2, a paid ti#e1off for the handlin* of *rievances, cases, investi*ations, la$or1#ana*e#ent conferences provided that if the venue of the case is outside Co#pan2 pre#ises involvin* GtheH i#ple#entation and interpretation of the C,A, two '! representatives of the /NION who will attend the said hearin* shall $e considered ti#e1off with pa2. If an e#plo2ee on a ni*ht shift attends *rievance on la$or1related cases and could not report for wor- due to ph2sical condition, he #a2 avail of union leave without need of the two '! da2s prior notice."( Respondent contended that under the said provision, petitioner was o$li*ed to *rant a paid ti#e1 off to respondent0s dul2 authori@ed representative or to an2 e#plo2ee who was on dut2, when su##oned $2 respondent to testif2 or when the e#plo2ee0s presence was necessar2 in the *rievance hearin*s, #eetin*s, or investi*ations."B Petitioner ad#itted that it did not honor the clai# for wa*es of the union officers who attended the *rievance #eetin*s $ecause these #eetin*s were initiated $2 respondent itself. It ar*ued that since the union officers were perfor#in* their functions as such, and not as e#plo2ees of the co#pan2, the latter should not $e lia$le. Petitioner further asserted that it is not lia$le to pa2 the wa*es of the union officers when the #eetin*s are held $e2ond co#pan2 ti#e %9&& p.#.!. It clai#ed that ti#e1off with pa2 is allowed onl2 if the venue of the #eetin* is outside co#pan2 pre#ises and the #eetin* involves the i#ple#entation and interpretation of the C,A.'& In repl2, respondent averred that the a$ove 3uoted provision does not #a-e a 3ualification that the #eetin*s should $e held durin* office hours 69&& a.#. to %9&& p.#.!< hence, for as lon* as the presence of the e#plo2ee is needed, ti#e spent durin* the *rievance #eetin* should $e paid.'" C. Disitors0 free access to co#pan2 pre#ises Respondent char*ed petitioner with violation of Article II, Section 6 of the C,A which provides9 Section 6. Cree Access to Co#pan2 Pre#ises. +ocal /nion and Cederation officers su$>ect to co#pan20s securit2 #easure! shall $e allowed durin* wor-in* hours to enter the CO.PAN; pre#ises for the followin* reasons9 a. To investi*ate *rievances that have arisen< $. To interview /nion Officers, Stewards and #e#$ers durin* reasona$le hours< and c. To attend to an2 #eetin* called $2 the .ana*e#ent or the /NION. '' A. Cailure to co#pl2 with reportin* ti#e1off provision Respondent #aintained that a $rownout is covered $2 Article :II, Section % of the C,A which states9 Section %. Reportin* Ti#e1Off. The e#plo2ees who have reported for wor- $ut are una$le to continue wor-in* $ecause of e#er*encies such as t2phoons, flood, earth3ua-e, transportation stri-e, where the CO.PAN; is affected and in case of fire which occurs in the $loc- where the ho#e of the e#plo2ee is situated and not >ust across the street and serious illness of an i##ediate #e#$er of the fa#il2 of the e#plo2ee livin* with hi#Fher and no one in the house can $rin* the sic- fa#il2 #e#$er to the hospital, shall $e paid as follows9 a. At least half da2 if the wor- stoppa*e occurs within the first four )! hours of wor-< and $. A whole da2 if the wor- stoppa*e occurs after four )! hours of wor-. '% Respondent averred that petitioner paid the e#plo2ees0 salaries for one hour onl2 of the four1 hour $rownout that occurred on 5ul2 '7, '&&7 and refused to pa2 for the re#ainin* three hours.

In defense, petitioner si#pl2 insisted that $rownouts are not included in the a$ove list of e#er*encies.') Respondent re>oined that, under the principle of e>usde# *eneris, $rownouts or power outa*es co#e within the Ie#er*enciesI conte#plated $2 the C,A provision. Althou*h $rownouts were not specificall2 identified as one of the e#er*encies listed in the said C,A provision, it cannot $e denied that $rownouts fall within the sa#e -ind or class of the enu#erated e#er*encies. Respondent #aintained that the intention of the provision was to co#pensate the e#plo2ees for occurrences which are $e2ond their control, and power outa*e is one of such occurrences. It insisted that the list of e#er*encies is not an e4haustive list $ut #erel2 *ives an idea as to what constitutes an actual e#er*enc2 that is $e2ond the control of the e#plo2ee. '7 E. Dis#issal of Diosdado .ada2a* Diosdado .ada2a* was e#plo2ed as welder $2 petitioner. Ee was served a Notice of Ter#ination dated .arch "), '&&7 which read9 Please consider this as a Notice of Ter#ination of e#plo2#ent effective .arch "), '&&7 under Art. '() of the +a$or Code and its I#ple#entin* Rules. This is $ased on the #edical certificate su$#itted $2 2our attendin* ph2sician, +uc2 Anne E. .a#$a, ..D., 5ose R. Re2es .e#orial .edical Center dated .arch 6, '&&7 with the followin* dia*nosis9 JDia$etes .ellitus T2pe '0 Please $e *uided accordin*l2. '8 Respondent contended that .ada2a*0s dis#issal fro# e#plo2#ent is ille*al $ecause petitioner failed to o$tain a certification fro# a co#petent pu$lic authorit2 that his disease is of such nature or at such sta*e that it cannot $e cured within si4 #onths even after proper #edical treat#ent. Petitioner also failed to prove that .ada2a*0s continued e#plo2#ent was pre>udicial to his health or that of his collea*ues.'6 Petitioner, on the other hand, alle*ed that .ada2a* was validl2 ter#inated under Art. '() '( of the +a$or Code and that his le* was a#putated $2 reason of dia$etes, which disease is not wor-1 related. Petitioner clai#ed that it was willin* to pa2 .ada2a* "% da2s for ever2 2ear of service $ut respondent was as-in* for additional $enefits.'B I. Denial of paternit2 leave $enefit to two e#plo2ees Article :D, Section ' of the C,A provides9 Section '. Paternit2 +eave. As per lawG,H GtHhe Co#pan2 shall, as #uch as possi$le, pa2 paternit2 leave within ' wee-s fro# su$#ission of docu#ents.%& Petitioner ad#itted that it denied this $enefit to the clai#ants for failure to o$serve the re3uire#ent provided in the I#ple#entin* Rules and Re*ulations of Repu$lic Act No. ("(6 Paternit2 +eave Act of "BB7!, that is, to notif2 the e#plo2er of the pre*nanc2 of their wives and the e4pected date of deliver2. %" Respondent ar*ued that petitioner is rel2in* on technicalities $2 insistin* that the denial was due to the two e#plo2ees0 failure to notif2 it of the pre*nanc2 of their respective spouses. It #aintained that the notification re3uire#ent runs counter to the spirit of the law. Respondent averred that, on *rounds of social >ustice, the oversi*ht to notif2 petitioner should not $e dealt with severel2 $2 den2in* the two clai#ants this $enefit.%' 5. Discri#ination and harass#ent Accordin* to respondent, petitioner was conte#ptuous over union officers for protectin* the ri*hts of union #e#$ers. In an affidavit e4ecuted $2 Chito Auada=a, union secretar2, he narrated that Alfred Navarro, Officer1in1Char*e of the Pac-in* Depart#ent, had $een harsh in dealin* with his fellow e#plo2ees and would even challen*e so#e wor-ers to a fi*ht. Ee averred that Navarro had an over$earin* attitude durin* wor- and *rievance #eetin*s. In Nove#$er '&&), Navarro re#oved Auada=a, a fore#an, fro# his position and installed another fore#an fro# another section. The action was alle*edl2 $rou*ht a$out $2 earlier *rievances a*ainst Navarro0s a$use. Petitioner confir#ed his transfer to another section in violation of Article DI, Section 8 of the C,A,%% which states in part9
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Section 8. Transfer of E#plo2#ent. K No per#anent positional transfer outside can $e effected $2 the CO.PAN; without discussin* the *rounds $efore the Arievance Co##ittee. All transfer shall $e with advance notice of two '! wee-s. No transfer shall interfere with the e#plo2ee0s e4ercise of the ri*ht to self1or*ani@ation. %) Respondent also alle*ed that Ariel .ari*ondon, union president, was also penali@ed for wor-in* for his fellow e#plo2ees. One ti#e, .ari*ondon in3uired fro# #ana*e#ent a$out #atters concernin* ta4 discrepancies $ecause it appeared that non1ta4a$le ite#s were included as part of ta4a$le inco#e. Thereafter, .ari*ondon was transferred fro# one area of operation to another until he was alle*edl2 forced to accept #enial >o$s of puttin* control ta*s on steel pipes, a -ind of >o$ which did not re3uire his "8 2ears of e4pertise in e4a#inin* steel pipes. %7 Ed*ardo .asan*ca2, respondent0s Second Dice President, e4ecuted an affidavit wherein he cited three instances when his salar2 was withheld $2 petitioner. The first incident happened on .a2 '(, '&&7 when petitioner refused to *ive his salar2 to his wife despite presentation of a proof of identification ID! and letter of authori@ation. On 5une "(, '&&7, petitioner also refused to release his salar2 to Pascual +a@aro despite su$#ission of a letter of authorit2 and his ID and, as a result, he was una$le to $u2 #edicine for his child who was sufferin* fro# asth#a attac-. The third instance happened on 5une '7, '&&7 when his salar2 was short of P)7&.&&< this a#ount was however released the followin* wee-.%8 Petitioner e4plained that the transfer of the e#plo2ee fro# one depart#ent to another was the result of downsi@in* the ?arehouse Depart#ent, which is a valid e4ercise of #ana*e#ent prero*ative. In Auada=a0s case, Navarro denied that he was $ein* harsh $ut clai#ed that he #erel2 wanted to stress so#e points. Petitioner e4plained that Auada=a was transferred when the section where he was assi*ned was phased out due to the installation of new #achines. Petitioner pointed out that the other wor-ers assi*ned in said section were also transferred. %6 Cor the petitioner, E##anuel .endiola, Production Superintendent, also e4ecuted an affidavit attestin* that the alle*ation of Ariel .ari*ondon, that he was harassed and was a victi# of discri#ination for $ein* respondent0s President, had no $asis. .ari*ondon pointed out that after the >o$ order was co#pleted, he was reassi*ned to his ori*inal shift and *roup. %( Petitioner also su$#itted the affidavits of Eli@a$eth +laneta A*uilar, dis$urse#ent cler- and hirin* staff, and Ro#eo T. S2, Assistant Personnel .ana*er. A*uilar e4plained that she did not #ean to harass .asan*ca2, $ut she #erel2 wanted to #a-e sure that he would receive his salar2. Affiant S2 ad#itted that he refused to release .asan*ca20s salar2 to a wo#an who presented herself as his .asan*ca20s! wife since no$od2 could attest to it. Ee clai#ed that such is not an act of harass#ent $ut a precautionar2 #easure to protect .asan*ca20s interest. %B L. Non1i#ple#entation of CO+A in ?a*e Order Nos. R,III1"& and "" Respondent posited that an2 for# of wa*e increase *ranted throu*h the C,A should not $e treated as co#pliance with the wa*e increase *iven throu*h the wa*e $oards. Respondent clai#ed that, for a nu#$er of 2ears, petitioner has co#plied with Article :II, Section ' of the C,A which provides9 Section '. All salar2 increase *ranted $2 the CO.PAN; shall not $e credited to an2 future contractual or le*islated wa*e increases. ,oth increases shall $e i#ple#ented separate and distinct fro# the increases stated in this A*ree#ent. It should $e understood $2 $oth parties that contractual salar2 increase are separate and distinct fro# le*islated wa*e increases, thus the increase $rou*ht $2 the latter shall $e en>o2ed also $2 all covered e#plo2ees. )& Respondent #aintained that for ever2 wa*e order that was issued in Re*ion %, petitioner never hesitated to co#pl2 and *rant a si#ilar increase. Specificall2, respondent cited petitioner0s co#pliance with ?a*e Order No. R,III1"& and *rant of the #andated P"7.&& cost of livin* allowance CO+A! to all its e#plo2ees. Petitioner, however, stopped i#ple#entin* it to non1 #ini#u# wa*e earners on 5ul2 '), '&&7. It contended that this violates Article "&& of the +a$or Code which prohi$its the di#inution of $enefits alread2 en>o2ed $2 the wor-ers and that such *rant of $enefits had alread2 ripened into a co#pan2 practice.)" Petitioner e4plained that the CO+A provided under ?a*e Order No. R,III1"& applies to #ini#u# wa*e earners onl2 and that, $2 #ista-e, it i#ple#ented the sa#e across the $oard or to all its

e#plo2ees. After reali@in* its #ista-e, it stopped inte*ratin* the CO+A to the $asic pa2 of the wor-ers who were earnin* a$ove the #ini#u# wa*e.)' The N+RC0s Rulin* Out of the eleven issues raised $2 respondent, ei*ht were decided in its favor< two denial of paternit2 leave $enefit and discri#ination of union #e#$ers! were decided in favor of petitioner< while the issue on visitor0s free access to co#pan2 pre#ises was dee#ed settled durin* the #andator2 conference. The dispositive portion of the N+RC Decision dated .arch %&, '&&6 reads9 ?EERECORE, Supre#e Steel Pipe Corporation the Co#pan2! is here$2 ordered to9 "! i#ple#ent *eneral wa*e increase to 5uan Ni=o, Eddie Dala*on and Ro##el Talavera pursuant to the C,A in 5une '&&%, '&&) and '&&7< '! re*ulari@e wor-ers Dindo ,uella and 8& other wor-ers and to respect C,A provision on contractin*1out la$or< %! recondition the co#pan2 vehicle pursuant to the C,A< )! answer for e4penses involved in providin* first aid services includin* transportation e4penses for this purpose, as well as to rei#$urse Rodri*o Solitario the su# of P',""%.&&< 7! pa2 wa*es of union #e#$ersFofficers who attended *rievance #eetin*s as follows9 "! D. Serenilla '! D. .iralpes %! E. .allari )! C. Cru@ 7! 5. Patal$o 8! 5.5. .u=o@ 6! C. Auada=a (! 5. Patal$o B! E. .allari "&! C. Auada=a ""! A. .ari*ondon "'! A. .ari*ondon "%! A. .ari*ondon ")! E. .asan*ca2 "7! A. .ari*ondon "8! E. .asan*ca2 "6! A. .ari*ondon "(! C. Servano "B! R. Estrella '&! A. .ari*ondon 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 P""7.')%67 P""7.(&8'7 P"&(.68'7 P"").87%"% P"8".&8'7 P"""."B%67 P78.B)%67 P"8".&8'7 P"&(.68'7 P""%.((67 P"6&.%&8'7 P"(".88 P"(".88 P"67.67 P"(".88 P"67.67 P"(".88 P"6).&' P"(".7& P"(".88
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8! pa2 wor-ers their salar2 for the % hours of the ) hour $rownout as follows9 "! Ala*on, 5r., Pedro '! Aliwalas, Cristeto %! ,alta@ar, Roderic)! ,a=e@, Oliver 7! Prucal, Eduardo 8! Cali#3uin, Rodillo 6! Clave, Arturo (! Cadavero, Re2 B! De +eon, Ro#ulo "&! +actao, Noli ""! +a2co, 5r., Dandino "'! +e*aspi, .elencio "%! Muiachon, Ro*elio ")! Sac#ar, Ro$erto "7! Ta*le, Carian "8! Dillavicencio, Dictor "6! A*ra, Ro#ale "(! ,asa$e, +uis "B! ,ornasal, 5oel '&! Casitas, Santia*o '"! Cela>es, ,onifacio ''! Avenido, 5err2 '%! Aa*arin, Alfredo ')! +a2son, Paulo '7! +ledo, Asale# '8! .ari*ondon, Ariel '6! Orcena, Sonnie '(! Servano, Cernando 'B! Dersola, Rodri*o 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 P"%&.&(67 P"&(.78'7 P B&."(67 P B&.B%67 P"'8.&"7 P"%".&%8' P"'7.8) P"&(.78'7 P"').%7 P"'8.&"7 P"%&.7%67 P"'6.8% P"%&.77'7 P"&(.B%67 P"'B.%%67 P"'8.&"7 P"'8.&"7 P"'(.7767 P"'6.7% P"'(.7767 P"'(."('7 P"%%.')(6 P"&(.B%67 P"%".6)7 P"'(.7767 P"%".6)7 P"'8.&"7 P"'8.&"7 P"'8.&"7

6! reinstate Diosdado .ada2a* to his for#er position without loss of seniorit2 ri*hts and to pa2 full $ac-wa*es and other $enefits fro# ") .arch '&&7, date of dis#issal, until the date of this Decision< if reinstate#ent is i#possi$leG,H to pa2 separation pa2 of one #onth pa2 for ever2 2ear of service in addition to $ac-wa*es< (! dis#iss the clai# for paternit2 leave for failure of clai#ants to o$serve the re3uire#ents< B! dis#iss the char*e of harass#ent and discri#ination for lac- of #erit< and to "&! continue to i#ple#ent CO+A under ?a*e Order Nos. GR,IIIH1"& N "" across the $oard. The issue on Disitors0 Cree Access to Co#pan2 Pre#ises is dis#issed for $ein* #oot and acade#ic after it was settled durin* the scheduled conferences. SO ORDERED.)% Corthwith, petitioner elevated the case to the CA, reiteratin* its ar*u#ents on the ei*ht issues resolved $2 the N+RC in respondent0s favor. The CA0s Rulin* On Septe#$er %&, '&&(, the CA rendered a decision dis#issin* the petition, thus9 ?EERECORE, pre#ises considered, the present petition is here$2 DENIED D/E CO/RSE and accordin*l2 DIS.ISSED, for lac- of #erit. The assailed Decision dated .arch %&, '&&6 and Resolution dated April '(, '&&( of the National +a$or Relations Co##ission in N+RC NCR CC No. &&&%&71&7 are here$2 ACCIR.ED. ?ith costs a*ainst the petitioner. SO ORDERED.)) Accordin* to the CA, petitioner failed to show that the N+RC co##itted *rave a$use of discretion in findin* that it violated certain provisions of the C,A. The N+RC correctl2 held that ever2 e#plo2ee is entitled to the wa*e increase under the C,A despite receipt of an anniversar2 increase. The CA concluded that, $ased on the wordin* of the C,A, which uses the words I*eneral increaseI and Iover and a$ove,I it cannot $e said that the parties have intended the anniversar2 increase to $e *iven in lieu of the C,A wa*e increase. )7 The CA declared that the withdrawal of the CO+A under ?a*e Order No. R,III1"& fro# the e#plo2ees who were not #ini#u# wa*e earners a#ounted to a di#inution of $enefits $ecause such *rant has alread2 ripened into a co#pan2 practice. It pointed out that there was no a#$i*uit2 or dou$t as to who were covered $2 the wa*e order. Petitioner, therefore, #a2 not invo-e error or #ista-e in e4tendin* the CO+A to all e#plo2ees and such act can onl2 $e construed as Ias a voluntar2 act on the part of the e#plo2er.I )8 The CA opined that, considerin* the fore*oin*, the rulin* in Alo$e .ac-a2 Ca$le and Radio Corp. v. N+RC )6 clearl2 did not appl2 as there was no dou$tful or difficult 3uestion involved in the present case. )( The CA sustained the N+RC0s interpretation of Art. DIII, Section ) of the C,A as includin* the e4penses for first aid #edicine and transportation cost in *oin* to the hospital. The CA stressed that the C,A should $e construed li$erall2 rather than narrowl2 and technicall2, and the courts #ust place a practical and realistic construction upon it, *ivin* due consideration to the conte4t in which it was ne*otiated and the purpose which it intended to serve.)B ,ased on the principle of li$eral construction of the C,A, the CA li-ewise sustained the N+RC0s rulin*s on the issues pertainin* to the shuttle service, ti#e1off for attendance in *rievance #eetin*sFhearin*s, and ti#e1off due to $rownouts.7& The CA further held that #ana*e#ent prero*ative is not unli#ited9 it is su$>ect to li#itations found in law, a C,A, or the *eneral principles of fair pla2 and >ustice. It stressed that the C,A provided such li#itation on #ana*e#ent prero*ative to contract1out la$or, and co#pliance with the C,A is #andated $2 the e4press polic2 of the law.7" Cinall2, the CA affir#ed the N+RC0s findin* that .ada2a*0s dis#issal was ille*al. It e#phasi@ed that the $urden to prove that the e#plo2ee0s disease is of such nature or at such sta*e that it cannot $e cured within a period of si4 #onths rests on the e#plo2er. Petitioner failed to su$#it a certification fro# a co#petent pu$lic authorit2 attestin* to such fact< hence, .ada2a*0s dis#issal is ille*al.7'
LABOR CASES: SUPREME STEEL- BPI |4

Petitioner #oved for a reconsideration of the CA0s decision. On Dece#$er ), '&&(, the CA denied the #otion for lac- of #erit.7% Dissatisfied, petitioner filed this petition for review on certiorari, contendin* that the CA erred in findin* that it violated certain provisions of the C,A. The Court0s Rulin* The petition is partl2 #eritorious. It is a fa#iliar and funda#ental doctrine in la$or law that the C,A is the law $etween the parties and co#pliance therewith is #andated $2 the e4press polic2 of the law. If the ter#s of a C,A are clear and there is no dou$t as to the intention of the contractin* parties, the literal #eanin* of its stipulation shall prevail.7) .oreover, the C,A #ust $e construed li$erall2 rather than narrowl2 and technicall2 and the Court #ust place a practical and realistic construction upon it. 77 An2 dou$t in the interpretation of an2 law or provision affectin* la$or should $e resolved in favor of la$or. 78 /pon these well1esta$lished precepts, we sustain the CA0s findin*s and conclusions on all the issues, e4cept the issue pertainin* to the denial of the CO+A under ?a*e Order No. R,III1"& and "" to the e#plo2ees who are not #ini#u# wa*e earners. The wordin* of the C,A on *eneral wa*e increase cannot $e interpreted an2 other wa29 The C,A increase should $e *iven to all e#plo2ees Iover and a$oveI the a#ount the2 are receivin*, even if that a#ount alread2 includes an anniversar2 increase. Stipulations in a contract #ust $e read to*ether, not in isolation fro# one another. 76 Consideration of Article :III, Section ' non1 creditin* provision!, $olsters such interpretation. Section ' states that IGaHll salar2 increase *ranted $2 the co#pan2 shall not $e credited to an2 future contractual or le*islated wa*e increases.I Clearl2 then, even if petitioner had alread2 awarded an anniversar2 increase to its e#plo2ees, such increase cannot $e credited to the IcontractualI increase as provided in the C,A, which is considered Iseparate and distinct.I Petitioner clai#s that it has $een the co#pan2 practice to offset the anniversar2 increase with the C,A increase. It however failed to prove such #aterial fact. Co#pan2 practice, >ust li-e an2 other fact, ha$its, custo#s, usa*e or patterns of conduct #ust $e proven. The offerin* part2 #ust alle*e and prove specific, repetitive conduct that #i*ht constitute evidence of ha$it, 7( or co#pan2 practice. Evidentl2, the pa2 slips of the four e#plo2ees do not serve as sufficient proof. Petitioner0s e4cuse in not providin* a shuttle service to its e#plo2ees is unaccepta$le. In fact, it can hardl2 $e considered as an e4cuse. Petitioner si#pl2 sa2s that it is difficult to i#ple#ent the provision. It relies on the fact that Ino ti#e ele#ent GisH e4plicitl2 stated Gin the C,AH within which to fulfill the underta-in*.I ?e cannot allow petitioner to dill2dall2 in co#pl2in* with its o$li*ation and ta-e undue advanta*e of the fact that no period is provided in the C,A. Petitioner should recondition the co#pan2 vehicle at once, lest it $e char*ed with and found *uilt2 of unfair la$or practice. Petitioner *ave a narrow construction to the wordin* of the C,A when it denied a! rei#$urse#ent for the first1aid #edicines ta-en $2 Rodri*o Solitario when he was in>ured durin* the co#pan2 sportsfest and the transportation cost incurred $2 Al$erto Auevara and 5o$ Cani@ares in *oin* to the hospital, $! pa2#ent of the wa*es of certain e#plo2ees durin* the ti#e the2 spent at the *rievance #eetin*s, and c! pa2#ent of the e#plo2ees0 wa*es durin* the $rownout that occurred on 5ul2 '7, '&&'. As previousl2 stated, the C,A #ust $e construed li$erall2 rather than narrowl2 and technicall2. It is the dut2 of the courts to place a practical and realistic construction upon the C,A, *ivin* due consideration to the conte4t in which it is ne*otiated and the purpose which it is intended to serve. A$surd and illo*ical interpretations should $e avoided.7B A C,A, li-e an2 other contract, #ust $e interpreted accordin* to the intention of the parties.8& The CA was correct in pointin* out that the concerned e#plo2ees were not see-in* hospitali@ation $enefits under Article DIII, Section " of the C,A, $ut under Section ) thereof< hence, confine#ent in a hospital is not a prere3uisite for the clai#. Petitioner should rei#$urse Solitario for the first aid #edicines< after all, it is the dut2 of the e#plo2er to #aintain first1 aid #edicines in its pre#ises.8" Si#ilarl2, Auevara and Cani@ares should also $e rei#$ursed for the transportation cost incurred in *oin* to the hospital. The O#ni$us Rules I#ple#entin* the +a$or

Code provides that, where the e#plo2er does not have an e#er*enc2 hospital in its pre#ises, the e#plo2er is o$li*ed to transport an e#plo2ee to the nearest hospital or clinic in case of e#er*enc2.8' ?e li-ewise a*ree with the CA on the issue of nonpa2#ent of the ti#e1off for attendin* *rievance #eetin*s. The intention of the parties is o$viousl2 to co#pensate the e#plo2ees for the ti#e that the2 spend in a *rievance #eetin* as the C,A provision cate*oricall2 states that the co#pan2 will pa2 the e#plo2ee Ia paid ti#e1off for handlin* of *rievances, investi*ations, la$or1 #ana*e#ent conferences.I It does not #a-e a 3ualification that such #eetin* should $e held durin* office hours or within the co#pan2 pre#ises. The e#plo2ees should also $e co#pensated for the ti#e the2 were prevented fro# wor-in* due to the $rownout. The C,A enu#erates so#e of the instances considered as Ie#er*enciesI and these are It2phoons, flood earth3ua-e, transportation stri-e.I As correctl2 ar*ued $2 respondent, the C,A does not e4clusivel2 enu#erate the situations which are considered Ie#er*encies.I O$viousl2, the -e2 ele#ent of the provision is that e#plo2ees Iwho have reported for wor- are una$le to continue wor-in*I $ecause of the incident. It is therefore reasona$le to conclude that $rownout or power outa*e is considered an Ie#er*enc2I situation. A*ain, on the issue of contractin*1out la$or, we sustain the CA. Petitioner, in effect, ad#its havin* hired Ite#porar2I e#plo2ees, $ut it #aintains that it was an e4ercise of #ana*e#ent prero*ative, necessitated $2 the increase in de#and for its product. Indeed, >urisprudence reco*ni@es the ri*ht to e4ercise #ana*e#ent prero*ative. +a$or laws also discoura*e interference with an e#plo2erOs >ud*#ent in the conduct of its $usiness. Cor this reason, the Court often declines to interfere in le*iti#ate $usiness decisions of e#plo2ers. The law #ust protect not onl2 the welfare of e#plo2ees, $ut also the ri*ht of e#plo2ers. 8% Eowever, the e4ercise of #ana*e#ent prero*ative is not unli#ited. .ana*erial prero*atives are su$>ect to li#itations provided $2 law, collective $ar*ainin* a*ree#ents, and *eneral principles of fair pla2 and >ustice.8) The C,A is the nor# of conduct $etween the parties and, as previousl2 stated, co#pliance therewith is #andated $2 the e4press polic2 of the law.87 The C,A is clear in providin* that te#porar2 e#plo2ees will no lon*er $e allowed in the co#pan2 e4cept in the ?arehouse and Pac-in* Section. Petitioner is $ound $2 this provision. It cannot e4e#pt itself fro# co#pliance $2 invo-in* #ana*e#ent prero*ative. .ana*e#ent prero*ative #ust ta-e a $ac-seat when faced with a C,A provision. If petitioner needed additional personnel to #eet the increase in de#and, it could have ta-en #easures without violatin* the C,A. Respondent clai#s that the te#porar2 e#plo2ees were hired on five1#onth contracts, renewa$le for another five #onths. After the e4piration of the contracts, petitioner would hire other persons for the sa#e wor-, with the sa#e e#plo2#ent status. Plainl2, petitioner0s sche#e see-s to prevent e#plo2ees fro# ac3uirin* the status of re*ular e#plo2ees. ,ut the Court has alread2 held that, where fro# the circu#stances it is apparent that the periods of e#plo2#ent have $een i#posed to preclude ac3uisition of securit2 of tenure $2 the e#plo2ee, the2 should $e struc- down or disre*arded as contrar2 to pu$lic polic2 and #orals. 88 The pri#ar2 standard to deter#ine a re*ular e#plo2#ent is the reasona$le connection $etween the particular activit2 perfor#ed $2 the e#plo2ee in relation to the $usiness or trade of the e#plo2er. The test is whether the for#er is usuall2 necessar2 or desira$le in the usual $usiness or trade of the e#plo2er. If the e#plo2ee has $een perfor#in* the >o$ for at least one 2ear, even if the perfor#ance is not continuous or #erel2 inter#ittent, the law dee#s the repeated and continuin* need for its perfor#ance as sufficient evidence of the necessit2, if not indispensa$ilit2, of that activit2 to the $usiness of the e#plo2er. Eence, the e#plo2#ent is also considered re*ular, $ut onl2 with respect to such activit2 and while such activit2 e4ists. 86 ?e also uphold the CA0s findin* that .ada2a*0s dis#issal was ille*al. It is alread2 settled that the $urden to prove the validit2 of the dis#issal rests upon the e#plo2er. Dis#issal $ased on Article '() of the +a$or Code is no different, thus9 The law is une3uivocal9 the e#plo2er, $efore it can le*all2 dis#iss its e#plo2ee on the *round of disease, #ust adduce a certification fro# a co#petent pu$lic authorit2 that the disease of which
LABOR CASES: SUPREME STEEL- BPI |5

its e#plo2ee is sufferin* is of such nature or at such a sta*e that it cannot $e cured within a period of si4 #onths even with proper treat#ent. 4444 In Triple Eight Integrated Services, Inc. v. NLRC, the Court e4plains wh2 the su$#ission of the re3uisite #edical certificate is for the e#plo2er0s co#pliance, thus9 The re3uire#ent for a #edical certificate under Article '() of the +a$or Code cannot $e dispensed with< otherwise, it would sanction the unilateral and ar$itrar2 deter#ination $2 the e#plo2er of the *ravit2 or e4tent of the e#plo2ee0s illness and thus defeat the pu$lic polic2 on the protection of la$or. 4 4 4 48( Eowever, with respect to the issue of whether the CO+A under ?a*e Order Nos. R,III1"& and "" should $e i#ple#ented across the $oard, we hold a different view fro# that of the CA. No di#inution of $enefits would result if the wa*e orders are not i#ple#ented across the $oard, as no such co#pan2 practice has $een esta$lished. Di#inution of $enefits is the unilateral withdrawal $2 the e#plo2er of $enefits alread2 en>o2ed $2 the e#plo2ees. There is di#inution of $enefits when it is shown that9 "! the *rant or $enefit is founded on a polic2 or has ripened into a practice over a lon* period of ti#e< '! the practice is consistent and deli$erate< %! the practice is not due to error in the construction or application of a dou$tful or difficult 3uestion of law< and )! the di#inution or discontinuance is done unilaterall2 $2 the e#plo2er. 8B To recall, the CA arrived at its rulin* $2 rel2in* on the fact that there was no a#$i*uit2 in the wordin* of the wa*e order as to the e#plo2ees covered $2 it. Cro# this, the CA concluded that petitioner actuall2 #ade no error or #ista-e, $ut acted voluntaril2, in *rantin* the CO+A to all its e#plo2ees. It therefore too- e4ception to the Alo$e .ac-a2 case which, accordin* to it, applies onl2 when there is a dou$tful or difficult 3uestion involved. The CA failed to note that Alo$e .ac-a2 pri#aril2 e#phasi@ed that, for the *rant of the $enefit to $e considered voluntar2, Iit should have $een practiced over a lon* period of ti#e, and #ust $e shown to have $een consistent and deli$erate.I 6& The fact that the practice #ust not have $een due to error in the construction or application of a dou$tful or difficult 3uestion of law is a distinct re3uire#ent. The i#ple#entation of the CO+A under ?a*e Order No. R,III1"& across the $oard, which onl2 lasted for less than a 2ear, cannot $e considered as havin* $een practiced Iover a lon* period of ti#e.I ?hile it is true that >urisprudence has not laid down an2 rule re3uirin* a specific #ini#u# nu#$er of 2ears in order for a practice to $e considered as a voluntar2 act of the e#plo2er, under e4istin* >urisprudence on this #atter, an act carried out within less than a 2ear would certainl2 not 3ualif2 as such. Eence, the withdrawal of the CO+A ?a*e Order No. R,III1"& fro# the salaries of non1#ini#u# wa*e earners did not a#ount to a Idi#inution of $enefitsI under the law. There is also no $asis in en>oinin* petitioner to i#ple#ent ?a*e Order No. R,III1"" across the $oard. Si#ilarl2, no proof was presented showin* that the i#ple#entation of wa*e orders across the $oard has ripened into a co#pan2 practice. In the sa#e wa2 that we re3uired petitioner to prove the e4istence of a co#pan2 practice when it alle*ed the sa#e as defense, at this instance, we also re3uire respondent to show proof of the co#pan2 practice as it is now the part2 clai#in* its e4istence. A$sent an2 proof of specific, repetitive conduct that #i*ht constitute evidence of the practice, we cannot *ive credence to respondent0s clai#. The isolated act of i#ple#entin* a wa*e order across the $oard can hardl2 $e considered a co#pan2 practice, 6" #ore so when such i#ple#entation was erroneousl2 #ade. ?EERECORE, pre#ises considered, the petition is PARTIA++; ARANTED. The CA Decision Septe#$er %&, '&&( and Resolution dated Dece#$er ), '&&( are ACCIR.ED with .ODICICATION that the order for petitioner to continue i#ple#entin* ?a*e Order No. R,III1"& and "" across the $oard is SET ASIDE. Accordin*l2, ite# "& of the N+RC Decision dated .arch %&, '&&6 is #odified to read Idis#iss the clai# for i#ple#entation of ?a*e Order Nos. R,III1"& and "" to the e#plo2ees who are not #ini#u# wa*e earners.I
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G.R. No. 1$005% &a'(ar) 21, 201* GO+A, INC., Petitioner, vs. GO+A, INC. EMPLO+EES UNION!,,W, Respondent. DECISION PERALTA, J.: This petition for review on certiorari under Rule )7 of the Rules of Civil Procedure see-s to reverse and set aside the 5une "8, '&&7 Decision " and Octo$er "', '&&7 Resolution' of the Court of Appeals in CA1A.R. SP No. (6%%7, which sustained the Octo$er '8, '&&) Decision % of Doluntar2 Ar$itrator ,ienvenido E. +a*ues#a, the dispositive portion of which reads9 ?EERECORE, >ud*#ent is here$2 rendered declarin* that the Co#pan2 is NOT *uilt2 of unfair la$or practice in en*a*in* the services of PESO. The co#pan2 is, however, directed to o$serve and co#pl2 with its co##it#ent as it pertains to the hirin* of casual e#plo2ees when necessitated $2 $usiness circu#stances. ) The facts are si#ple and appear to $e undisputed. So#eti#e in 5anuar2 '&&), petitioner Ao2a, Inc. Co#pan2!, a do#estic corporation en*a*ed in the #anufacture, i#portation, and wholesale of top 3ualit2 food products, hired contractual e#plo2ees fro# PESO Resources Develop#ent Corporation PESO! to perfor# te#porar2 and occasional services in its factor2 in Paran*, .ari-ina Cit2. This pro#pted respondent Ao2a, Inc. E#plo2ees /nionKCC? /nion! to re3uest for a *rievance conference on the *round that the contractual wor-ers do not $elon* to the cate*ories of e#plo2ees stipulated in the e4istin* Collective ,ar*ainin* A*ree#ent C,A!. 7 ?hen the #atter re#ained unresolved, the *rievance was referred to the National Conciliation and .ediation ,oard NC.,! for voluntar2 ar$itration. Durin* the hearin* on 5ul2 ", '&&), the Co#pan2 and the /nion #anifested $efore Doluntar2 Ar$itrator DA! ,ienvenido E. +a*ues#a that a#ica$le settle#ent was no lon*er possi$le< hence, the2 a*reed to su$#it for resolution the solitar2 issue of IGwHhether or not the Co#pan2 is *uilt2 of unfair la$or acts in en*a*in* the services of PESO, a third part2 service provider, under the e4istin* C,A, laws, and >urisprudence.I8 ,oth parties thereafter filed their respective pleadin*s. The /nion asserted that the hirin* of contractual e#plo2ees fro# PESO is not a #ana*e#ent prero*ative and in *ross violation of the C,A tanta#ount to unfair la$or practice /+P!. It noted that the contractual wor-ers en*a*ed have $een assi*ned to wor- in positions previousl2 handled $2 re*ular wor-ers and /nion #e#$ers, in effect violatin* Section ), Article I of the C,A, which provides for three cate*ories of e#plo2ees in the Co#pan2, to wit9 Section ). Cate*ories of E#plo2ees.K The parties a*ree on the followin* cate*ories of e#plo2ees9 a! Pro$ationar2 E#plo2ee. K One hired to occup2 a re*ular ran-1and1file position in the Co#pan2 and is servin* a pro$ationar2 period. If the pro$ationar2 e#plo2ee is hired or co#es fro# outside the Co#pan2 non1Ao2a, Inc. e#plo2ee!, he shall $e re3uired to under*o a pro$ationar2 period of si4 8! #onths, which period, in the sole >ud*#ent of #ana*e#ent, #a2 $e shortened if the e#plo2ee has alread2 ac3uired the -nowled*e or s-ills re3uired of the >o$. If the e#plo2ee is hired fro# the casual pool and has wor-ed in the sa#e position at an2 ti#e durin* the past two '! 2ears, the pro$ationar2 period shall $e three %! #onths. $! Re*ular E#plo2ee. K An e#plo2ee who has satisfactoril2 co#pleted his pro$ationar2 period and auto#aticall2 *ranted re*ular e#plo2#ent status in the Co#pan2. c! Casual E#plo2ee, K One hired $2 the Co#pan2 to perfor# occasional or seasonal wordirectl2 connected with the re*ular operations of the Co#pan2, or one hired for specific pro>ects of li#ited duration not connected directl2 with the re*ular operations of the Co#pan2. It was averred that the cate*ories of e#plo2ees had $een a part of the C,A since the "B6&s and that due to this provision, a pool of casual e#plo2ees had $een #aintained $2 the Co#pan2 fro# which it hired wor-ers who then $eca#e re*ular wor-ers when ur*entl2 necessar2 to e#plo2 the# for #ore than a 2ear. +i-ewise, the Co#pan2 so#eti#es hired pro$ationar2 e#plo2ees who also later $eca#e re*ular wor-ers after passin* the pro$ationar2 period. ?ith the hirin* of contractual e#plo2ees, the /nion contended that it would no lon*er have pro$ationar2 and

casual e#plo2ees fro# which it could o$tain additional /nion #e#$ers< thus, renderin* inutile Section ", Article III /nion Securit2! of the C,A, which states9 Section ". Condition of E#plo2#ent. K As a condition of continued e#plo2#ent in the Co#pan2, all re*ular ran-1and1file e#plo2ees shall re#ain #e#$ers of the /nion in *ood standin* and that new e#plo2ees covered $2 the appropriate $ar*ainin* unit shall auto#aticall2 $eco#e re*ular e#plo2ees of the Co#pan2 and shall re#ain #e#$ers of the /nion in *ood standin* as a condition of continued e#plo2#ent. The /nion #oreover advanced that sustainin* the Co#pan20s position would easil2 wea-en and ulti#atel2 destro2 the for#er with the latter0s resort to retrench#ent andFor retire#ent of e#plo2ees and not fillin* up the vacant re*ular positions throu*h the hirin* of contractual wor-ers fro# PESO, and that a possi$le scenario could also $e created $2 the Co#pan2 wherein it could Ii#portI wor-ers fro# PESO durin* an actual stri-e. In counterin* the /nion0s alle*ations, the Co#pan2 ar*ued that9 a! the law e4pressl2 allows contractin* and su$contractin* arran*e#ents throu*h Depart#ent of +a$or and E#plo2#ent DO+E! Order No. "(1&'< $! the en*a*e#ent of contractual e#plo2ees did not, in an2 wa2, pre>udice the /nion, since not a sin*le e#plo2ee was ter#inated and neither did it result in a reduction of wor-in* hours nor a reduction or splittin* of the $ar*ainin* unit< and c! Section ), Article I of the C,A #erel2 provides for the definition of the cate*ories of e#plo2ees and does not put a li#itation on the Co#pan20s ri*ht to en*a*e the services of >o$ contractors or its #ana*e#ent prero*ative to address te#porar2Foccasional needs in its operation. On Octo$er '8, '&&), DA +a*ues#a dis#issed the /nion0s char*e of /+P for $ein* purel2 speculative and for lac-in* in factual $asis, $ut the Co#pan2 was directed to o$serve and co#pl2 with its co##it#ent under the C,A. The DA opined9 ?e e4a#ined the C,A provision Section ), Article I of the C,Aalle*edl2 violated $2 the Co#pan2 and indeed the a*ree#ent prescri$es three %! cate*ories of e#plo2ees in the Co#pan2 and provides for the definition, functions and duties of each. .aterial to the case at hand is the definition as re*ards the functions of a casual e#plo2ee descri$ed as follows9 Casual E#plo2ee K One hired $2 the CO.PAN; to perfor# occasional or seasonal wor- directl2 connected with the re*ular operations of the CO.PAN;, or one hired for specific pro>ects of li#ited duration not connected directl2 with the re*ular operations of the CO.PAN;. ?hile the fore*oin* a*ree#ent $etween the parties did eli#inate #ana*e#ent0s prero*ative of outsourcin* parts of its operations, it serves as a li#itation on such prero*ative particularl2 if it involves functions or duties specified under the afore3uoted a*ree#ent. It is clear that the parties a*reed that in the event that the Co#pan2 needs to en*a*e the services of additional wor-ers who will perfor# Ioccasional or seasonal wor- directl2 connected with the re*ular operations of the CO.PAN;,I or Ispecific pro>ects of li#ited duration not connected directl2 with the re*ular operations of the CO.PAN;I, the Co#pan2 can hire casual e#plo2ees which is a-in to contractual e#plo2ees. If we note the Co#pan20s own declaration that PESO was en*a*ed to perfor# Ite#porar2 or occasional servicesI See the Co#pan20s Position Paper, at p. "!, then it should have directl2 hired the services of casual e#plo2ees rather than do it throu*h PESO. It is evident, therefore, that the en*a*e#ent of PESO is not in -eepin* with the intent and spirit of the C,A provision in 3uestion. It #ust, however, $e stressed that the ri*ht of #ana*e#ent to outsource parts of its operations is not totall2 eli#inated $ut is #erel2 li#ited $2 the C,A. Aiven the fore*oin*, the Co#pan20s en*a*e#ent of PESO for the *iven purpose is indu$ita$l2 a violation of the C,A.6 ?hile the /nion #oved for partial reconsideration of the DA Decision, ( the Co#pan2 i##ediatel2 filed a petition for reviewB $efore the Court of Appeals CA! under Rule )% of the Revised Rules of Civil Procedure to set aside the directive to o$serve and co#pl2 with the C,A co##it#ent pertainin* to the hirin* of casual e#plo2ees when necessitated $2 $usiness circu#stances. Professin* that such order was not covered $2 the sole issue su$#itted for voluntar2 ar$itration, the Co#pan2 assi*ned the followin* errors9 TEE EONORA,+E DO+/NTAR; AR,ITRATOR E:CEEDED EIS PO?ER ?EICE ?AS E:PRESS+; ARANTED AND +I.ITED ,; ,OTE PARTIES IN R/+INA TEAT TEE
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ENAAAE.ENT OC PESO IS NOT IN LEEPINA ?ITE TEE INTENT AND SPIRIT OC TEE C,A."& TEE EONORA,+E DO+/NTAR; AR,ITRATOR CO..ITTED A PATENT AND PA+PA,+E ERROR IN DEC+ARINA TEAT TEE ENAAAE.ENT OC PESO IS NOT IN LEEPINA ?ITE TEE INTENT AND SPIRIT OC TEE C,A."" On 5une "8, '&&7, the CA dis#issed the petition. In dispensin* with the #erits of the controvers2, it held9 This Court does not find it ar$itrar2 on the part of the Eon. Doluntar2 Ar$itrator in rulin* that Ithe en*a*e#ent of PESO is not in -eepin* with the intent and spirit of the C,A.I The said rulin* is interrelated and intertwined with the sole issue to $e resolved that is, I?hether or not the Co#pan2 is *uilt2 of unfair la$or practice in en*a*in* the services of PESO, a third part2 service provider, under e4istin* C,A, laws, and >urisprudence.I ,oth issues concern the en*a*e#ent of PESO $2 the Co#pan2 which is perceived as a violation of the C,A and which constitutes as unfair la$or practice on the part of the Co#pan2. This is easil2 discerni$le in the decision of the Eon. Doluntar2 Ar$itrator when it held9 4 4 4 4 ?hile the en*a*e#ent of PESO is in violation of Section ), Article I of the C,A, it does not constitute unfair la$or practice as it sic! not characteri@ed under the law as a *ross violation of the C,A. Diolations of a C,A, e4cept those which are *ross in character, shall no lon*er $e treated as unfair la$or practice. Aross violations of a C,A #eans fla*rant andFor #alicious refusal to co#pl2 with the econo#ic provisions of such a*ree#ent. 4 4 4 Anent the second assi*ned error, the Co#pan2 contends that the Eon. Doluntar2 Ar$itrator erred in declarin* that the en*a*e#ent of PESO is not in -eepin* with the intent and spirit of the C,A. The Co#pan2 >ustified its en*a*e#ent of contractual e#plo2ees throu*h PESO as a #ana*e#ent prero*ative, which is not prohi$ited $2 law. Also, it further alle*ed that no provision under the C,A li#its or prohi$its its ri*ht to contract out certain services in the e4ercise of #ana*e#ent prero*atives. Aer#ane to the resolution of the a$ove issue is the provision in their C,A with respect to the cate*ories of the e#plo2ees9 4444 A careful readin* of the a$ove1enu#erated cate*ories of e#plo2ees reveals that the PESO contractual e#plo2ees do not fall within the enu#erated cate*ories of e#plo2ees stated in the C,A of the parties. Collowin* the said cate*ories, the Co#pan2 should have o$served and co#plied with the provision of their C,A. Since the Co#pan2 had ad#itted that it en*a*ed the services of PESO to perfor# te#porar2 or occasional services which is a-in to those perfor#ed $2 casual e#plo2ees, the Co#pan2 should have tapped the services of casual e#plo2ees instead of en*a*in* PESO. In >ustif2in* its act, the Co#pan2 posits that its en*a*e#ent of PESO was a #ana*e#ent prero*ative. It $ears stressin* that a #ana*e#ent prero*ative refers to the ri*ht of the e#plo2er to re*ulate all aspects of e#plo2#ent, such as the freedo# to prescri$e wor- assi*n#ents, wor-in* #ethods, processes to $e followed, re*ulation re*ardin* transfer of e#plo2ees, supervision of their wor-, la21off and discipline, and dis#issal and recall of wor-, presupposin* the e4istence of e#plo2er1e#plo2ee relationship. On the $asis of the fore*oin* definition, the Co#pan20s en*a*e#ent of PESO was indeed a #ana*e#ent prero*ative. This is in consonance with the pronounce#ent of the Supre#e Court in the case of .anila Electric Co#pan2 vs. Muisu#$in* where it ruled that contractin* out of services is an e4ercise of $usiness >ud*#ent or #ana*e#ent prero*ative. This #ana*e#ent prero*ative of contractin* out services, however, is not without li#itation. In contractin* out services, the #ana*e#ent #ust $e #otivated $2 *ood faith and the contractin* out should not $e resorted to circu#vent the law or #ust not have $een the result of #alicious ar$itrar2 actions. In the case at $ench, the C,A of the parties has alread2 provided for the cate*ories of the e#plo2ees in the Co#pan20sesta$lish#ent. These cate*ories of e#plo2ees particularl2 with respect to casual e#plo2ees serve as li#itation to the Co#pan20s prero*ative to outsource parts of its operations especiall2 when hirin* contractual e#plo2ees. As stated earlier,

the wor- to $e perfor#ed $2 PESO was si#ilar to that of the casual e#plo2ees. ?ith the provision on casual e#plo2ees, the hirin* of PESO contractual e#plo2ees, therefore, is not in -eepin* with the spirit and intent of their C,A. Citations o#itted! "' The Co#pan2 #oved to reconsider the CA Decision,"% $ut it was denied<") hence, this petition. Incidentall2, on 5ul2 "8, '&&B, the Co#pan2 filed a .anifestation "7 infor#in* this Court that its stoc-holders and directors unani#ousl2 voted to shorten the Co#pan20s corporate e4istence onl2 until 5une %&, '&&8, and that the three12ear period allowed $2 law for li3uidation of the Co#pan20s affairs alread2 e4pired on 5une %&, '&&B. Referrin* to Aelano v. Court of Appeals, "8 Pu$lic Interest Center, Inc. v. El#a,"6 and Atien@a v. Dillarosa,"( it ur*ed /s, however, to still resolve the case for future *uidance of the $ench and the $ar as the issue raised herein alle*edl2 calls for a clarification of a le*al principle, specificall2, whether the DA is e#powered to rule on a #atter not covered $2 the issue su$#itted for ar$itration. Even if this Court would $rush aside technicalit2 $2 i*norin* the supervenin* event that renders this case #oot and acade#ic "B due to the per#anent cessation of the Co#pan20s $usiness operation on 5une %&, '&&B, the ar*u#ents raised in this petition still fail to convince /s. ?e confir# that the DA ruled on a #atter that is covered $2 the sole issue su$#itted for voluntar2 ar$itration. Resultantl2, the CA did not co##it serious error when it sustained the rulin* that the hirin* of contractual e#plo2ees fro# PESO was not in -eepin* with the intent and spirit of the C,A. Indeed, the opinion of the DA is *er#ane to, or, in the words of the CA, Iinterrelated and intertwined with,I the sole issue su$#itted for resolution $2 the parties. This $ein* said, the Co#pan20s invocation of Sections ) and 7, Rule ID'& and Section 7, Rule DI'" of the Revised Procedural Auidelines in the Conduct of Doluntar2 Ar$itration Proceedin*s dated Octo$er "7, '&&) issued $2 the NC., is plainl2 out of order. +i-ewise, the Co#pan2 cannot find solace in its cited case of +udo N +u2# Corporation v. Saornido.'' In +udo, the co#pan2 was en*a*ed in the #anufacture of coconut oil, corn starch, *lucose and related products. In the course of its $usiness operations, it en*a*ed the arrastre services of C+AS for the loadin* and unloadin* of its finished products at the wharf. The arrastre wor-ers deplo2ed $2 C+AS to perfor# the services needed were su$se3uentl2 hired, on different dates, as +udo0s re*ular ran-1and1file e#plo2ees. Thereafter, said e#plo2ees >oined +E/, which acted as the e4clusive $ar*ainin* a*ent of the ran-1and1file e#plo2ees. ?hen +E/ entered into a C,A with +udo, providin* for certain $enefits to the e#plo2ees the a#ount of which var2 accordin* to the len*th of service rendered!, it re3uested to include in its #e#$ers0 period of service the ti#e durin* which the2 rendered arrastre services so that the2 could *et hi*her $enefits. The #atter was su$#itted for voluntar2 ar$itration when +udo failed to act. Per su$#ission a*ree#ent e4ecuted $2 $oth parties, the sole issue for resolution was the date of re*ulari@ation of the wor-ers. The DA Decision ruled that9 "! the su$>ect e#plo2ees were en*a*ed in activities necessar2 and desira$le to the $usiness of +udo, and '! C+AS is a la$or1 onl2 contractor of +udo. It then disposed as follows9 a! the co#plainants were considered re*ular e#plo2ees si4 #onths fro# the first da2 of service at C+AS< $! the co#plainants, $ein* entitled to the C,A $enefits durin* the re*ular e#plo2#ent, were awarded sic- leave, vacation leave, and annual wa*e and salar2 increases durin* such period< c! respondents shall pa2 attorne20s fees of "&P of the total award< and d! an interest of "'P per annu# or "P per #onth shall $e i#posed on the award fro# the date of pro#ul*ation until full2 paid. The DA added that all separation andFor retire#ent $enefits shall $e construed fro# the date of re*ulari@ation su$>ect onl2 to the appropriate *overn#ent laws and other social le*islation. +udo filed a #otion for reconsideration, $ut the DA denied it. On appeal, the CA affir#ed in toto the assailed decision< hence, a petition was $rou*ht $efore this Court raisin* the issue, a#on* others, of whether a voluntar2 ar$itrator can award $enefits not clai#ed in the su$#ission a*ree#ent. In den2in* the petition, ?e ruled9 Aenerall2, the ar$itrator is e4pected to decide onl2 those 3uestions e4pressl2 delineated $2 the su$#ission a*ree#ent. Nevertheless, the ar$itrator can assu#e that he has the necessar2 power to #a-e a final settle#ent since ar$itration is the final resort for the ad>udication of disputes. The succinct reasonin* enunciated $2 the CA in support of its holdin*, that the Doluntar2 Ar$itrator in
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a la$or controvers2 has >urisdiction to render the 3uestioned ar$itral awards, deserves our concurrence, thus9 In *eneral, the ar$itrator is e4pected to decide those 3uestions e4pressl2 stated and li#ited in the su$#ission a*ree#ent. Eowever, since ar$itration is the final resort for the ad>udication of disputes, the ar$itrator can assu#e that he has the power to #a-e a final settle#ent. Thus, assu#in* that the su$#ission e#powers the ar$itrator to decide whether an e#plo2ee was dischar*ed for >ust cause, the ar$itrator in this instance can reasona$l2 assu#e that his powers e4tended $e2ond *ivin* a 2es1or1no answer and included the power to reinstate hi# with or without $ac- pa2. In one case, the Supre#e Court stressed that I444 the Doluntar2 Ar$itrator had plenar2 >urisdiction and authorit2 to interpret the a*ree#ent to ar$itrate and to deter#ine the scope of his own authorit2 su$>ect onl2, in a proper case, to the certiorari >urisdiction of this Court. The Ar$itrator, as alread2 indicated, viewed his authorit2 as e#$racin* not #erel2 the deter#ination of the a$stract 3uestion of whether or not a perfor#ance $onus was to $e *ranted $ut also, in the affir#ative case, the a#ount thereof. ,2 the sa#e to-en, the issue of re*ulari@ation should $e viewed as two1tiered issue. ?hile the su$#ission a*ree#ent #entioned onl2 the deter#ination of the date or re*ulari@ation, law and >urisprudence *ive the voluntar2 ar$itrator enou*h leewa2 of authorit2 as well as ade3uate prero*ative to acco#plish the reason for which the law on voluntar2 ar$itration was created K speed2 la$or >ustice. It $ears stressin* that the underl2in* reason wh2 this case arose is to settle, once and for all, the ulti#ate 3uestion of whether respondent e#plo2ees are entitled to hi*her $enefits. To re3uire the# to file another action for pa2#ent of such $enefits would certainl2 under#ine la$or proceedin*s and contravene the constitutional #andate providin* full protection to la$or.'% Indu$ita$l2, +udo fortifies, not di#inishes, the soundness of the 3uestioned DA Decision. Said case reaffir#s the plenar2 >urisdiction and authorit2 of the voluntar2 ar$itrator to interpret the C,A and to deter#ine the scope of hisFher own authorit2. Su$>ect to >udicial review, the leewa2 of authorit2 as well as ade3uate prero*ative is ai#ed at acco#plishin* the rationale of the law on voluntar2 ar$itration K speed2 la$or >ustice. In this case, a co#plete and final ad>udication of the dispute $etween the parties necessaril2 called for the resolution of the related and incidental issue of whether the Co#pan2 still violated the C,A $ut without $ein* *uilt2 of /+P as, needless to state, /+P is co##itted onl2 if there is *ross violation of the a*ree#ent. +astl2, the Co#pan2 -ept on harpin* that $oth the DA and the CA conceded that its en*a*e#ent of contractual wor-ers fro# PESO was a valid e4ercise of #ana*e#ent prero*ative. It is confused. To e#phasi@e, declarin* that a particular act falls within the concept of #ana*e#ent prero*ative is si*nificantl2 different fro# ac-nowled*in* that such act is a valid e4ercise thereof. ?hat the DA and the CA correctl2 ruled was that the Co#pan20s act of contractin* outFoutsourcin* is within the purview of #ana*e#ent prero*ative. ,oth did not sa2, however, that such act is a valid e4ercise thereof. O$viousl2, this is due to the reco*nition that the C,A provisions a*reed upon $2 the Co#pan2 and the /nion deli#it the free e4ercise of #ana*e#ent prero*ative pertainin* to the hirin* of contractual e#plo2ees. Indeed, the DA opined that Ithe ri*ht of the #ana*e#ent to outsource parts of its operations is not totall2 eli#inated $ut is #erel2 li#ited $2 the C,A,I while the CA held that Ithis #ana*e#ent prero*ative of contractin* out services, however, is not without li#itation. 4 4 4 These cate*ories of e#plo2ees particularl2 with respect to casual e#plo2ees serve as li#itation to the Co#pan20s prero*ative to outsource parts of its operations especiall2 when hirin* contractual e#plo2ees.I A collective $ar*ainin* a*ree#ent is the law $etween the parties9 It is fa#iliar and funda#ental doctrine in la$or law that the C,A is the law $etween the parties and the2 are o$li*ed to co#pl2 with its provisions. ?e said so in Eonda Phils., Inc. v. Sa#ahan n* .ala2an* .an**a*awa sa Eonda9 A collective $ar*ainin* a*ree#ent or C,A refers to the ne*otiated contract $etween a le*iti#ate la$or or*ani@ation and the e#plo2er concernin* wa*es, hours of wor- and all other ter#s and conditions of e#plo2#ent in a $ar*ainin* unit. 1wphi1 As in all contracts, the parties in a C,A

#a2 esta$lish such stipulations, clauses, ter#s and conditions as the2 #a2 dee# convenient provided these are not contrar2 to law, #orals, *ood custo#s, pu$lic order or pu$lic polic2. Thus, where the C,A is clear and una#$i*uous, it $eco#es the law $etween the parties and co#pliance therewith is #andated $2 the e4press polic2 of the law. .oreover, if the ter#s of a contract, as in a C,A, are clear and leave no dou$t upon the intention of the contractin* parties, the literal #eanin* of their stipulations shall control. 4 4 4. ') In this case, Section ), Article I on cate*ories of e#plo2ees! of the C,A $etween the Co#pan2 and the /nion #ust $e read in con>unction with its Section ", Article III on union securit2!. ,oth are interconnected and #ust $e *iven full force and effect. Also, these provisions are clear and una#$i*uous. The ter#s are e4plicit and the lan*ua*e of the C,A is not suscepti$le to an2 other interpretation. Eence, the literal #eanin* should prevail. As repeatedl2 held, the e4ercise of #ana*e#ent prero*ative is not unli#ited< it is su$>ect to the li#itations found in law, collective $ar*ainin* a*ree#ent or the *eneral principles of fair pla2 and >ustice '7 Evidentl2, this case has one of the restrictions1 the presence of specific C,A provisions1unli-e in San .i*uel Corporation E#plo2ees /nion1PTA?O v. ,ersa#ira, '8 De Oca#po v. N+RC, '6 Asian Alcohol Corporation v. N+RC,'( and Serrano v. N+RC'Bcited $2 the Co#pan2. To reiterate, the C,A is the nor# of conduct $etween the parties and co#pliance therewith is #andated $2 the e4press polic2 of the law.%& ?EERECORE, the petition is DENIED. The assailed 5une "8, '&&7 Decision, as well as the Octo$er "', '&&7 Resolution of the Court of Appeals, which sustained the Octo$er '8, '&&) Decision of the Doluntar2 Ar$itrator, are here$2 ACCIR.ED.

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G.R. No. 18*122 &('- 15, 2011 GENERAL MILLING CORPORATION!INDEPENDENT LA.OR UNION GMC!ILU", Petitioner, vs. GENERAL MILLING CORPORATION, Respondent. 4 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 14 G.R. No. 18*88/ GENERAL MILLING CORPORATION, Petitioner, vs. GENERAL MILLING CORPORATION!INDEPENDENT LA.OR UNION GMC!ILU", ET. AL, Respondents. DECISION PERE0, J.: Assailed in these petitions for review on certiorari filed pursuant to Rule )7 of the "BB6 Rules of Civil Procedure are the Court of Appeals0 CA! resolution of the separate petitions for certiorari 3uestionin* the '& 5ul2 '&&8 Decision" rendered and the '% Au*ust '&&8 Resolution' issued $2 the Courth Division of the National +a$or Relations Co##ission N+RC!, Ce$u Cit2, in N+RC Case No. D1&&&8%'1'&&7. In A.R. No. "(%"'', petitioner Aeneral .illin* Corporation1 Independent +a$or /nion the /nion! see-s the reversal of the "& Octo$er '&&6 Decision rendered $2 the Special Twentieth Division of the CA in CA1A.R. CE,1SP No. &'''8, % the dispositive portion of which states9 ?EERECORE, all the fore*oin* pre#ises considered, the instant Petition is here$2 PARTIA++; ARANTED. The 5ul2 '&, '&&8 Decision of respondent N+RC in N+RC Case No. D1&&&8%'1'&&7 is here$2 ACCIR.ED insofar as it affir#ed the Octo$er '6, '&&7 Order of E4ecutive +a$or Ar$iter Orti@ in RA, Case No. DII1&81&)671"BB' with the #odification of9 a! e4cludin* the vacation leave salar2 rate differentials, sic- leave salar2 rate differentials, $! e4cludin* e#plo2ees who have e4ecuted 3uitclai#s which are here$2 declared valid, and c! deductin* salar2 increases and other e#plo2#ent $enefits voluntaril2 *iven $2 respondent A.C in the co#putation of $enefits. Accordin*l2, the instant case is here$2 RECERRED to the ARIEDANCE .ACEINER; under the i#posed C,A for the reco#putation of $enefits clai#ed $2 petitioner A.C1I+/ under the said i#posed C,A ta-in* into consideration the *uidelines laid down $2 the Court in this Decision as well as the validit2 of the su$>ect 3uitclai#s herein$efore discussed. SO ORDERED.) In A.R. No. "(%((B, petitioner Aeneral .illin* Corporation A.C! pra2s for the settin* aside of the "8 Nove#$er '&&6 Decision rendered $2 the Ei*hteenth Division of the CA in CA1A.R. CE,1 SP No. &''%',7 the decretal portion of which states9 ?EERECORE, the Decision dated 5ul2 '&, '&&8 and the Resolution dated Au*ust '%, '&&8 of pu$lic respondent N+RC are here$2 ACCIR.ED IN TOTO and the instant petition is DIS.ISSED. SO ORDERED.8 The Cacts On '( April "B(B, A.C and the /nion entered into a collective $ar*ainin* a*ree#ent C,A! which provided, a#on* other ter#s, the latter0s representation of the collective $ar*ainin* unit for a three12ear ter# #ade to retroact to " Dece#$er "B((. On 'B Nove#$er "BB" or one da2 $efore the e4piration of the su$>ect C,A, the /nion sent a draft C,A proposal to A.C, with a re3uest for counter1proposals fro# the latter, for the purpose of rene*otiatin* the e4istin* C,A $etween the parties. In view of A.C0s failure to co#pl2 with said re3uest, the /nion co##enced the co#plaint for unfair la$or practice which, under doc-et of RA, Case No. DII1&81&)671B', was dis#issed for lac- of #erit in a decision dated '" Dece#$er "BB% issued $2 the Re*ional Ar$itration ,ranch1DII RA,1DII! of the National +a$or Relations Co##ission N+RC!. 6 On appeal, however, said dis#issal was reversed and set aside in the %& 5anuar2 "BB( decision rendered $2 the Courth Division of the N+RC in N+RC Case No. D1&""'1B), ( the dispositive portion of which states9

?EERECORE, pre#ises considered, the instant appeal is here$2 ARANTED. The Decision dated Dece#$er '", "BB% is here$2 DACATED and SET ASIDE and a new one issued orderin* the i#position upon the respondent co#pan2 of the co#plainant unionGJsH draft C,A proposal for the re#ainin* two 2ears duration of the ori*inal C,A which is fro# Dece#$er ", "BB" to Nove#$er %&, "BB%< and for the respondent to pa2 attorne20s fees. SO ORDERED.B ?ith the reconsideration and settin* aside of the fore*oin* decision in the N+RC0s resolution dated 8 Octo$er "BB(,"& the /nion filed the petitions for certiorari doc-eted $efore the CA as CA1 A.R. SP Nos. 7&%(% and 7"68%. In a decision dated "B 5ul2 '&&&, the then Courteenth Division of the CA reversed and set aside the N+RC0s 8 Octo$er "BB( resolution and reinstated the aforesaid %& 5anuar2 "BB( decision, e4cept with respect to the undeter#ined award of attorne20s fees which was deleted for lac- of state#ent of the $asis therefor in the assailed decision. "" A**rieved $2 the CA0s '8 Octo$er '&&& resolution den2in* its #otion for reconsideration, A.C elevated the case to this Court via the petition for review on certiorari doc-eted $efore this Court as A.R. No. ")86'(. In a decision dated "" Ce$ruar2 '&&) rendered $2 the Court0s then Second Division, the CA0s %& 5anuar2 "BB( decision and '8 Octo$er '&&& resolution were affir#ed, "' upon the followin* findin*s and conclusions, to wit9 A.C0s failure to #a-e a ti#el2 repl2 to the proposals presented $2 the union is indicative of its utter lac- of interest in $ar*ainin* with the union. Its e4cuse that it felt the union no lon*er represented the wor-er, was #ainl2 dilator2 as it turned out to $e utterl2 $aseless. ?e hold that A.C0s refusal to #a-e a counter proposal to the union0s proposal for C,A ne*otiation is an indication of its $ad faith. ?here the e#plo2er did not even $other to su$#it an answer to the $ar*ainin* proposals of the union, there is a clear evasion of the dut2 to $ar*ain collectivel2. Cailin* to co#pl2 with the #andator2 o$li*ation to su$#it a repl2 to the union0s proposals, A.C violated its dut2 to $ar*ain collectivel2, #a-in* it lia$le for unfair la$or practice. Perforce, the Court of Appeals did not co##it *rave a$use of discretion a#ountin* to lac- or e4cess of >urisdiction in findin* that A.C is, under the circu#stances, *uilt2 of unfair la$or practice. 4444 4 4 4 I!t would $e unfair to the union and its #e#$ers if the ter#s and conditions contained in the old C,A would continue to $e i#posed on A.C0s e#plo2ees for the re#ainin* two '! 2ears of the C,A0s duration. ?e are not inclined to *ratif2 A.C with an e4tended ter# of the old C,A after it resorted to dela2in* tactics to prevent ne*otiations. Since it was A.C which violated the dut2 to $ar*ain collectivel2, $ased on Lio- +o2 and Divine ?orld /niversit2 of Taclo$an, it had lost its statutor2 ri*ht to ne*otiate or rene*otiate the ter#s and conditions of the draft C,A proposed $2 the union. 4444 /nder ordinar2 circu#stances, it is not o$li*ator2 upon either side of a la$or controvers2 to precipitatel2 accept or a*ree to the proposals of the other. ,ut an errin* part2 should not $e allowed with i#punit2 to sche#es fei*nin* ne*otiations $2 *oin* throu*h e#pt2 *estures. Thus, $2 i#posin* on A.C the provisions of the draft C,A proposed $2 the union, in our view, the interests of e3uit2 and fair pla2 were properl2 served and $oth the parties re*ained e3ual footin*, which was lost when A.C thwarted the ne*otiations for new econo#ic ter#s of the C,A. "% ?ith the ensuin* finalit2 of the fore*oin* decision, the /nion filed a #otion for issuance of a writ of e4ecution dated '" .arch '&&7, to enforce the clai#s of the covered e#plo2ees which it co#puted in the su# of P)%%,6(8,6(8.%8 and to re3uire A.C to produce said e#plo2ee0s ti#e cards for the purpose of co#putin* their overti#e pa2, ni*ht shift differentials and la$or standard $enefits for wor- rendered on rest da2s, le*al holida2s and special holida2s. ") On "( April '&&7, however, A.C opposed said #otion on the *round, a#on* other #atters, that the $ar*ainin* unit no lon*er e4ist in view of the resi*nation, retrench#ent, retire#ent and separation fro# service of wor-ers who have additionall2 e4ecuted waivers and 3uitclai#s ac-nowled*in* full settle#ent of their clai#s< that the covered e#plo2ees have alread2 received salar2 increases and $enefits for the period "BB" to "BB%< and, that aside fro# the aforesaid supervenin* events which precluded
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the enforce#ent thereof, the decision rendered in the case si#pl2 called for the e4ecution of a C,A incorporatin* the /nion0s proposal, not the outri*ht co#putation of $enefits thereunder. "7 In a ISu$#issionI dated '6 .a2 '&&7, A.C further #anifested that the /nion #e#$ership in the $ar*ainin* unit did not e4ceed '(8 and that followin* e#plo2ees should $e e4cluded fro# the covera*e of the decision sou*ht to $e enforced9 a! )6 e#plo2ees who were hired after "BB'< $! '%) e#plo2ees who had $een separated fro# the service< c! %6 e#plo2ees who, as dail2 paid ran- and file e#plo2ees, were represented $2 another union and covered $2 a different C,A< and, d! )" wor-ers holdin* #ana*erialFsupervisor2Fconfidential positions. "8 In its co##ent to the fore*oin* ISu$#issionI, however, the /nion ar*ued that the $enefits derived fro# its proposed C,A e4tended to $oth union #e#$ers and non1#e#$ers< that the newl2 hired e#plo2ees were entitled to the $enefits accruin* after their e#plo2#ent $2 A.C< that the e#plo2ees who had, in the #eanti#e, $een separated fro# service could not have validl2 waived the $enefits which were onl2 deter#ined with finalit2 in the "" Ce$ruar2 '&&) decision rendered in A.R. No. ")86'(< that the C,A $enefits can $e e4tended the dail2 paid e#plo2ees upon their re1classification as #onthl2 paid e#plo2ees as well as to A.C0s #ana*erial and supervisor2 e#plo2ees, prior to their pro#otion< and, that the i#position of its C,A proposals necessaril2 calls for the co#putation of the $enefits therein provided."6 Actin* on the #e#oranda the parties filed in support of their respective positions, "( E4ecutive +a$or Ar$iter Dioleta Orti@1,antu* issued the '6 Octo$er '&&7 order, li#itin* the co#putation of the $enefits of the /nion0s C,A proposal to the re#ainin* two 2ears of the duration of the ori*inal C,A or fro# " Dece#$er "BB" up to %& Nove#$er "BB%. The co#putation covered the )%8 e#plo2ees included in the /nion0s list, less the followin*9 a! 66 e#plo2ees who were hired or re*ulari@ed after %& Nove#$er "BB%< $! %8 dail2 paid ran- and file e#plo2ees who were covered $2 a separate C,A< c! )" #ana*erialFsupervisor2 e#plo2ees< and d! " e#plo2ee for who# no salar21rate infor#ation was su$#itted in the pre#ises. "B As a conse3uence, said E4ecutive +a$or Ar$iter disposed of the aforesaid pendin* #otion and incidents in the followin* wise9 ,ased on all the fore*oin*, co#putations have $een #ade, details of which are prepared and reflected in separate pa*es $ut which still for# part of this Order. ,2 wa2 of su##ar2, the *rand total consists of the followin*9 Salar2 Increase Differentials Rest Da2 Dacation +eave Differentials Sic- +eave Differentials School Openin* ,onus "%th .onth Pa2 Differentials Christ#as ,onus Si*nin* ,onus Total .one2 Clai#s Sac-s of Rice P"6,767,&&&.&& ),%'&,")(.7& B'&,&"%.)' B'&,&"%.)' 7,&B),&)).8B ",)8(,BBB.B( ),78&,("8.6( ",%"&,&&&.&& P%8,"8B,&%8.6B 8,%6'

Issue the appropriate writ of e4ecution $ased on the fore*oin* co#putations. SO ORDERED.'& A**rieved, the /nion filed a partial appeal dated ' Nove#$er '&&7, on the *round that the E4ecutive +a$or Ar$iter a$used her discretion in9 a! confinin* the co#putation of the $enefits fro# " Dece#$er "BB" to %& Nove#$er "BB% in favor of onl2 '(" e#plo2ees out of the )%8 included in its list< $! co#putin* onl2 "& out of the "7 $enefits provided under its C,A proposal<

and c! failin* to direct the A.C to produce the e#plo2ees0 ti#e cards and other pertinent docu#ents essential for the co#putation of the $enefits due in the pre#ises. '" In turn, A.C filed its "6 Nove#$er '&&7 IO$>ectionsI to the aforesaid '' Octo$er '&&7 order, ar*uin* that the E4ecutive +a$or Ar$iter not onl2 varied the dispositive portion of the N+RC decision dated %& 5anuar2 "BB( $ut also i*nored the 3uitclai#s e4ecuted and the $enefits actuall2 paid in the pre#ises.'' Reiteratin* the fore*oin* ar*u#ents in its "8 .a2 '&&8 opposition to the /nion0s partial appeal, A.C further #aintained that its not $ein* dul2 heard on the co#putation of the award in the su$>ect '6 Octo$er '&&7 order rendered the /nion0s partial appeal pre#ature< and, that its C,A with the /nion had e4pired on %& Nove#$er "BB%, with the latter e4ertin* no effort at all for its renewal.'% On '& 5ul2 '&&8, the N+RC rendered a decision in N+RC Case No. D1&&&8%'1'&&7, affir#in* the aforesaid '6 Octo$er '&&7 order of e4ecution. Cindin* that the dut2 to #aintain the status 3uo and to continue in full force and effect the ter#s of the e4istin* a*ree#ent under Article '7% of the +a$or Code of the Philippines applies onl2 when the parties a*reed to the ter#s and conditions of the C,A, the N+RC upheld the E4ecutive +a$or Ar$iter0s co#putation on the *round, a#on* others, that the decision sou*ht to $e enforced covered onl2 the re#ainin* two 2ears of the duration of the ori*inal C,A, i.e., fro# " Dece#$er "BB" to %& Nove#$er "BB%< that li-e A.C0s supposed *rant of additional $enefits durin* the re#ainin* ter# of the ori*inal C,A, the /nion0s clai#s for pa2#ent of vacation leave salar2 differentials, sic- leave salar2 rate differentials, dislocation allowance, separation pa2 for voluntar2 resi*nation and separation pa2 salar2 rate differentials were not sufficientl2 esta$lished< that re3uired $2 law to preserve its records for a period of five 2ears, A.C cannot possi$l2 $e e4pected to preserve e#plo2ees0 records for the period " Dece#$er "BB" to %& Nove#$er "BB%< and, that the clai#ant has the $urden of provin* entitle#ent to holida2 pa2, pre#iu# for holida2 and rest da2 as well ni*ht shift differentials. Aivin* short shrift to A.C0s o$>ections as aforesaid, the N+RC li-ewise ruled that co#putation of the #onetar2 award was necessar2 for the enforce#ent of this Court0s "" Ce$ruar2 '&&) decision and avoidance of #ultiplicit2 of suits.') Dissatisfied with the N+RC0s '% Au*ust '&&8 denial of their #otions for reconsideration of the fore*oin* decision,'7 A.C and the /nion filed separate Rule 87 petitions for certiorari $efore the CA. Doc-eted as CA1A.R. CE,1SP No. &'''8 $efore the CA0s Special Twentieth Division, the /nion0s petition was partiall2 *ranted in the "& Octo$er '&&6 decision rendered in the case, '8 upon the findin* that the parties0 old C,A was superseded $2 the i#posed C,A which provided a ter# of five 2ears fro# " Dece#$er "BB" and re#ained in force until a new C,A is concluded $etween the parties. ,rushin* aside the E4ecutive +a$or Ar$iter0s co#putation of the $enefits as Itoo sweepin*I and IinaccurateI, the CA ruled that9 a! e#plo2ees hired after the effectivit2 of the i#posed C,A are entitled to its $enefits on their first da2 of wor-< $! dail2 paid e#plo2ees are entitled to said $enefits fro# the first da2 the2 $eca#e re*ular #onthl2 paid e#plo2ees< c! #ana*erial and supervisor2 e#plo2ees are entitled to the sa#e $enefits until their pro#otion as such< d! e#plo2ees for who# no infor#ation as to salar2 rate were su$#itted are entitled to the C,A $enefits upon su$#ission of proof in respect thereto< and, e! e#plo2ees who si*ned Deeds of waiver, release and 3uitclai# are no lon*er entitled to said $enefits. '6 Re>ectin* the ar*u#ent that the N+RC erred in upholdin* the E4ecutive +a$or Ar$iter0s co#putation of onl2 "& out of the "7 $enefits provided under the i#posed C,A, the CA went on to ta-e appropriate note of the fact that no proof was su$#itted $2 the /nion to >ustif2 the *rant of said $enefits. ?hile rulin* that the i#posed C,A had the sa#e force and effect as a ne*otiated C,A, the CA, however, faulted the /nion for its Ihast2I and Ipre#atureI filin* of its #otion for issuance of a writ of e4ecution, instead of first de#andin* the enforce#ent of the i#posed C,A fro# A.C and, failin* the sa#e, referrin* the #atter to the *rievance #achiner2 or voluntar2 ar$itration provided under the i#posed C,A, in accordance with Articles '8& and '8" of the +a$or Code. Ac-nowled*in* the difficult2 of co#putin* the $enefits de#anded $2 the /nion in the a$sence of evidence upon which to $ase the sa#e, the CA referred the case to the Arievance .achiner2 under the i#posed C,A and directed the e4clusion of the followin* ite#s fro# said co#putation9 a! the /nion0s clai#s for vacation leave salar2 rate differentials and sic- leave
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salar2 rate differentials< $! the $enefits in favor of the e#plo2ees who have alread2 e4ecuted 3uitclai#s in favor of A.C< and c! the salar2 increases and other e#plo2#ent $enefits A.C had, in the #eanti#e, e4tended its e#plo2ees. '( Discontented with the CA0s ") .a2 '&&( resolution den2in* its #otion for reconsideration of the fore*oin* decision, 'B the /nion filed its Rule )7 petition currentl2 doc-eted $efore this Court as A.R. No. "(%"''. %& On the other hand, A.C0s petition for certiorari assailin* the N+RC0s '& 5ul2 '&&8 decision was doc-eted as CA1A.R. SP No. CE,1SP No. &''%' $efore the CA0s Ei*hteenth Division %" which su$se3uentl2 rendered the decision dated on "8 Nove#$er '&&6, dis#issin* the sa#e for lac- of #erit. Cindin* that $oth parties were *iven an opportunit2 to present their respective positions durin* the pre1e4ecution conference conducted a 3uo, the CA ruled that the E4ecutive +a$or Ar$iter0s '6 Octo$er '&&7 order had attained finalit2 insofar as A.C is concerned, in view of its failure to perfect an appeal therefro# $2 pa2in* the re3uired appeal fee and postin* the cash or suret2 $ond in an a#ount e3uivalent to the $enefits co#puted. In addition to re>ectin* A.C0s ar*u#ent that the 3uitclai#s e4ecuted $2 its e#plo2ees were in the nature of a supervenin* event which rendered e4ecution proceedin*s i#possi$le, the CA held that said 3uitclai#s did not e4tend to the $enefits provided under the i#posed C,A and that the additional $enefits supposedl2 received $2 A.C0s e#plo2ees should not $e deducted therefro#, for lac- of sufficient evidence to prove the sa#e. %' A**rieved $2 the denial of its #otion for reconsideration of the fore*oin* decision in the CA0s resolution dated "& 5ul2, '&&(, %% A.C filed the petition for review on certiorari doc-eted $efore us as A.R. No. "(%((B. %) The Issues In A.R. No. "(%"'', the /nion proffers the followin* *rounds for the *rant of its petition, to wit9 I. TEE CO/RT OC APPEA+S ARADE+; A,/SED ITS DISCRETION AND CO..ITTED REDERSI,+E ERROR IN ACCIR.INA TEE CO.P/TATION OC TEE N+RC IN ITS DECISION DATED 5/+; '&, '&&8 AND DISTORTINA TEE APP+ICATION OC ARTIC+E '7% OC TEE +A,OR CODE IN TEE E:EC/TION OC TEE DECISION OC TEIS EONORA,+E CO/RT IN A.R. NO. ")86'(. II. TEE CO/RT OC APPEA+S ARADE+; A,/SED ITS DISCRETION AND CO..ITTED REDERSI,+E ERROR IN E:C+/DINA CRO. TEE CO.P/TATION TEE E.P+O;EES ?EO EADE E:EC/TED M/ITC+AI.S, IN E:C+/DINA CRO. TEE CO.P/TATION DACATION AND SICL +EADE SA+AR; DICCERENTIA+S, AND IN DED/CTINA A++EAED SA+AR; INCREASES AND OTEER ,ENECITS AIDEN ,; GA.CH. III. TEE CO/RT OC APPEA+S ARADE+; A,/SED ITS DISCRETION AND CO..ITTED REDERSI,+E ERROR IN RECERRINA TEE INSTANT CASE TO TEE ARIEDANCE .ACEINER; COR CO.P/TATION OC TEE ,ENECITS D/E /NDER TEE I.POSED C,A. ID. TEE DECISION IN TEE INSTANT CASE IS IN DIRECT CONC+ICT ?ITE TEE DECISION OC ANOTEER DIDISION OC TEE CO/RT OC APPEA+S INDO+DINA TEE SA.E ISS/ES.%7 In A.R. No. "(%((B, A.C pra2s for the settin* aside of the CA0s "8 Nove#$er '&&6 decision in CA1A.R. CE,1SP No. &''%', on the followin* *rounds, to wit9 A. TEE DECISION OC NODE.,ER "8, '&&6 AND TEE RESO+/TION OC 5/+; "&, '&&( OC TEE CO/RT OC APPEA+S ARE CONTRAR; TO +A?. ,. TEE DECISION OC NODE.,ER "8, '&&6 AND TEE RESO+/TION OC 5/+; "&, '&&( OC TEE CO/RT OC APPEA+S ARE NOT IN ACCORD ?ITE TEE APP+ICA,+E DECISIONS OC TEIS EONORA,+E CO/RT. C. TEE DECISION OC NODE.,ER "8, '&&6 AND TEE RESO+/TION OC 5/+; "&, '&&( OC TEE CO/RT OC APPEA+S ARE CONTRAR; TO TEE ESTA,+ISEED CACTS. D. TEE DECISION OC NODE.,ER "8, '&&6 AND TEE RESO+/TION OC 5/+; "&, '&&( OC TEE CO/RT OC APPEA+S DIO+ATE TEE +A? OC TEE CASE.

E. TEE DECISION OC NODE.,ER "8, '&&6 AND TEE RESO+/TION OC 5/+; "&, '&&( OC TEE CO/RT OC APPEA+S CONTRADENE TEEIR O?N DECISION IN AN E:ACT+; SI.I+AR CASE INDO+DINA TEE SA.E PARTIES.%8 As #a2 $e *leaned fro# the *rounds A.C and the /nion interpose in support of their respective petitions, it is evident that we are called upon to deter#ine the followin* #atters9 a! the period of effectivit2 of the i#posed C,A< $! the e#plo2ees covered $2 the i#posed C,A< and, c! the $enefits to $e included in the e4ecution of the "" Ce$ruar2 '&&) decision rendered in A.R. No. ")86'(. Preli#inar2 to the fore*oin* considerations is the effect of the rendition of dia#etricall2 opposed decisions in CA1A.R. CE,. SP Nos. &'''8 and &''%' $2 the CA0s Special Twentieth and Ei*hteenth Divisions on the parties0 conflictin* clai#s. The Court0s Rulin* ?e find the reversal of the assailed decisions in order. ,oth A.C and the /nion call our attention to the fact that the "& Octo$er '&&6 decision rendered $2 the CA0s Special Twentieth Division in CA1A.R. CE,1SP No. &'''8 is in conflict with the "8 Nove#$er '&&6 decision rendered $2 the sa#e court0s Ei*hteenth Division in CA1A.R. CE,1SP No. &''%'. In A.R. No. "(%"'', the /nion ar*ues that, *iven the identit2 of parties and issues raised in said cases, the "8 Nove#$er '&&6 decision in CA1A.R. CE,1SP No. &''%' should have $een ta-en considered and adopted $2 the CA0s Special Twentieth Division in resolvin* its #otion for reconsideration of the "& Octo$er '&&6 decision in CA1A.R. CE,1SP No. &'''8. %6 In A.R. No. "(%((B, on the other hand, A.C #aintains that, havin* $een rendered ahead of the "8 Nove#$er '&&6 decision in CA1A.R. CE,1SP No. &''%', the CA0s Special Twentieth Division0s "& Octo$er '&&6 in CA1A.R. CE,1SP No. &'''8 is the law of the case which the Ei*hteenth Division erroneousl2 contravened when it dis#issed its petition for certiorari. %( The conflictin* decisions in CA1A.R. CE,1SP Nos. &'''8 and &''%' would have $een, in the first place, avoided had the CA consolidated said cases pursuant to Section %, Rule III of its '&&' Internal Rules IRCA!.%B ,ein* inti#atel2 and su$stantiall2 related cases, their consolidation should have $een ordered to avert the possi$ilit2 of conflictin* decisions in the two cases. )& Althou*h rendered on the #erits $2 a court of co#petent >urisdiction actin* within its authorit2, neither one of said decisions can, however, $e invo-ed as law of the case insofar as the other case is concerned. The doctrine of Ilaw of the caseI #eans that whatever is once irrevoca$l2 esta$lished as the controllin* le*al rule or decision $etween the sa#e parties in the sa#e case continues to $e the law of the case, whether correct on *eneral principles or not, )" so lon* as the facts on which such decision was predicated continue to $e the facts of the case $efore the court.)' Considerin* that a decision $eco#es the law of the case once it attains finalit2, )% it is evident that, without havin* achieved said status, the herein assailed decisions cannot $e invo-ed as the law of the case $2 either A.C or the /nion. Anent its period of effectivit2, Article :ID of the i#posed C,A provides that I t!his A*ree#ent shall $e in full force and effect for a period of five 7! 2ears fro# " Dece#$er "BB", provided that si4t2 8&! da2s prior to the lapse of the third 2ear of effectivit2 hereof, the parties shall open ne*otiations on econo#ic aspect for the fourth and fifth 2ears effectivit2 of this A*ree#ent.I )) Considerin* that no new C,A had $een, in the #eanti#e, a*reed upon $2 A.C and the /nion, we find that the CA0s Special Twentieth Division correctl2 ruled in CA1A.R. CE,1SP No. &'''8 that, pursuant to Article '7% of the +a$or Code, )7 the provisions of the i#posed C,A continues to have full force and effect until a new C,A has $een entered into $2 the parties. Article '7% #andates the parties to -eep the status quo and to continue in full force and effect the ter#s and conditions of the e4istin* a*ree#ent durin* the 8&1da2 period prior to the e4piration of the old C,A andFor until a new a*ree#ent is reached $2 the parties. )8 In the sa#e #anner that it does not provide for an2 e4ception nor 3ualification on which econo#ic provisions of the e4istin* a*ree#ent are to retain its force and effect, )6 the law does not distin*uish $etween a C,A dul2 a*reed upon $2 the parties and an i#posed C,A li-e the one under consideration. The fore*oin* dis3uisition notwithstandin*, it $ears e#phasi@in*, however, that the dispositive portion of the %& 5anuar2 "BB( decision rendered $2 the Courth Division of the N+RC in N+RC Case No. D1&""'1B) specificall2 ordered Ithe i#position upon GA.CH of the G/nion0sH draft C,A
LABOR CASES: SUPREME STEEL- BPI | 12

proposal for the re#ainin* two 2ears duration of the ori*inal C,A which is fro# " Dece#$er "BB" to %& Nove#$er "BB%.I)( Initiall2 set aside in the 8 Octo$er "BB( resolution issued in the sa#e case $2 the N+RC)B and reinstated in the "B 5ul2 '&&& decision rendered $2 the CA0s then Courteenth Division in CA1A.R. SP Nos. 7&%(% and 7"68%, 7& said %& 5anuar2 "BB( decision was upheld in the "" Ce$ruar2 '&&) decision rendered $2 this Court in A.R. No. ")86'( which, in turn, affir#ed the CA0s "B 5ul2 '&&& decision as aforesaid. 7" Considerin* that the %& 5anuar2 "BB( decision sou*ht to $e enforced confined the application of the i#posed C,A to the re#ainin* two12ear duration of the ori*inal C,A, we find that the co#putation of the $enefits due A.C0s covered e#plo2ees was correctl2 li#ited to the period " Dece#$er "BB" to %& Nove#$er "BB% in the '6 Octo$er '&&7 order issued $2 E4ecutive +a$or Ar$iter Dioleta Orti@1,antu* and the '& 5ul2 '&&8 decision rendered $2 the N+RC in N+RC Case No. D1&&&8%'1'&&7. Conse3uentl2, insofar as the e4ecution of the %& 5anuar2 "BB( decision is concerned, the /nion is out on a li#$ in espousin* a co#putation which e4tends the $enefits of the i#posed C,A $e2ond the re#ainin* two12ear duration of the ori*inal C,A. The rule is, after all, settled that an order of e4ecution which varies the tenor of the >ud*#ent or e4ceeds the ter#s thereof is a nullit2.7' Since e4ecution not in har#on2 with the >ud*#ent is $ereft of validit2, 7% it #ust confor#, #ore particularl2, to that ordained or decreed in the dispositive portion of the decision sou*ht to $e enforced. Considerin* that the decision sou*ht to $e enforced pertains to the period " Dece#$er "BB" to %& Nove#$er "BB%, it necessaril2 follows that the co#putation of $enefits under the i#posed C,A should $e li#ited to covered e#plo2ees who were in A.C0s e#plo2 durin* said period of ti#e. ?hile it is true that the provisions of the i#posed C,A e4tend $e2ond said re#ainin* two12ear duration of the ori*inal C,A in view of the parties0 ad#itted failure to conclude a new C,A, the correspondin* co#putation of the $enefits accruin* in favor of A.C0s covered e#plo2ees after the ter# of the ori*inal C,A was correctl2 e4cluded in the aforesaid '6 Octo$er '&&7 order issued in RA, DII1&81&)671"BB'. Rather than the a$$reviated pre1e4ecution proceedin*s $efore E4ecutive +a$or Ar$iter Dioleta Orti@1,antu*, the co#putation of the sa#e $enefits $e2ond %& Nove#$er "BB% should, instead, $e threshed out $2 A.C and the /nion in accordance with the Arievance Procedure outlined as follows under Article :II of the i#posed C,A, to wit9 Article :II ARIEDANCE PROCED/RE Section ". ?henever an e#plo2ee covered $2 the ter#s of this A*ree#ent $elieves that the CO.PAN; has violated the e4press ter#s thereof, or is a**rieved on the enforce#ent or application of the CO.PAN;0s personnel policies, heFshe shall $e re3uired to follow the procedure hereinafter set forth in processin* the *rievance. The CO.PAN; will not $e re3uired to consider a *rievance unless it is presented within 6 da2s fro# the alle*ed $reach of the e4press ter#s of this A*ree#ent or the CO.PAN; personnel policies, STEP I. The e#plo2ee, throu*h the /NION Steward, shall present the alle*ed *rievance in writin* to the i##ediate superior and the2 shall endeavor to settle the *rievance within ten "&! da2s. STEP II. Cailin* the settle#ent in Step I, the /NION President and the Personnel Officer shall #eet and ad>ust the *rievance within fifteen "7! da2s. STEP III. An2 unresolved *rievance shall $e referred to the Ar$itration Co##ittee provided hereunder. Section '. Procedure $efore the Arievance Co##ittee. A. In the event a dispute arises concernin* the application or interpretation of the ter#s of this A*ree#ent or enforce#entFapplication of the CO.PAN; personnel policies which cannot $e settled pursuant to Section I and II, Section " hereof, an Ar$itration Co##ittee shall $e for#ed for the purpose of settlin* that particular dispute onl2. The Arievance Co##ittee shall $e co#posed of three %! #e#$ers, one to $e appointed $2 the CO.PAN; as its representative, another to $e appointed $2 the /NION, and the third to $e appointed $2 co##on a*ree#ent of the two representatives selected fro#

a#on* the list of accredited voluntar2 ar$itrators in the Province of Ce$u, or fro# *overn#ent officials or civic leaders and responsi$le citi@ens in the co##unit2. ,. In all #eetin*s of the Arievance Co##ittee or*ani@ed for the purpose of resolvin* a particular dispute, all #e#$ers #ust $e present and no $usiness shall $e deli$erated upon if an2 #e#$er thereof is a$sent. Eowever, if an2 #e#$er is una$le to attend the #eetin*, heFshe shall i##ediatel2 appoint one to represent hi#Fher, $ut if the one appointed $2 a*ree#ent of $oth representatives of the CO.PAN; and the /NION is the one a$sent, the two representatives present shall a*ree $etween the#selves on an2 person to ta-e the place of the a$sent #e#$er. An2 $usiness or #atter shall $e considered as passed and approved $2 the Co##ittee when there is a vote thereoGnH $2 at least two '! #e#$ers present and the sa#e shall $e final and $indin* on the parties concerned. C. All decisions of the Co##ittee shall $e final9 provided, however, that all decisions of the Co##ittee shall $e li#ited to the ter#s and provisions of this A*ree#ent and in no event #a2 the ter#s and provisions of this A*ree#ent $e altered, a#ended or #odified $2 the Co##ittee.7) Article II of the i#posed C,A, relatedl2, provides that I t!he e#plo2ees covered $2 this A*ree#ent are those e#plo2ed as re*ular #onthl2 paid e#plo2ees at the GA.CH offices in Ce$u Cit2 and +apulapu Cit2, includin* cadet en*ineers, sales#en, veterinarians, field and la$orator2 wor-ers, with the e4ception of #ana*erial e#plo2ees, supervisor2 e#plo2ees, e4ecutive and confidential secretaries, pro$ationar2 e#plo2ees and the e#plo2ees covered $2 a separate Collective ,ar*ainin* A*ree#ent at the Co#pan20s .ill in +apulapu Cit2.I 77 Aau*ed fro# the e4press lan*ua*e of the fore*oin* provision, we find that E4ecutive +a$or Ar$iter Dioleta Orti@1 ,antu* correctl2 e4cluded the followin* e#plo2ees fro# the list of )%8 e#plo2ees su$#itted $2 the /nion78 and the co#putation of the $enefits for the period " Dece#$er "BB" to %& Nove#$er "BB%, to wit9 a! 66 e#plo2ees who were hired or re*ulari@ed after %& Nove#$er "BB%< $! %8 dail2 paid ran- and file e#plo2ees who were covered $2 a separate C,A< c! )" #ana*erialFsupervisor2 e#plo2ees< and, d! " e#plo2ee for who# no salar21rate infor#ation was su$#itted in the pre#ises. 76 Eowever, we find that the '%) e#plo2ees who had alread2 $een separated fro# A.C0s e#plo2 $2 the ti#e of the rendition of the "" Ce$ruar2 '&&) decision in A.R. No. ")86'( should further $e added to these e4cluded e#plo2ees. The record shows that said '%) e#plo2ees were union #e#$ers whose e#plo2#ent with A.C ceased as a conse3uence of death, ter#ination due to redundanc2, ter#ination due to closure of plant, ter#ination for cause, voluntar2 resi*nation, separation or dis#issal fro# service as well as retire#ent.7( /pon co#pliance with A.C0s clearance re3uire#ents7B and in consideration of su#s ran*in* fro# P%(,B(&."' to P8%",(B(.6', due pa2#ent and receipt of which were dul2 ac-nowled*ed, it appears that said e#plo2ees e4ecuted deeds of waiver, release and 3uitclai# 8& which unifor#l2 stated as follows9 TEAT, for and in consideration of the said pa2#ent, I have re#ised, released and do here$2 dischar*e, and $2 these presents do for #2self, #2 heirs, e4ecutors and ad#inistrators, re#ise, release and forever dischar*e said AENERA+ .I++INA CORPORATION, its successors and assi*ns, andFor an2 of its officers or e#plo2ees of and fro# an2 and all #anner of actions, cause or causes of actions, su# or su#s of #one2, account da#a*es, clai#s and de#ands whatsoever $2 wa2 of separation pa2, $enefits, $onuses, and all other ri*hts to co#pensation, salar2, wa*e, e#olu#ent, rei#$urse#ent, or #onetar2 $enefits, which I ever had, now have or which #2 heirs , e4ecutors and ad#inistrators hereafter can, shall or #a2 have, upon or $2 reason of an2 #atter, cause or thin*s whatsoever in connection with #2 for#er e#plo2#ent in and retire#ent fro# the said AENERA+ .I++INA CORPORATION.1avvphi1 TEAT, I have si*ned this Deed of ?aiver, Release and Muitclai# after I have read the contents thereof and understood the sa#e and its le*al effects.
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In its assailed "8 Nove#$er '&&6 decision in CA1A.R. CE,1SP No. &''%', the CA0s then Ei*hteenth Division $rushed aside said deeds of waiver, release and 3uitclai# on the *round, a#on* other #atters, that the sa#e onl2 covered the e#plo2ees0 separation pa2 and retire#ent $enefits $ut did not e4tend to the $enefits which had accrued in their favor under the i#posed C,A< and, that to $e valid, the waiver Ishould $e couched in clear and une3uivocal ter#s leavin* no dou$t as to the intention of those *ivin* up a ri*ht or a $enefit that le*all2 pertains to the#.I 8" In so doin*, however, the CA0s Ei*hteenth Division e*re*iousl2 disre*arded the clear intent on the part of the e#plo2ees who e4ecuted said deeds of waiver, release and 3uitclai# to relin3uish all present and future clai#s arisin* out of their e#plo2#ent with A.C. Althou*h *enerall2 loo-ed upon with disfavor,8' it cannot $e *ainsaid that le*iti#ate waivers that represent a voluntar2 and reasona$le settle#ent of la$orersO clai#s should $e so respected $2 the Court as the law $etween the parties. 8% It is onl2 where there is clear proof that the waiver was wan*led fro# an unsuspectin* or *ulli$le person, or the ter#s of settle#ent are unconsciona$le on its face, that the law will step in to annul the 3uestiona$le transaction. 8) The a$sence of showin* of these factors in the case at $ench i#pels us to uphold the validit2 of said deeds of waiver, release and 3uitclai# and, to e4clude the e#plo2ees who e4ecuted the sa#e fro# those still entitled to the $enefits under the i#posed C,A $oth $efore and after the re#ainin* ter# of the ori*inal C,A. The waiver was all inclusive. There was not even a hint of a li#itation of covera*e. Inas#uch as #ere alle*ation is not evidence, the $asic evidentiar2 rule is to the effect that the $urden of evidence lies with the part2 who asserts the affir#ative of an issue has the $urden of provin* the sa#e87 with such 3uantu# of evidence re3uired $2 law. In ad#inistrative or 3uasi1 >udicial proceedin*s li-e those conducted $efore the N+RC, the standard of proof is su$stantial evidence which is understood to $e #ore than >ust a scintilla or such a#ount of relevant evidence which a reasona$le #ind #i*ht accept as ade3uate to >ustif2 a conclusion. 88 Since it does not #ean >ust an2 evidence in the record of the case for, otherwise, no findin* of fact would $e wantin* in $asis, the test to $e applied is whether a reasona$le #ind, after considerin* all the relevant evidence in the record of a case, would accept the findin*s of fact as ade3uate. 86 Diewed in the li*ht of /nion0s failure to prove the factual $ases for the co#putation of the sa#e, we find that the N+RC correctl2 affir#ed E4ecutive +a$or Ar$iter Dioleta Orti@1,antu*0s e4clusion of the followin* $enefits fro# the order dated '6 Octo$er, '&&7, to wit9 a! vacation leave salar2 rate differentials< $! sic- leave salar2 rate differentials< c! dislocation allowance< d! separation pa2 for voluntar2 resi*nation< and e! separation pa2 salar2 rate differentials. 8( Cor want of su$stantial evidence to prove the sa#e, the CA0s Ei*hteenth Division also correctl2 $rushed aside A.C0s insistence on the deduction of the additional $enefits it purportedl2 e4tended to its e#plo2ees fro# " Dece#$er "BB" to %& Nove#$er "BB%. 8B As for the $enefits after the e4piration of the ter# of the parties0 ori*inal C,A, we find that the e4tent thereof as well as identit2 of the e#plo2ees entitled thereto will $e $etter and #ore thorou*hl2 threshed out $2 the parties the#selves in accordance with the *rievance procedure outlined in Article :II of the i#posed C,A. Aside fro# $ein* alread2 $e2ond the scope of the decision sou*ht to $e enforced, these #atters will not $e accuratel2 ascertained fro# the su##aries of clai#s the parties have $een wont to su$#it at the pre1e4ecution conference conducted a 3uo. Ta-in* into consideration such factors as hirin* of new e#plo2ees, personnel #ove#ent andFor pro#otions as well as separations fro# e#plo2#ent which #a2 have, in the #eanti#e, occurred after the e4piration of the re#ainin* ter# of the ori*inal C,A, the identit2 of the covered e#plo2ees as well as the e4tent of the $enefits due the# should clearl2 $e rec-oned fro# ac3uisition andFor until loss of their status as re*ular #onthl2 paid A.C e#plo2ees. Since the co#putation #ust li-ewise necessaril2 ta-e into consideration the increases in salaries and $enefits that #a2 have $een *iven in the intervenin* period, $oth A.C and the /nion are en>oined to #a-e the pertinent e#plo2#ent and co#pan2 records availa$le to each other, to facilitate the e4peditious and accurate deter#ination of said $enefits. ?EERECORE, pre#ises considered the assailed decisions dated "& Octo$er '&&6 and "8 Nove#$er '&&6 are REDERSED and SET ASIDE. In lieu thereof, the '6 Octo$er '&&7 order issued $2 +a$or Ar$iter Dioleta Orti@1,antu* is ordered REINSTATED and .ODICIED to further

e4clude the '%) e#plo2ees who have e4ecuted deeds of waiver, release and 3uitclai# fro# the co#putation of the $enefits for the re#ainin* ter# of the ori*inal C,A.

LABOR CASES: SUPREME STEEL- BPI

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G.R. No1. 1$15/%!/6 S-23-45-r 18, 201* ASIA .REWER+, INC., Petitioner, vs. TUNA+ NA PAGKAKAISA NG MGA MANGGAGAWA SA ASIA TPMA", Respondent. DECISION DEL CASTILLO, J.: In cases of co#pulsor2 ar$itration $efore the Secretar2 of +a$or pursuant to Article '8% *! of the +a$or Code, the financial state#ents of the e#plo2er #ust $e properl2 audited $2 an e4ternal and independent auditor in order to $e ad#issi$le in evidence for purposes of deter#inin* the proper wa*e award. This Petition for Review on Certiorari assails the Court of Appeal0s CA! Octo$er 8, '&&7 Decision " and the Ce$ruar2 "6, '&&8 A#ended Decision ' in CA1A.R. SP Nos. (&(%B, and (%"8( which #odified the 5anuar2 "B, '&&) Decision% of the Secretar2 of +a$or in OS1A51&&)'1'&&%. Cactual Antecedents The antecedents are aptl2 su##ari@ed $2 the CA9 Respondent union Tuna2 Na Pa*-a-aisa n* #*a .an**a*awa sa Asia TP.A! is a le*iti#ate la$or or*ani@ation, certified as the sole and e4clusive $ar*ainin* a*ent of all re*ular ran- and file e#plo2ees of petitioner corporation Asia ,rewer2, Incorporated A,I!. The petitioner corporation, on the other hand, is a co#pan2 en*a*ed in the #anufacture, sale and distri$ution of $eer, shand2, *lass and $ottled water products. It e#plo2s a$out ",7&& wor-ers and has e4istin* distri$utorship a*ree#ents with at least "% co#panies. Respondent union and petitioner corporation had $een ne*otiatin* for a new collective $ar*ainin* a*ree#ent C,A! for the 2ears '&&%1'&&8 since the old C,A e4pired last 5ul2 '&&%. After a$out "( sessions or ne*otiations, the parties were still una$le to reconcile their differences on their respective positions on #ost ite#s, particularl2 on wa*es and other econo#ic $enefits. On Octo$er '", '&&%, the Respondent union declared a deadloc-. On Octo$er '6, '&&%, Respondent union filed a notice of stri-e with the National Conciliation and .ediation ,oard NC.,!, doc-eted as NC.,1R,1ID1+AA1 NS1"&1&8)1&%. Eowever, the parties did not co#e to ter#s even $efore the NC.,. On Nove#$er "(, '&&%, Respondent union conducted a stri-e vote. Out of the ()& union #e#$ers, 68( voted in favor of holdin* a stri-e. On Nove#$er '&, '&&%, petitioner corporation then petitioned the Secretar2 of the Depart#ent of +a$or and E#plo2#ent DO+E! to assu#e >urisdiction over the parties0 la$or dispute, invo-in* Article '8% *! of the +a$or Code. In answer, Respondent union opposed the assu#ption of >urisdiction, reasonin* therein that the $usiness of petitioner corporation is not in dispensa$le to the national interest. On Dece#$er ', '&&%, Respondent union filed $efore the Court of Appeals a petition for in>unction, doc-eted as CA1A.R. SP No. (&(%B, which sou*ht to en>oin the respondent Secretar2 of +a$or fro# assu#in* >urisdiction over the la$or dispute, or in the alternative, to issue a te#porar2 restrainin* order, li-ewise to en>oin the for#er fro# assu#in* >urisdiction. On Dece#$er "B, '&&%, the pu$lic respondent, throu*h /ndersecretar2FActin* Secretar2 .anuel A. I#son, issued an order assu#in* >urisdiction over the la$or dispute $etween the Respondent union and petitioner corporation. The pertinent portions of the said order read9 4444 I?EERECORE, $ased on our considered deter#ination that the current la$or dispute is li-el2 to adversel2 affect national interest, this Office here$2 ASS/.ES 5/RISDICTION over the la$or dispute $etween the ASIA ,RE?ER;, INCORPORATED and the T/NA; NA PAALALAISA NA.ANAAAAA?A SA ASIA pursuant to Article '8% *! of the +a$or Code, as a#ended. Accordin*l2, an2 stri-e or loc-out in the Co#pan2, whether actual or i#pendin*, is here$2 en>oined. Parties are here$2 directed to cease and desist fro# ta-in* an2 action that #i*ht e4acer$ate the situation. 4444 ITo e4pedite the resolution of this dispute, the parties are directed to su$#it in three %! copies, their Position Papers within ten "&! da2s fro# receipt of this Order and another five 7! da2s fro# receipt of the said position papers to su$#it their Repl2. I". The Co#pan2 shall $e re3uired to provide9 Ia. Co#plete Audited Cinancial State#ents for the past five 7! 2ears certified as to its co#pleteness $2 the Chief Cinancial Co#ptroller or Accountant< I$. Pro>ected Cinancial State#ents of the Co#pan2 for the ne4t three %! 2ears<

Ic. C,A histor2 as to econo#ic issues< and Id. The avera*e #onthl2 salar2 of the e#plo2ees in this $ar*ainin* unit. I'. The /nion is re3uired to provide an ite#i@ed su##ar2 of their C,A de#ands with financial costin* and sa#ple C,A0s if an2! in si#ilarl2 situated or co#para$le $ar*ainin* units. IIn the interest of speed2 la$or >ustice, this Office will entertain no #otion for e4tension or postpone#ent. IThe appropriate police authorit2 is here$2 deputi@ed to enforce this Order in case of defiance or the sa#e is not forthwith o$e2ed. ISO ORDERED.I 4444 On 5anuar2 "B, '&&), respondent union filed another petition for certiorari with the Court of Appeals, doc-eted as CA1A.R. SP No. ("8%B,i#putin* $ad faith and *rave a$use of discretion to the Secretar2 of +a$or. Respondent union pra2ed therein for the nullification of the order of assu#ption of >urisdiction and the declaration that petitioner corporation is not an industr2 indispensa$le to the national interest. In the #eanti#e, in a decision dated 5anuar2 "B, '&&), Secretar2 of +a$or Patricia Sto. To#as resolved the deadloc- $etween the parties. As su##ari@ed in a later resolution, the pu$lic respondent *ranted the followin* ar$itral awards9 "! ?AAE INCREASES as follows9 Cirst ;ear Second ;ear Third ;ear Total Q Q Q Q P"(.&& "7.&& "'.&& P)7.&&

'! EEA+TE CARE E.O! P",%&& pre#iu# to $e shouldered $2 Asia ,rewer2, Inc., for each covered e#plo2ee and P",(&& contri$ution for each /nion #e#$er1dependent. 4444 The respondent union #oved for a reconsideration of the decision on the *round that the rulin* lac-s evidentiar2 proof to sufficientl2 >ustif2 the sa#e. It also filed a IPa*lilinaw o Pa*wawastoI of the Decision. Si#ilarl2, petitioner corporation also filed a #otion for clarificationFreconsideration. The respondent Secretar2 of +a$or resolved all three #otions in a resolution dated 5anuar2 'B, '&&) 4 4 4. 4444 Thereafter, on Ce$ruar2 B, '&&), the parties e4ecuted and si*ned the Collective ,ar*ainin* A*ree#ent with a ter# fro# Au*ust ", '&&% to 5ul2 %",'&&8. Su$se3uentl2, on April ", '&&), respondent union filed another petition for certiorari $efore the Court of Appeals, which was doc-eted as SP1(%"8(, assailin* the ar$itral award and i#putin* *rave a$use of discretion upon the pu$lic respondent. 4 4 4 4) Court of Appeal0s Rulin* On Octo$er 8, '&&7, the CA rendered the first assailed Decision affir#in* with #odification the ar$itral award of the Secretar2 of +a$or, vi@9 ?EERECORE, >ud*#ent is here$2 rendered with the followin* rulin*s9 "! The assailed order dated Dece#$er "B, '&&% of pu$lic respondent Secretar2 of +a$or is ACCIR.ED . The petitions for in>unction and certiorari in CA1A.R. SP Nos. (&(%B and ("8%B are denied and accordin*l2 DIS.ISSED. '! In CA1A.R. SP No. ("%8(, the assailed decision dated 5anuar2 "B,'&&) and the order dated 5anuar2 'B, '&&) of the pu$lic respondent are here$2 .ODICIED to read as follows9 a! The present C,A is declared effective as of Au*ust ", '&&%< $! Conse3uentl2, the e#plo2ees are entitled to the ar$itral awards or $enefits fro# Au*ust ", '&&% on top of the P',7&&.&& si*nin* $onus< c! The co#putation of the wa*e increase is RE.ANDED to the pu$lic respondent< and d! The health $enefit of the e#plo2ees shall $e P",%B&.&&. LABOR CASES: SUPREME STEEL- BPI | 15

SO ORDERED.7 In #odif2in* the ar$itral award of the Secretar2 of +a$or, the CA ruled that9 "!The effectivit2 of the C,A should $e Au*ust ", '&&% $ecause this is the date a*reed upon $2 the parties and not 5anuar2 ", '&&) as decreed $2 the Secretar2 of +a$or< '! The co#putation of wa*e increase should $e re#anded to the Secretar2 of +a$or $ecause the co#putation was $ased on petitioner corporation0s unaudited financial state#ents, which have no pro$ative value pursuant to the rulin* in Restaurante +as Conchas v. +le*o,8 and was done in contravention of DO+E Advisor2 No. ", Series of '&&), which contained the *uidelines in resolvin* $ar*ainin* deadloc-s< and %! The health $enefits should $e P",%B&.&& per covered e#plo2ee $ecause petitioner corporation had alread2 a*reed to this a#ount and the sa#e cannot $e altered or reduced $2 the Secretar2 of +a$or. A**rieved, respondent union and petitioner corporation #oved for reconsideration and partial reconsideration, respectivel2. On Ce$ruar2 "6, '&&8,the CA issued an A#ended Decision, vi@ 9 ?EERECORE , the fore*oin* considered, the .otion for Reconsideration of respondent union is DENIED and the Partial .otion for Reconsideration of petitioner corporation is PARTIA++; ARANTED .Accordin*l2, Our Decision is .ODICIED and the si*nin* $onus previousl2 awarded is here$2 DE+ETED . The assailed Decision of the respondent Secretar2 with respect to the issue on salar2 increases is RE.ANDED to her office for a definite resolution within one #onth fro# the finalit2 of this Court0s Decision usin* as $asis the e4ternall2 audited financial state#ents to $e su$#itted $2 petitioner corporation. SO ORDERED.6 The CA partiall2 #odified its previous Decision $2 deletin* the award of the si*nin* $onus. It ruled that, pursuant to the e4press provisions of the C,A, the si*nin* $onus is over and $e2ond what the parties a*reed upon in the said C,A. Cro# this A#ended Decision, onl2 petitioner corporation appealed to this Court via this Petition for Review on Certiorari. Issues Petitioner corporation raises the followin* issues for our resolution9 I. ?hether the CA erred when it failed to dis#iss CA1A.R. SP No.(%"8( despite the lac- of authorit2 of those who instituted it. II. ?hether the CA erred when it re#anded to the Secretar2 of +a$or the issue on wa*e increase. III. ?hether the CA erred when it awarded P",%B&.&& as pre#iu# pa2#ent for each covered e#plo2ee.( Our Rulin* The Petition lac-s #erit. The authorit2 of Rodri*o Pere@ Pere@! to file the petition $efore the CA was not sufficientl2 refuted. Petitioner corporation clai#s that Pere@, the person who verified the Petition in CA1A.R. SP No. (%"8( 3uestionin* the propriet2 of the ar$itral award issued $2 the Secretar2 of +a$or, was without authorit2 to represent respondent union. ?hile there was a Secretar20s Certificate attached to the aforesaid Petition purportedl2 authori@in* Pere@ to file the Petition on $ehalf of the union, there was no showin* that the union president, 5ose .anuel .iranda .iranda!, called for and presided over the #eetin* when the said resolution was adopted as re3uired $2 the union0s constitution and $21laws. .oreover, the aforesaid resolution was adopted on .arch '%, '&&) while the Petition was filed on April ", '&&) or nine da2s fro# the adoption of the resolution. /nder the union0s constitution and $21laws, the decision of the $oard of directors $eco#es effective onl2 after two wee-s fro# its issuance. Thus, at the ti#e of the filin* of the aforesaid Petition, the resolution authori@in* Pere@ to file the sa#e was still ineffective. Petitioner corporation also adverts to two la$or cases alle*edl2 divestin* Pere@ of authorit2 to represent the union in the case $efore the appellate court. ?e disa*ree. The Secretar20s CertificateB attached to the Petition in CA1A.R. SP No.(%"8( stated that the union0s $oard of directors held a special #eetin* on .arch'%, '&&) and unani#ousl2 passed a resolution authori@in* Pere@ to file a Petition $efore the CA to 3uestion the Secretar2 of +a$or0s ar$itral award. "& ?hile petitioner corporation clai#s that the proper procedure for callin* such a #eetin* was not followed, it presented no proof to esta$lish the sa#e. .iranda, the union president who alle*edl2 did

not call for and preside over the said #eetin*, did not co#e out to contest the validit2 of the aforesaid resolution or Secretar20s Certificate. Si#ilarl2, petitioner corporation0s clai# that the aforesaid resolution was still ineffective at the ti#e of the filin* of the su$>ect Petition is unsu$stantiated. A fair readin* of the provisions which petitioner corporation cited in the union0s constitution and $21laws, particularl2 Article DIII, Section '"" thereof, would show that the sa#e refers to decisions of the $oard of directors re*ardin* the laws or rules that would *overn the union, hence, the necessit2 of a two1wee- prior notice to the affected parties $efore the2 $eco#e effective. These provisions have not $een shown to appl2 to resolutions *rantin* authorit2 to individuals to represent the union in court cases. ,esides, even if we assu#e that these provisions in the union0s constitution and $21laws appl2 to the su$>ect resolution, the continuin* silence of the union, fro# the ti#e of its adoption to the filin* of the Petition with the CA and up to this point in these proceedin*s, would indicate that such defect, if at all present, in the authorit2 of Pere@ to file the su$>ect Petition, was i#pliedl2 ratified $2 respondent union itself. As to the two la$or cases alle*edl2 divestin* Pere@ of the authorit2 to file the su$>ect Petition, an e4a#ination of the sa#e would show that the2 did not affect the le*al capacit2 of Pere@ to file the su$>ect Petition. The first la$or case i.e., RO)&&1&)&61A/1&&', "' RO)&&1&)&B1A/1&&8,"% and RO)&&1 &)"'1A/1&&"")! involved the #ove of Pere@ and other union #e#$ers to a#end the union0s Constitution and ,21+aws in order to include a provision on recall elections and to conduct a recall elections on 5une '8, '&&). In that case, the .ed1Ar$iter, in his 5anuar2 '7, '&&7 Order, "7 ruled that the a#end#ent sou*ht to $e introduced was not validl2 ratified $2 the re3uisite two1thirds vote fro# the union #e#$ership. As a result, the recall elections held on 5une '8, '&&) was annulled. "8 The second la$or case i.e. , N+RC NCR CC No. &&&'('1&)"6 and N+RC1RA, ID1"'1'&'&&1&)1+"(! involved the stri-e sta*ed $2 Pere@ and other union #e#$ers on Octo$er ), '&&). There, the National +a$or Relations Co##ission, in its .arch '&&8Decision,"B ruled that the stri-e was ille*al and, as a conse3uence, Pere@ and the other union #e#$ers were declared to have lost their e#plo2#ent status.'& These two la$or cases had no $earin* on the le*al capacit2 of Pere@ to represent the union in CA1A.R. SP No. (%"8( $ecause "! the2 did not nullif2 the authorit2 *ranted to Pere@ in the .arch '%, '&&) resolution of the union0s $oard of directors to file the su$>ect Petition, and '! the #aterial facts of these cases occurred and the Decisions thereon were rendered after the su$>ect Petition was alread2 filed with the CA on April ", '&&). The re#and of this case to the Secretar2 of +a$or as to the issue of wa*e increase was proper. Petitioner corporation ad#its that what it su$#itted to the Secretar2 of +a$or were unaudited financial state#ents which were then used as one of the $ases in fi4in* the wa*e award. Eowever, petitioner corporation ar*ues that these financial state#ents were dul2 si*ned and certified $2 its chief financial officer. These state#ents have also $een alle*edl2 su$#itted to various *overn#ent a*encies and should, thus, $e considered official and pu$lic docu#ents. .oreover, respondent union did not o$>ect to the su$>ect financial state#ents in the proceedin*s $efore the Secretar2 of +a$or and even used the sa#e in for#ulatin* its the union0s! ar*u#ents in said proceedin*s. Thus, petitioner corporation contends that althou*h the su$>ect financial state#ents were not audited $2 an e4ternal and independent auditor, the sa#e should $e considered su$stantial co#pliance with the order of the Secretar2 of +a$or to produce the petitioner corporation0s co#plete audited financial state#ents for the past five 2ears. Curther#ore, the Decision of the Secretar2 of +a$or was not solel2 $ased on the su$>ect financial state#ents as the C,A histor2, costin* of the proposals, and wa*es in other si#ilarl2 situated $ar*ainin* units were considered. Cinall2, petitioner corporation clai#s that the de#ands of respondent union on wa*e increase are unrealistic and will cause the for#er to close shop. The contention is untena$le. In Restaurante +as Conchas v. +le*o, '" several e#plo2ees filed a case for ille*al dis#issal after the e#plo2er closed its restaurant $usiness. The e#plo2er sou*ht to >ustif2 the closure throu*h unaudited financial state#ents showin* the alle*ed losses of the $usiness. ?e ruled that such financial state#ents are #ere self1servin* declarations and inad#issi$le in evidence even if the e#plo2ees did not o$>ect to their presentation $efore the +a$or Ar$iter. '' Si#ilarl2, in /ichico v. National +a$or Relations Co##ission,'% the services of several e#plo2ees were ter#inated on the *round of retrench#ent due to alle*ed serious $usiness losses suffered $2 the e#plo2er. ?e ruled that $2 LABOR CASES: SUPREME STEEL- BPI | 16

su$#ittin* unaudited financial state#ents, the e#plo2er failed to prove the alle*ed $usiness losses, vi@ 9 4 4 4 It is true that ad#inistrative and 3uasi1>udicial $odies li-e the N+RC are not $ound $2 the technical rules of procedure in the ad>udication of cases. Eowever, this procedural rule should not $e construed as a license to disre*ard certain funda#ental evidentiar2 rules. ?hile the rules of evidence prevailin* in the courts of law or e3uit2 are not controllin* in proceedin*s $efore the N+RC, the evidence presented $efore it #ust at least have a #odicu# of ad#issi$ilit2 for it to $e *iven so#e pro$ative value. The State#ent of Profit and +osses su$#itted $2 Crispa, Inc. to prove its alle*ed losses, without the acco#pan2in* si*nature of a certified pu$lic accountant or audited $2 an independent auditor, are nothin* $ut self1servin* docu#ents which ou*ht to $e treated as a #ere scrap of paper devoid of an2 pro$ative value. Cor sure, this is not the -ind of sufficient and convincin* evidence necessar2 to dischar*e the $urden of proof re3uired of petitioners to esta$lish the alle*ed losses suffered $2 Crispa, Inc. in the 2ears i##ediatel2 precedin* "BB& that would >ustif2 the retrench#ent of respondent e#plo2ees. 4 4 4') ?hile the a$ove1cited cases involve proof necessar2 to esta$lish losses in cases of $usiness closure or retrench#ent, we see no reason wh2 this rule should not e3uall2 appl2 to the deter#ination of the proper level of wa*e award in cases where the Secretar2 of +a$or assu#es >urisdiction in a la$or dispute pursuant to Article '8% *!'7 of the +a$or Code. In .ERA+CO v. Sec. Muisu#$in*, '8 we had occasion to e4pound on the e4tent of our review powers over the ar$itral award of the Secretar2 of +a$or, in *eneral, and the factors that the Secretar2 of +a$or #ust consider in deter#inin* the proper wa*e award, in particular, vi@9 The e4tent of >udicial review over the Secretar2 of +a$orOs ar$itral award is not li#ited to a deter#ination of *rave a$use in the #anner of the secretar2Os e4ercise of his statutor2 powers. This Court is entitled to, and #ust R in the e4ercise of its >udicial power R review the su$stance of the Secretar2Os award when *rave a$use of discretion is alle*ed to e4ist in the award, i.e., in the appreciation of and the conclusions the Secretar2 drew fro# the evidence presented. 4444 In this case we $elieve that the #ore appropriate and availa$le standard R and one does not re3uire a constitutional interpretation R is si#pl2 the standard of reasona$leness. In la2#anOs ter#s, reasona$leness i#plies the a$sence of ar$itrariness< in le*al parlance, this translates into the e4ercise of proper discretion and to the o$servance of due process. Thus, the 3uestion we have to answer in decidin* this case is whether the Secretar2Os actions have $een reasona$le in li*ht of the partiesO positions and the evidence the2 presented. 4444 This Court has reco*ni@ed the Secretar2 of +a$orOs distinct e4pertise in the stud2 and settle#ent of la$or disputes fallin* under his power of co#pulsor2 ar$itration. It is also well1settled that factual findin*s of la$or ad#inistrative officials, if supported $2 su$stantial evidence, are entitled not onl2 to *reat respect $ut even to finalit2. 4 4 4 ,ut at the sa#e ti#e, we also reco*ni@e the possi$ilit2 that a$use of discretion #a2 attend the e4ercise of the Secretar2Os ar$itral functions< his findin*s in an ar$itration case are usuall2 $ased on position papers and their supportin* docu#ents as the2 are in the present case!, and not on the thorou*h e4a#ination of the partiesO contendin* clai#s that #a2 $e present in a court trial and in the face1to1face adversarial process that $etter insures the proper presentation and appreciation of evidence. There #a2 also $e *rave a$use of discretion where the $oard, tri$unal or officer e4ercisin* >udicial function fails to consider evidence adduced $2 the parties. Aiven the partiesO positions on the >usticia$ilit2 of the issues $efore us, the 3uestion we have to answer is one that *oes into the su$stance of the Secretar2Os disputed orders9 Did the Secretar2 properl2 consider and appreciate the evidence presented $efore hi#S 4444 ?hile ?e do not see- to enu#erate in this decision the factors that should affect wa*e deter#ination, we #ust e#phasi@e that a collective $ar*ainin* dispute such as this one re3uires due consideration and proper $alancin* of the interests of the parties to the dispute and of those who #i*ht $e affected $2 the dispute. To our #ind, the $est wa2 in approachin* this tas- holisticall2 is to consider the availa$le o$>ective facts, includin*, where applica$le, factors such as the $ar*ainin* histor2 of the co#pan2, the trends and a#ounts of ar$itrated and a*reed wa*e awards and the co#pan2Os previous C,As, and industr2 trends in *eneral. As a rule, afforda$ilit2 or capacit2 to pa2 should $e ta-en into account $ut

cannot $e the sole 2ardstic- in deter#inin* the wa*e award, especiall2 in a pu$lic utilit2 li-e .ERA+CO.1wphi1 In considerin* a pu$lic utilit2, the decision #a-er #ust alwa2s ta-e into account the Ipu$lic interestI aspects of the case< .ERA+COOs inco#e and the a#ount of #one2 availa$le for operatin* e4penses R includin* la$or costs R are su$>ect to State re*ulation. ?e #ust also -eep in #ind that hi*h operatin* costs will certainl2 and eventuall2 $e passed on to the consu#in* pu$lic as .ERA+CO has $luntl2 warned in its pleadin*s. ?e ta-e note of the I#iddle *roundI approach e#plo2ed $2 the Secretar2 in this case which we do not necessaril2 find to $e the $est #ethod of resolvin* a wa*e dispute. .erel2 findin* the #idwa2 point $etween the de#ands of the co#pan2 and the union, and Isplittin* the differenceI is a si#plistic solution that fails to reco*ni@e that the parties #a2 alread2 $e at the li#its of the wa*e levels the2 can afford. It #a2 lead to the dan*er too that neither of the parties will en*a*e in principled $ar*ainin*< the co#pan2 #a2 -eep its position artificiall2 low while the union presents an artificiall2 hi*h position, on the fear that a ISolo#onicI solution cannot $e avoided. Thus, rather than encoura*e a*ree#ent, a I#iddle *round approachI instead pro#otes a Ipla2 safeI attitude that leads to #ore deadloc-s than to successfull2 ne*otiated C,As.'6 Thus, we rule that the Secretar2 of +a$or *ravel2 a$used her discretion when she relied on the unaudited financial state#ents of petitioner corporation in deter#inin* the wa*e award $ecause such evidence is self1servin* and inad#issi$le. Not onl2 did this violate the Dece#$er "B, '&&% Order '( of the Secretar2 of +a$or herself to petitioner corporation to su$#it its co#plete audited financial state#ents, $ut this #a2 have resulted to a wa*e award that is $ased on an inaccurate and $iased picture of petitioner corporationOs capacit2 to pa2 R one of the #ore si*nificant factors in #a-in* a wa*e award. Petitioner corporation has offered no reason wh2 it failed andFor refused to su$#it its audited financial state#ents for the past five 2ears relevant to this case. This onl2 further casts dou$t as to the veracit2 and accurac2 of the unaudited financial state#ents it su$#itted to the Secretar2 of +a$or. Deril2, we cannot countenance this procedure $ecause this could undul2 deprive la$or of its ri*ht to a >ust share in the fruits of production 'B and provide e#plo2ers with a #eans to understate their profita$ilit2 in order to defeat the ri*ht of la$or to a >ust wa*e. ?e also note with disapproval the #anner $2 which the Secretar2 of +a$or issued the wa*e award in this case, effectivel2 pa2in* lip service to the *uidelines we laid down in .eralco. To ela$orate, the Secretar2 of +a$or held9 ,ased on such factors as ,ARAAININA EISTOR;, TRENDS OCAR,ITRATED AND AAREED A?ARDS AND IND/STR; TRENDS, in *eneral, we hold that vis1T1vis the /nion0s de#ands and the Co#pan20s offers, as follows9 UNION67S8 DEMANDS Cor the CIRST ;EAR9 Cor the SECOND ;EAR9 Cor the TEIRD ;EAR9 TOTA+9 P%8 %8 %8 QQQQQQQ P"&( for three %! 2ears QQQQQQQ P%8 for %8 #onths COMPAN+7S O,,ERS Cor the Cirst "( #onths9 Cor the Second "( #onths9 P"( "(

this Office awards the followin* wa*e increases9 Cor the CIRST ;EAR9 Cor the SECOND ;EAR9 Cor the TEIRD ;EAR9 P"( "7 "'P QQQQ )7 for three %! 2ears%& LABOR CASES: SUPREME STEEL- BPI | 17

As can $e seen, the Secretar2 of +a$or failed to indicate the actual data upon which the wa*e award was $ased.1wphi1 It even appears that she utili@ed the I#iddle *roundI approach which we precisel2 warned a*ainst in .eralco . Cactors such as the actual and pro>ected net operatin* inco#e, i#pact of the wa*e increase on net operatin* inco#e, the co#pan2Os previous C,As, and industr2 trends were not discussed in detail so that the precise $ases of the wa*e award are not discerni$le on the face of the Decision. The contendin* parties are effectivel2 precluded fro# see-in* a review of the wa*e award, even if proper under our rulin* in .eralco , $ecause of the *eneral $ut unsu$stantiated state#ent in the Decision that the wa*e award was $ased on factors li-e the $ar*ainin* histor2, trends of ar$itrated and a*reed awards, and industr2 trends. In fine, there is no wa2 of deter#inin* if the Secretar2 of +a$or utili@ed the proper evidence, fi*ures or data in arrivin* at the su$>ect wa*e award as well as the reasona$leness thereof. This falls short of the re3uire#ent of ad#inistrative due process o$li*atin* the decision1#a-er to ad>udicate the ri*hts of the parties in such a #anner that the2 can -now the various issues involved and the reasons for the decision rendered.%" ,ased on the fore*oin*, we hold that the Secretar2 of +a$or *ravel2 a$used her discretion in #a-in* the su$>ect wa*e award. The appellate court, thus, correctl2 re#anded this case to the Secretar2 of +a$or for the proper deter#ination of the wa*e award which should utili@e, a#on* others, the audited financial state#ents of petitioner corporation and state with sufficient clarit2 the facts and law on which the wa*e award is $ased. The odi!ication o! the ar"itral award on health "ene!its !ro #1,$%%.%% to #1,$&%.%% was proper. The CA held that the Secretar2 of +a$or *ravel2 a$used her discretion when the latter awarded P",%&&.&& as pre#iu# pa2#ent for each covered e#plo2ee $ecause the #inutes of the Octo$er "6, '&&% collective $ar*ainin* ne*otiations $etween the parties showed that the2 had previousl2 a*reed to a hi*her P",%B&.&& pre#iu# pa2#ent for each covered e#plo2ee. Eowever, petitioner corporation clai#s that it never a*reed to this hi*her a#ount as $orne out $2 the sa#e #inutes. The final offer of petitioner corporation on this ite# was alle*edl2 to provide onl2 P",%&&.&& not P",%B&.&&! as pre#iu# pa2#ent for each covered e#plo2ee. ?e have reviewed the #inutes%' of the Octo$er "6, '&&% collective $ar*ainin* ne*otiations adverted to $2 $oth parties. A fair readin* thereof indicates that the issue of pre#iu# pa2#ents underwent several proposals and counter1proposals fro# petitioner corporation and respondent union, respectivel2. The last proposal of petitioner corporation relative thereto was to allot P",%B&.&& as pre#iu# pa2#ent per covered e#plo2ee provided that it petitioner corporation! would not shoulder the pre#iu# pa2#ents of the e#plo2ee0s dependents. Cor its part, respondent union accepted the proposal provided that the pre#iu# pa2#ent would $e rene*otiated on the second and third 2ears of the C,A. Conse3uentl2, $oth parties a*reed at the #ini#u# that the pre#iu# pa2#ent shall $e P",%B&.&& per covered e#plo2ee and the re#ainin* point of contention was whether the pre#iu# pa2#ent could $e rene*otiated on the second and third 2ears of the C,A. It was, thus, *rave a$use of discretion on the part of the Secretar2 of +a$or to reduce the award to P",%&&.&& which is $elow the #ini#u# of P",%B&.&& previousl2 a*reed upon $2 the parties. ?e also note that in the proceedin*s $efore the CA, respondent union onl2 pleaded for the award of the P",%B&.&& pre#iu# pa2#ent per covered e#plo2ee%% there$2 effectivel2 waivin* its proposal on the rene*otiation of the pre#iu# pa2#ent on the second and third 2ears of the C,A. ?EERECORE, the Petition is DENIED. The Ce$ruar2 "6, '&&8 A#ended Decision of the Court of Appeals in CA1A.R. SP Nos. (&(%B, ("8%B, and (%"8( is ACCIR.ED.

LABOR CASES: SUPREME STEEL- BPI

| 18

G.R. No. 1%/552 March 10, 2010 GENERAL MILLING CORPORATION, Petitioner, vs. ERNESTO CASIO, ROLANDO IGOT, MARIO ,AMADOR, NELSON LIM, ,ELICISIMO .OOC, PROCOPIO O.REGON, &R., a'9 ANTONIO ANINIPOK, Respondents, a'9 :IRGILIO PINO, PAULINO CA.REROS, MA. LUNA P. &UMAOAS, DOMINADOR .OOC, ,IDEL :ALLE, .ARTOLOME AUMAN, REMEGIO CA.ANTAN, LORETO GON0AGA, EDIL.ERTO MENDO0A a'9 ANTONIO PANILAG, Respondents. DECISION LEONARDO!DE CASTRO, J.: This is a Petition for Review on Certiorari under Rule )7 of the Rules of Court see-in* the reversal of the Decision" dated .arch %&, '&&" and Resolution ' dated 5ul2 "(, '&&" of the Court of Appeals in CA1 A.R. SP No. )&'(&, settin* aside the Doluntar2 Ar$itration Award % dated Au*ust "8, "BB7 of the National Conciliation and .ediation ,oard NC.,!, Ce$u Cit2, in DA Case No. AC %(B1&"1&"1B7. Doluntar2 Ar$itrator Alice L. Canono21.orada Canono21.orada! dis#issed the Co#plaint filed $2 respondents Ernesto Casio, Rolando I*ot, .ario Ca#ador, Nelson +i#, Celicisi#o ,ooc, Procopio O$re*on, 5r. and Antonio Aninipo- Casio, et al.! a*ainst petitioner Aeneral .illin* Corporation A.C! for unfair la$or practice, ille*al suspension, ille*al dis#issal, and pa2#ent of #oral and e4e#plar2 da#a*es. The la$or union Ilaw at ,u-lod n* .an*a*awa I,.!1+ocal %" Chapter +ocal %"! was the sole and e4clusive $ar*ainin* a*ent of the ran- and file e#plo2ees of A.C in +apu1+apu Cit2. On Nove#$er %&, "BB", I,.1+ocal %", throu*h its officers and $oard #e#$ers, na#el2, respondents Dir*ilio Pino, ) Paulino Ca$reros, .a. +una P. 5u#aoas, Do#inador ,ooc, ,artolo#e Au#an, Re#e*io Ca$antan, Cidel Dalle, +oreto Aon@a*a, Edil$erto .endo@a and Antonio Panila* Pino, et al.!, entered into a Collective ,ar*ainin* A*ree#ent C,A! with A.C. The effectivit2 of the said C,A was retroactive to Au*ust ", "BB".7 The C,A contained the followin* union securit2 provisions9 Section %. .AINTENANCE OC .E.,ERSEIP K All e#plo2eesFwor-ers e#plo2ed $2 the Co#pan2 with the e4ception of those who are specificall2 e4cluded $2 law and $2 the ter#s of this A*ree#ent #ust $e #e#$ers in *ood standin* of the /nion within thirt2 %&! da2s upon the si*nin* of this a*ree#ent and shall #aintain such #e#$ership in *ood standin* thereof as a condition of their e#plo2#ent or continued e#plo2#ent. Section 8. The Co#pan2, upon written re3uest of the /nion, shall ter#inate the services of an2 e#plo2eeFwor-er who fails to fulfill the conditions set forth in Sections % and ) thereof, su$>ect however, to the provisions of the +a$or +aws of the Philippines and their I#ple#entin* Rules and Re*ulations. The /nion shall a$solve the Co#pan2 fro# an2 and all lia$ilities, pecuniar2 or otherwise, and responsi$ilities to an2 e#plo2ee or wor-er who is dis#issed or ter#inated in pursuant thereof.8 Casio, et al. were re*ular e#plo2ees of A.C with dail2 earnin*s ran*in* fro# P"6%.67 to P'&".7&, and len*th of service var2in* fro# ei*ht to '7 2ears. 6 Casio was elected I,.1+ocal %" President for a three1 2ear ter# in 5une "BB", while his co1respondents were union shop stewards. In a letter( dated Ce$ruar2 '), "BB', Rodolfo Aa$iana Aa$iana!, the I,. Re*ional Director for Disa2as and .indanao, furnished Casio, et al. with copies of the Affidavits of A.C e#plo2ees ,asilio Inoc and 5uan Potot, char*in* Casio, et al. with Iacts ini#ical to the interest of the union.I Throu*h the sa#e letter, Aa$iana *ave Casio, et al. three da2s fro# receipt thereof within which to file their answers or counter1affidavits. Eowever, Casio, et al. refused to ac-nowled*e receipt of Aa$iana0s letter. Su$se3uentl2, on Ce$ruar2 'B, "BB', Pino, et al., as officers and #e#$ers of the I,.1+ocal %", issued a ResolutionB e4pellin* Casio, et al. fro# the union. Pertinent portions of the Resolution are reproduced $elow9 ?hereas, Celicisi#o ,ooc, Rolando I*ot, Procopio O$re*on, 5r., Antonio Aninipo-, .ario Ca#ador, Nelson +i# and Ernesto Casio, throu*h Ernesto Casio have refused to ac-nowled*e receipt of the letter1co#plaint dated Ce$ruar2 '), "BB', re3uirin* the# to file their answerGsH or counter1affidavits as a*ainst the char*e of Iacts ini#ical to the interest of the unionI and that in view of such refusal to ac-nowled*e receipt, a cop2 of said letter co#plaint was dropped or left in front of E. Casio<

?hereas, the three %!G1Hda2 period *iven to file their answer or counter1affidavit have alread2 lapsed pro#ptin* the union ,oard to investi*ate the char*e e4 parte< ?hereas, after such e4 parte investi*ation the said char*e has $een #ore than ade3uatel2 su$stantiated $2 the affidavitsFwitnesses and docu#entar2 e4hi$its presented. NO?, TEERECORE, RESO+DED as it is here$2 RESO+DED, that Ernesto Casio, Celicisi#o ,ooc, Rolando I*ot, Procopio O$re*on, 5r., Antonio Aninipo-, .ario Ca#ador and Nelson +i# $e e4pelled as union #e#$erGsH of *ood standin* effectivel2 i##ediatel2. RESO+DED C/RTEER, to furnish cop2 of this Resolution to the A.C .ana*e#ent for their infor#ation and *uidance with the reco##endation as it is here$2 reco##ended to dis#iss the a$ove1 na#ed e#plo2ees fro# wor-. Aa$iana then wrote a letter"& dated .arch "&, "BB', addressed to Eduardo Ca$ahu* Ca$ahu*!, A.C Dice1President for En*ineerin* and Plant Ad#inistration, infor#in* the co#pan2 of the e4pulsion of Casio, et al. fro# the union pursuant to the Resolution dated Ce$ruar2 'B, "BB' of I,.1+ocal %" officers and $oard #e#$ers. Aa$iana li-ewise re3uested that Casio, et al. I$e i##ediatel2 dis#issed fro# their wor- for the interest of industrial peace in the plant.I Aa$iana followed1up with another letter "" dated .arch "B, "BB', in3uirin* fro# Ca$ahu* wh2 Casio, et al. were still e#plo2ed with A.C despite the re3uest of I,.1+ocal %" that Casio, et al. $e i##ediatel2 dis#issed fro# service pursuant to the closed shop provision in the e4istin* C,A. Aa$iana reiterated the de#and of I,.1+ocal %" that A.C dis#iss Casio, et al., with the warnin* that failure of A.C to do so would constitute *ross violation of the e4istin* C,A and constrain the union to file a case for unfair la$or practice a*ainst A.C. Pressured $2 the threatened filin* of a suit for unfair la$or practice, A.C acceded to Aa$iana0s re3uest to ter#inate the e#plo2#ent of Casio, et al. A.C issued a .e#orandu# dated .arch '), "BB' ter#inatin* the e#plo2#ent of Casio, et al. effective April '), "BB' and placin* the latter under preventive suspension for the #eanti#e. On .arch '6, "BB', Casio, et al., in the na#e of I,.1+ocal %", filed a Notice of Stri-e with the NC.,1 Re*ional Office No. DII NC.,1RO!. Casio, et al. alle*ed as $ases for the stri-e the ille*al dis#issal of union officers and #e#$ers, discri#ination, coercion, and union $ustin*. The NC.,1RO held conciliation proceedin*s, $ut no settle#ent was reached a#on* the parties."' Casio, et al. ne4t sou*ht recourse fro# the National +a$or Relations Co##ission N+RC! Re*ional Ar$itration ,ranch DII $2 filin* on Au*ust %, "BB' a Co#plaint a*ainst A.C and Pino, et al. for unfair la$or practice, particularl2, the ter#ination of le*iti#ate union officers, ille*al suspension, ille*al dis#issal, and #oral and e4e#plar2 da#a*es. Their Co#plaint was doc-eted as N+RC Case No. RA,1 DII1&(1&8%B1B'."% Cindin* that N+RC Case No. RA,1DII1&(1&8%B1B' did not under*o voluntar2 ar$itration, the +a$or Ar$iter dis#issed the case for lac- of >urisdiction, $ut endorsed the sa#e to the NC.,1RO. Prior to under*oin* voluntar2 ar$itration $efore the NC.,1RO, however, the parties a*reed to first su$#it the case to the *rievance #achiner2 of I,.1+ocal %". On Septe#$er 6, "BB), Casio, et al. filed their Co#plaint with Pino, the Actin* President of I,.1+ocal %". Pino ac-nowled*ed receipt of the Co#plaint and assured Casio, et al. that the2 would $e Iseasona$l2 notified of whatever decision andFor action the ,oard #a2 have in the instant case.I ") ?hen the I,.1+ocal %" ,oard failed to hold *rievance proceedin*s on the Co#plaint of Casio, et al., NC., Doluntar2 Ar$itrator Canono21.orada assu#ed >urisdiction over the sa#e. The Co#plaint was doc-eted as DA Case No. AC %(B1&"1&"1B7. ,ased on the Position Papers and other docu#ents su$#itted $2 the parties, "7 Doluntar2 Ar$itrator Canono21.orada rendered on Au*ust "8, "BB7 a Doluntar2 Ar$itration Award dis#issin* the Co#plaint in DA Case No. AC %(B1&"1&"1B7 for lac- of #erit, $ut *rantin* separation pa2 and attorne20s fees to Casio, et al. The Doluntar2 Ar$itration Award presented the followin* findin*s9 "! the ter#ination $2 A.C of the e#plo2#ent of Casio, et al. was in valid co#pliance with the closed shop provision in the C,A< '! A.C had no co#petence to deter#ine the *ood standin* of a union #e#$er< %! Casio, et al. waived their ri*ht to due process when the2 refused to receive Aa$iana0s letter dated Ce$ruar2 '), "BB', which re3uired the# to su$#it their answer to the char*es a*ainst the#< )! the preventive suspension of Casio, et al. $2 A.C was an act of self1defense< and 7! the I,.1+ocal %" Resolution dated Ce$ruar2 'B, "BB' e4pellin* Casio, et al. as union #e#$ers, also auto#aticall2 ousted the# as union officers."8 The dispositive portion of the Doluntar2 Ar$itration Award reads9 ?EERECORE, a$ove pre#ises considered, this case filed $2 GCasio, et al.H is here$2 ordered DIS.ISSED for lac- of #erit. LABOR CASES: SUPREME STEEL- BPI | 19

Since the dis#issal is not for a cause detri#ental to the interest of the co#pan2, respondent Aeneral .illin* Corporation is, nonetheless, ordered to pa2 separation pa2 to all GCasio, et al.H within seven 6! calendar da2s upon receipt of this order at the rate of one1half #onth per 2ear of service rec-oned fro# the ti#e of their e#plo2#ent until the date of their separation on .arch '), "BB', thus9 E#plo2ee Date Eired RateF.onth Service "F' #oF2r of service! P',8%8.'B P',)6'.67 P',)B(.B' P',)88.'" P',)B(.B' P','6%.'% P',8"8.&" 4 "( 2ears Q 4 "' 2ears Q 4 "7 2ears Q 4 "6 2ears Q 4 ") 2ears Q 4 &( 2ears Q 4 '7 2ears Q Total

Casio I*ot Ca#ador +i# ,ooc O$re*on Aninipo-

April ')F6) .a2 "B(& Ce$. "B66 Au*. "B67 Au*. "B6( .a2 "B() Sept. "B86

P)6,)7%.'' P'B,86%.&& P%6,)(%.(& P)",B'7.76 P%),B().(( P"(,"(7.() P87,)&&.'7

The attorne20s fees for GCasio, et al.0sH counsel shall $e ten percent "&P! of the total a#ount due the#< and shall $e shared proportionatel2 $2 all of the sa#e GCasio, et al.H. All other clai#s are here$2 denied."6 Dissatisfied with the Doluntar2 Ar$itration Award, Casio, et al. went to the Court of Appeals $2 wa2 of a Petition for Certiorari under Rule 87 of the Rules of Court to have said Award set aside. The Court of Appeals *ranted the writ of certiorari and set aside the Doluntar2 Ar$itration Award. The appellate court ruled that while the dis#issal of Casio, et al., was #ade $2 A.C pursuant to a valid closed shop provision under the C,A, the co#pan2, however, failed to o$serve the ele#entar2 rules of due process in i#ple#entin* the said dis#issal. Conse3uentl2, Casio, et al. were entitled to reinstate#ent with $ac-wa*es fro# the ti#e of their dis#issal up to the ti#e of their reinstate#ent. Nevertheless, the Court of Appeals did not hold A.C lia$le to Casio, et al. for #oral and e4e#plar2 da#a*es and attorne20s fees, there $ein* no showin* that their dis#issal was attended $2 $ad faith or #alice, or that the dis#issal was effected in a wanton, oppressive, or #alevolent #anner, *iven that A.C #erel2 acco##odated the re3uest of I,.1+ocal %". The appellate court, instead, #ade Pino, et al. lia$le to Casio, et al., for #oral and e4e#plar2 da#a*es and attorne20s fees, since it was on the $asis of the i#putations and actuations of Pino, et al. that Casio, et al. were ille*all2 dis#issed fro# e#plo2#ent. The Court of Appeals thus decreed9 ?EERECORE, the assailed award is here$2 SET ASIDE, and private respondent Aeneral .illin* Corporation is here$2 ordered to reinstate GCasio, et al.H to their for#er positions without loss of seniorit2 ri*hts, and to pa2 their full $ac-wa*es, solidaril2 with GPino, et al.H. Curther, GPino, et al.H are ordered to inde#nif2 each of GCasio, et al.H in the for# of #oral and e4e#plar2 da#a*es in the a#ounts of P7&,&&&.&& and P%&,&&&.&&, respectivel2, and to pa2 attorne20s fees."( The .otion for Reconsideration of A.C was denied $2 the Court of Appeals in the Resolution dated 5ul2 "(, '&&". Eence, A.C filed the instant Petition for Review, ar*uin* that9 I TEE EONORA,+E P/,+IC RESPONDENT CO..ITTED ARADE A,/SE OC DISCRETION A.O/NTINA TO +ACL OC OR E:CESS OC 5/RISDICTION ?EEN IT SET ASIDE TEE A?ARD OC TEE DO+/NTAR; AR,ITRATOR, AND IN A?ARDINA REINSTATE.ENT AND C/++ ,ACL?AAES TO GCasio, et al.H. II TEE EONORA,+E P/,+IC RESPONDENT CO..ITTED ARADE A,/SE OC DISCRETION A.O/NTINA TO +ACL OR E:CESS OC 5/RISDICTION ?EEN IT SAID TEAT PETITIONER A.C CAI+ED TO ACCORD D/E PROCESS TO GCasio, et al.H. III

TEE EONORA,+E P/,+IC RESPONDENT CO..ITTED ARADE A,/SE OC DISCRETION A.O/NTINA TO +ACL OC OR E:CESS OC 5/RISDICTION ?EEN IT DID NOT A,SO+DE PETITIONER A.C OC AN; +IA,I+IT; AND INSTEAD R/+ED TEAT IT ?AS SO+IDARI+; +IA,+E ?ITE TEE /NION OCCICERS COR TEE PA;.ENT OC C/++ ,ACL?AAES TO GCasio, et al.H. At this point, we ta-e note that Pino, et al. did not appeal fro# the decision of the Court of Appeals. A.C avers that in reviewin* and reversin* the findin*s of the Doluntar2 Ar$itrator, the Court of Appeals departed fro# the principle of conclusiveness of the trial >ud*e0s findin*s. A.C also clai#s that the findin*s of the Doluntar2 Ar$itrator as to the le*alit2 of the ter#ination fro# e#plo2#ent of Casio, et al. are well supported $2 evidence. A.C further insists that $efore I,P1+ocal %" e4pelled Casio, et al. fro# the union and re3uested A.C to dis#iss Casio, et al. fro# service pursuant to the closed shop provision in the C,A, I,P1+ocal %" alread2 accorded Casio, et al. due process, onl2 that Casio, et al. refused to avail the#selves of such opportunit2. A.C additionall2 #aintains that Casio, et al. were e4pelled $2 I,P1+ocal %" for Iacts ini#ical to the interest of the union,I and A.C had no authorit2 to in3uire into or rule on which e#plo2ee1#e#$er is or is not lo2al to the union, this $ein* an internal affair of the union. Thus, A.C had to rel2 on the presu#ption that Pino, et al. re*ularl2 perfor#ed their duties and functions as I,P1+ocal %" officers and $oard #e#$ers, when the latter investi*ated and ruled on the char*es a*ainst Casio, et al."B A.C finall2 asserts that Pino, et al., the I,P1+ocal %" officers and $oard #e#$ers who resolved to e4pel Casio, et al. fro# the union, and not A.C, should $e held lia$le for the reinstate#ent of and pa2#ent of full $ac-wa*es to Casio, et al. for the co#pan2 had acted in *ood faith and #erel2 co#plied with the closed shop provision in the C,A. On the other hand, Casio, et al. counters that A.C failed to identif2 the specific pieces of evidence supportin* the findin*s of the Doluntar2 Ar$itrator. Casio, et al. contends that to accord the# due process, A.C itself, as the e#plo2er, should have held proceedin*s distinct and separate fro# those conducted $2 I,.1+ocal %". A.C cannot >ustif2 its failure to conduct its own in3uir2 usin* the ar*u#ent that such proceedin*s would constitute an intrusion $2 the co#pan2 into the internal affairs of the union. The clai# of A.C that it had acted in *ood faith when it dis#issed Casio, et al. fro# service in accordance with the closed shop provision of the C,A is inconsistent with the failure of the co#pan2 to accord the dis#issed e#plo2ees their ri*ht to due process. In *eneral, in a Ipetition for review on certiorari as a #ode of appeal under Rule )7 of the Rules of Court, the petitioner can raise onl2 3uestions of law 1 the Supre#e Court is not the proper venue to consider a factual issue as it is not a trier of facts. A departure fro# the *eneral rule #a2 $e warranted where the findin*s of fact of the Court of Appeals are contrar2 to the findin*s and conclusions of the trial court Gor 3uasi1>udicial a*enc2, as the case #a2 $eH, or when the sa#e is unsupported $2 the evidence on record.I'& ?hether Casio, et al. were ille*all2 dis#issed without an2 valid reason is a 3uestion of fact $etter left to 3uasi1>udicial a*encies to deter#ine. In this case, the Doluntar2 Ar$itrator was convinced that Casio, et al. were le*all2 dis#issed< while the Court of Appeals $elieved the opposite, $ecause even thou*h the dis#issal of Casio, et al. was #ade $2 A.C pursuant to a valid closed shop provision in the C,A, the co#pan2 still failed to o$serve the ele#entar2 rules of due process. The Court is therefore constrained to ta-e a second loo- at the evidence on record considerin* that the factual findin*s of the Doluntar2 Ar$itrator and the Court of Appeals are contradictor2. There are two aspects which characteri@e the concept of due process under the +a$or Code9 one is su$stantive K whether the ter#ination of e#plo2#ent was $ased on the provision of the +a$or Code or in accordance with the prevailin* >urisprudence< the other is procedural K the #anner in which the dis#issal was effected.'" After a thorou*h review of the records, the Court a*rees with the Court of Appeals. The dis#issal of Casio, et al. was indeed ille*al, havin* $een done without >ust cause and the o$servance of procedural due process. In Ala$an* Countr2 Clu$, Inc. v. National +a$or Relations Co##ission, '' the Court laid down the *rounds for which an e#plo2ee #a2 $e validl2 ter#inated, thus9 /nder the +a$or Code, an e#plo2ee #a2 $e validl2 ter#inated on the followin* *rounds9 "! >ust causes under Art. '('< '! authori@ed causes under Art. '(%< %! ter#ination due to disease under Art. '(), and )! ter#ination $2 the e#plo2ee or resi*nation under Art. '(7. Another cause for ter#ination is dis#issal fro# e#plo2#ent due to the enforce#ent of the union securit2 clause in the C,A. 4 4 4. E#phasis ours.! LABOR CASES: SUPREME STEEL- BPI | 20

I/nion securit2I is a *eneric ter#, which is applied to and co#prehends Iclosed shop,I Iunion shop,I I#aintenance of #e#$ership,I or an2 other for# of a*ree#ent which i#poses upon e#plo2ees the o$li*ation to ac3uire or retain union #e#$ership as a condition affectin* e#plo2#ent. There is union shop when all new re*ular e#plo2ees are re3uired to >oin the union within a certain period as a condition for their continued e#plo2#ent. There is #aintenance of #e#$ership shop when e#plo2ees, who are union #e#$ers as of the effective date of the a*ree#ent, or who thereafter $eco#e #e#$ers, #ust #aintain union #e#$ership as a condition for continued e#plo2#ent until the2 are pro#oted or transferred out of the $ar*ainin* unit or the a*ree#ent is ter#inated. A closed shop, on the other hand, #a2 $e defined as an enterprise in which, $2 a*ree#ent $etween the e#plo2er and his e#plo2ees or their representatives, no person #a2 $e e#plo2ed in an2 or certain a*reed depart#ents of the enterprise unless he or she is, $eco#es, and, for the duration of the a*ree#ent, re#ains a #e#$er in *ood standin* of a union entirel2 co#prised of or of which the e#plo2ees in interest are a part. '% /nion securit2 clauses are reco*ni@ed and e4plicitl2 allowed under Article ')( e! of the +a$or Code, which provides that9 Art. ')(. /nfair +a$or Practices of E#plo2ers. 4 4 4 4444 e! To discri#inate in re*ard to wa*es, hours of wor-, and other ter#s and conditions of e#plo2#ent in order to encoura*e or discoura*e #e#$ership in an2 la$or or*ani@ation. Nothin* in this Code or in an2 other law shall stop the parties fro# re3uirin* #e#$ership in a reco*ni@ed collective $ar*ainin* a*ent as a condition for e#plo2#ent, e4cept those e#plo2ees who are alread2 #e#$ers of another union at the ti#e of the si*nin* of the collective $ar*ainin* a*ree#ent. E#phasis supplied.! It is State polic2 to pro#ote unionis# to ena$le wor-ers to ne*otiate with #ana*e#ent on an even pla2in* field and with #ore persuasiveness than if the2 were to individuall2 and separatel2 $ar*ain with the e#plo2er. Cor this reason, the law has allowed stipulations for Iunion shopI and Iclosed shopI as #eans of encoura*in* wor-ers to >oin and support the union of their choice in the protection of their ri*hts and interest vis1T1vis the e#plo2er.') .oreover, a stipulation in the C,A authori@in* the dis#issal of e#plo2ees are of e3ual i#port as the statutor2 provisions on dis#issal under the +a$or Code, since Ia C,A is the law $etween the co#pan2 and the union and co#pliance therewith is #andated $2 the e4press polic2 to *ive protection to la$or.I '7 In ter#inatin* the e#plo2#ent of an e#plo2ee $2 enforcin* the union securit2 clause, the e#plo2er needs onl2 to deter#ine and prove that9 "! the union securit2 clause is applica$le< '! the union is re3uestin* for the enforce#ent of the union securit2 provision in the C,A< and %! there is sufficient evidence to support the decision of the union to e4pel the e#plo2ee fro# the union. These re3uisites constitute >ust cause for ter#inatin* an e#plo2ee $ased on the union securit2 provision of the C,A.'8 There is no 3uestion that in the present case, the C,A $etween A.C and I,.1+ocal %" included a #aintenance of #e#$ership and closed shop clause as can $e *leaned fro# Sections % and 8 of Article II. I,.1+ocal %", $2 written re3uest, can as- A.C to ter#inate the e#plo2#ent of the e#plo2eeFwor-er who failed to #aintain its *ood standin* as a union #e#$er. It is si#ilarl2 undisputed that I,.1+ocal %", throu*h Aa$iana, the I,. Re*ional Director for Disa2as and .indanao, twice re3uested A.C, in the letters dated .arch "& and "B, "BB', to ter#inate the e#plo2#ent of Casio, et al. as a necessar2 conse3uence of their e4pulsion fro# the union. It is the third re3uisite K that there is sufficient evidence to support the decision of I,.1+ocal %" to e4pel Casio, et al. K which appears to $e lac-in* in this case. The full te4t of the individual $ut identical ter#ination letters, '6 served $2 A.C on Casio, et al., is ver2 revealin*. The2 read9 To9 GE#plo2ee0s Na#eH Cro#9 +e*al Counsel Su$>ect9 Dis#issal /pon /nion Re3uest Thru C,A Closed Shop Provision The co#pan2 is in receipt of two letters dated .arch "&, "BB' and .arch "B, "BB' respectivel2 fro# the union at the .ill in +apulapu de#andin* the ter#ination of 2our e#plo2#ent pursuant to the closed shop provision of our e4istin* Collective ,ar*ainin* A*ree#ent. It appears fro# the attached resolutions that 2ou have $een e4pelled fro# union #e#$ership and has thus ceased to $eco#e a #e#$er in *ood standin*. The resolutions are si*ned $2 the sa#e officers who e4ecuted and si*ned our e4istin* C,A, copies of the letters and resolutions are enclosed hereto for 2our reference. The C,A in Article II provides the followin*9

Section %. .AINTENANCE OC .E.,ERSEIP K All e#plo2eesFwor-ers e#plo2ed $2 the Co#pan2 with the e4ception of those who are specificall2 e4cluded $2 law and $2 the ter#s of this A*ree#ent #ust $e #e#$ers in *ood standin* of the /nion within thirt2 %&! da2s upon the si*nin* of this a*ree#ent and shall #aintain such #e#$ership in *ood standin* thereof as a condition of their e#plo2#ent or continued e#plo2#ent. Section 8. The Co#pan2, upon written re3uest of the /nion, shall ter#inate the services of an2 e#plo2eeFwor-er who fails to fulfill the conditions set forth in Sections % and ) thereof, su$>ect however, to the provisions of the +a$or +aws of the Philippines and their I#ple#entin* Rules and Re*ulations. The /nion shall a$solve the Co#pan2 fro# an2 and all lia$ilities, pecuniar2 or otherwise, and responsi$ilities to an2 e#plo2ee or wor-er who is dis#issed or ter#inated in pursuant thereof. The provisions of the C,A are clear enou*h. The ter#ination of e#plo2#ent on the $asis of the closed shop provision of the C,A is well reco*ni@ed in law and in >urisprudence. There is no valid *round to refuse to ter#inate. On the other hand as pointed out in the union0s stron*l2 de#andin* letter dated .arch "B, "BB', the co#pan2 could $e sued for unfair la$or practice. ?hile we would have wanted not to acco##odate the union0s re3uest, we are left with no other option. The ter#s of the C,A should $e respected. To refuse to enforce the C,A would result in the $rea-down of industrial peace and the end of har#onious relations $etween the union and #ana*e#ent. The co#pan2 would face the collective an*er and en#it2 of its e#plo2ees who are union #e#$ers. In the li*ht of the union0s ver2 insistent de#and, ver$al and in writin* and to avoid the union accusation of Icoddlin*I 2ou, and considerin* the e4plicitl2 #andator2 lan*ua*e of the closed shop provision of the C,A, the co#pan2 is constrained to ter#inate 2our e#plo2#ent, to *ive 2ou a#ple ti#e to loo- and find another e#plo2#ent, andFor e4ert efforts to $eco#e a*ain a #e#$er of *ood standin* of 2our union, effective April '), "BB'. In the #eanti#e, to prevent serious dan*er to the life and propert2 of the co#pan2 and of its e#plo2ees, we are placin* 2ou under preventive suspension $e*innin* toda2. It is apparent fro# the afore3uoted letter that A.C ter#inated the e#plo2#ent of Casio, et al. rel2in* upon the Resolution dated Ce$ruar2 'B, "BB' of Pino, et al. e4pellin* Casio, et al. fro# I,.1+ocal %"< Aa$iana0s +etters dated .arch "& and "B, "BB' de#andin* that A.C ter#inate the e#plo2#ent of Casio, et al. on the $asis of the closed shop clause in the C,A< and the threat of $ein* sued $2 I,.1 +ocal %" for unfair la$or practice. The letter #ade no #ention at all of the evidence supportin* the decision of I,.1+ocal %" to e4pel Casio, et al. fro# the union. A.C never alle*ed nor atte#pted to prove that the co#pan2 actuall2 loo-ed into the evidence of I,.1+ocal %" for e4pellin* Casio, et al. and #ade a deter#ination on the sufficienc2 thereof. ?ithout such a deter#ination, A.C cannot clai# that it had ter#inated the e#plo2#ent of Casio, et al. for >ust cause. The failure of A.C to #a-e a deter#ination of the sufficienc2 of evidence supportin* the decision of I,.1+ocal %" to e4pel Casio, et al. is a direct conse3uence of the non1o$servance $2 A.C of procedural due process in the dis#issal of e#plo2ees. As a defense, A.C contends that as an e#plo2er, its onl2 dut2 was to ascertain that I,.1+ocal %" accorded Casio, et al. due process< and, it is the findin* of the co#pan2 that I,.1+ocal %" did *ive Casio, et al. the opportunit2 to answer the char*es a*ainst the#, $ut the2 refused to avail the#selves of such opportunit2. This ar*u#ent is without $asis. The Court has stressed ti#e and a*ain that alle*ations #ust $e proven $2 sufficient evidence $ecause #ere alle*ation is definitel2 not evidence.'( Once #ore, in Areat Southern .ariti#e Services Corporation. v. Acu=a,'B the Court declared9 Ti#e and a*ain we have ruled that in ille*al dis#issal cases li-e the present one, the onus of provin* that the e#plo2ee was not dis#issed or if dis#issed, that the dis#issal was not ille*al, rests on the e#plo2er and failure to dischar*e the sa#e would #ean that the dis#issal is not >ustified and therefore ille*al. Thus, petitioners #ust not onl2 rel2 on the wea-ness of respondents0 evidence $ut #ust stand on the #erits of their own defense. A part2 alle*in* a critical fact #ust support his alle*ation with su$stantial evidence for an2 decision $ased on unsu$stantiated alle*ation cannot stand as it will offend due process. 4 4 4. E#phasis supplied.! The records of this case are a$solutel2 $ereft of an2 supportin* evidence to su$stantiate the $are alle*ation of A.C that Casio, et al. were accorded due process $2 I,.1+ocal %". There is nothin* on record that would indicate that I,.1+ocal %" actuall2 notified Casio, et al. of the char*es a*ainst the# or that the2 were *iven the chance to e4plain their side. All that was stated in the I,.1+ocal %" LABOR CASES: SUPREME STEEL- BPI | 21

Resolution dated Ce$ruar2 'B, "BB', e4pellin* Casio, et al. fro# the union, was that Ia cop2 of the said letter co#plaint Gdated Ce$ruar2 '), "BB'H was dropped or left in front of E. Casio.I %& It was not esta$lished that said letter1co#plaint char*in* Casio, et al. with acts ini#ical to the interest of the union was properl2 served upon Casio, that Casio willfull2 refused to accept the said letter1notice, or that Casio had the authorit2 to receive the sa#e letter1notice on $ehalf of the other e#plo2ees si#ilarl2 accused. It0s worth2 to note that Casio, et al. were e4pelled onl2 five da2s after the issuance of the letter1co#plaint a*ainst the#. The Court cannot find proof on record when the three1da2 period, within which Casio, et al. was supposed to file their answer or counter1affidavits, started to run and had e4pired. The Court is li-ewise unconvinced that the said three1da2 period was sufficient for Casio, et al. to prepare their defenses and evidence to refute the serious char*es a*ainst the#. Contrar2 to the position of A.C, the acts of Pino, et al. as officers and $oard #e#$ers of I,.1+ocal %", in e4pellin* Casio, et al. fro# the union, do not en>o2 the presu#ption of re*ularit2 in the perfor#ance of official duties, $ecause the presu#ption applies onl2 to pu$lic officers fro# the hi*hest to the lowest in the service of the Aovern#ent, depart#ents, $ureaus, offices, andFor its political su$divisions.%" .ore i#portantl2, in +i$ert2 Cotton .ills ?or-ers /nion v. +i$ert2 Cotton .ills, Inc., %' the Court issued the followin* re#inder to e#plo2ers9 The power to dis#iss is a nor#al prero*ative of the e#plo2er. Eowever, this is not without li#itations. The e#plo2er is $ound to e4ercise caution in ter#inatin* the services of his e#plo2ees especiall2 so when it is #ade upon the re3uest of a la$or union pursuant to the Collective ,ar*ainin* A*ree#ent. 4 4 4. Dis#issals #ust not $e ar$itrar2 and capricious. Due process #ust $e o$served in dis#issin* an e#plo2ee $ecause it affects not onl2 his position $ut also his #eans of livelihood. E#plo2ers should therefore respect and protect the ri*hts of their e#plo2ees, which include the ri*ht to la$or. 4 4 4.1avvphi1 The Court reiterated in .ala2an* Sa#ahan n* #*a .an**a*awa sa .. Areenfield v. Ra#os%% that9 ?hile respondent co#pan2 #a2 validl2 dis#iss the e#plo2ees e4pelled $2 the union for dislo2alt2 under the union securit2 clause of the collective $ar*ainin* a*ree#ent upon the reco##endation $2 the union, this dis#issal should not $e done hastil2 and su##aril2 there$2 erodin* the e#plo2ees0 ri*ht to due process, self1or*ani@ation and securit2 of tenure. The enforce#ent of union securit2 clauses is authori@ed $2 law provided such enforce#ent is not characteri@ed $2 ar$itrariness, and alwa2s with due process. Even on the assu#ption that the federation had valid *rounds to e4pel the union officers, due process re3uires that these union officers $e accorded a separate hearin* $2 respondent co#pan2. E#phases supplied.! The twin re3uire#ents of notice and hearin* constitute the essential ele#ents of procedural due process. The law re3uires the e#plo2er to furnish the e#plo2ee sou*ht to $e dis#issed with two written notices $efore ter#ination of e#plo2#ent can $e le*all2 effected9 "! a written notice apprisin* the e#plo2ee of the particular acts or o#issions for which his dis#issal is sou*ht in order to afford hi# an opportunit2 to $e heard and to defend hi#self with the assistance of counsel, if he desires, and '! a su$se3uent notice infor#in* the e#plo2ee of the e#plo2er0s decision to dis#iss hi#. This procedure is #andator2 and its a$sence taints the dis#issal with ille*alit2. %) Irrefra*a$l2, A.C cannot dispense with the re3uire#ents of notice and hearin* $efore dis#issin* Casio, et al. even when said dis#issal is pursuant to the closed shop provision in the C,A. The ri*hts of an e#plo2ee to $e infor#ed of the char*es a*ainst hi# and to reasona$le opportunit2 to present his side in a controvers2 with either the co#pan2 or his own union are not wiped awa2 $2 a union securit2 clause or a union shop clause in a collective $ar*ainin* a*ree#ent. An e#plo2ee is entitled to $e protected not onl2 fro# a co#pan2 which disre*ards his ri*hts $ut also fro# his own union the leadership of which could 2ield to the te#ptation of swift and ar$itrar2 e4pulsion fro# #e#$ership and hence dis#issal fro# his >o$.%7 In the case at $ar, Casio, et al. did not receive an2 other co##unication fro# A.C, e4cept the written notice of ter#ination dated .arch '), "BB'. A.C, $2 its own ad#ission, did not conduct a separate and independent investi*ation to deter#ine the sufficienc2 of the evidence supportin* the e4pulsion of Casio, et al. $2 I,P1+ocal %". It strai*ht awa2 acceded to the de#and of I,P1+ocal %" to dis#iss Casio, et al. The ver2 sa#e circu#stances too- place in +i$ert2 Cotton .ills, wherein the Court held that the e#plo2er1co#pan2 acted in $ad faith in dis#issin* its wor-ers without *ivin* said wor-ers an opportunit2 to present their side in the controvers2 with their union, thus9

?hile respondent co#pan2, under the .aintenance of .e#$ership provision of the Collective ,ar*ainin* A*ree#ent, is $ound to dis#iss an2 e#plo2ee e4pelled $2 PAC+/ for dislo2alt2, upon its written re3uest, this underta-in* should not $e done hastil2 and su##aril2. The co#pan2 acted in $ad faith in dis#issin* petitioner wor-ers without *ivin* the# the $enefit of a hearin*. It did not even $other to in3uire fro# the wor-ers concerned and fro# PAC+/ itself a$out the cause of the e4pulsion of the petitioner wor-ers. Instead, the co#pan2 i##ediatel2 dis#issed the wor-ers on .a2 %&, "B8) after its receipt of the re3uest of PAC+/ on .a2 'B, "B8) K in a span of onl2 one da2 K statin* that it had no alternative $ut to co#pl2 with its o$li*ation under the Securit2 A*ree#ent in the Collective ,ar*ainin* A*ree#ent, there$2 disre*ardin* the ri*ht of the wor-ers to due process, self1or*ani@ation and securit2 of tenure.%8 E#phasis ours.! In su#, the Court finds that A.C ille*all2 dis#issed Casio, et al. $ecause not onl2 did A.C fail to #a-e a deter#ination of the sufficienc2 of evidence to support the decision of I,.1+ocal %" to e4pel Casio, et al., $ut also to accord the e4pelled union #e#$ers procedural due process, i.e., notice and hearin*, prior to the ter#ination of their e#plo2#ent Conse3uentl2, A.C cannot insist that it has no lia$ilit2 for the pa2#ent of $ac-wa*es and da#a*es to Casio, et al., and that the lia$ilit2 for such pa2#ent should fall onl2 upon Pino, et al., as the I,P1+ocal %" officers and $oard #e#$ers who e4pelled Casio, et al. A.C co#pletel2 #issed the point that the e4pulsion of Casio, et al. $2 I,P1+ocal %" and the ter#ination of e#plo2#ent of the sa#e e#plo2ees $2 A.C, althou*h related, are two separate and distinct acts. Despite a closed shop provision in the C,A and the e4pulsion of Casio, et al. fro# I,P1+ocal %", law and >urisprudence i#poses upon A.C the o$li*ation to accord Casio, et al. su$stantive and procedural due process $efore co#pl2in* with the de#and of I,P1+ocal %" to dis#iss the e4pelled union #e#$ers fro# service. The failure of A.C to carr2 out this o$li*ation #a-es it lia$le for ille*al dis#issal of Casio, et al. In .ala2an* Sa#ahan n* #*a .an**a*awa sa .. Areenfield,%6 the Court held that notwithstandin* the fact that the dis#issal was at the instance of the federation and that the federation undertoo- to hold the co#pan2 free fro# an2 lia$ilit2 resultin* fro# the dis#issal of several e#plo2ees, the co#pan2 #a2 still $e held lia$le if it was re#iss in its dut2 to accord the would1$e dis#issed e#plo2ees their ri*ht to $e heard on the #atter. An e#plo2ee who is ille*all2 dis#issed is entitled to the twin reliefs of full $ac-wa*es and reinstate#ent. If reinstate#ent is not via$le, separation pa2 is awarded to the e#plo2ee. In awardin* separation pa2 to an ille*all2 dis#issed e#plo2ee, in lieu of reinstate#ent, the a#ount to $e awarded shall $e e3uivalent to one #onth salar2 for ever2 2ear of service. /nder Repu$lic Act No. 86"7, e#plo2ees who are ille*all2 dis#issed are entitled to full $ac-wa*es, inclusive of allowances and other $enefits or their #onetar2 e3uivalent, co#puted fro# the ti#e their actual co#pensation was withheld fro# the# up to the ti#e of their actual reinstate#ent $ut if reinstate#ent is no lon*er possi$le, the $ac-wa*es shall $e co#puted fro# the ti#e of their ille*al ter#ination up to the finalit2 of the decision. Thus, Casio, et al. are entitled to $ac-wa*es and separation pa2 considerin* that reinstate#ent is no lon*er possi$le $ecause the positions the2 previousl2 occupied are no lon*er e4istin*, as declared $2 A.C.%( Casio, et al., havin* $een co#pelled to liti*ate in order to see- redress for their ille*al dis#issal, are entitled to the award of attorne20s fees e3uivalent to "&P of the total #onetar2 award.%B W#ERE,ORE, the instant petition is here$2 DENIED. The assailed decision of the Court of Appeals dated .arch %&, '&&" in CA1A.R. SP No. )&'(& is A,,IRMED.

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G.R. No. 160828 A(;(13 /, 2010 PICOP RESOURCES, INCORPORATED PRI", Petitioner, vs. ANACLETO L. TA<ECA, GEREMIAS S. TATO, &AIME N. CAMPOS, MARTINIANO A. MAGA+ON, &OSEP# .. .ALGOA, MANUEL G. A.UCA+, MOISES M. AL.ARAN, MARGARITO G. ALICANTE, &ERR+ ROMEO T. A:ILA, LOREN0O D. CANON, RAUL P. DUERO, DANILO +. ILAN, MANUEL M. MATURAN, &R., LUISITO R. POPERA, CLEMENTINO C. =UIMAN, RO.ERTO =. SILOT, C#ARLITO D. SINDA+, REM.ERT .. SU0ON ALLAN &. TRIMIDAL, a'9 NAMAPRI!SP,L, Respondents. DECISION PERALTA, J.: This is a Petition for Review on Certiorari under Rule )7 of the Rules of Court see-in* the reversal of the Decision" dated 5ul2 '7, '&&% and Resolution' dated Octo$er '%, '&&% of the Court of Appeals in CA1A.R. SP No. 6"68&, settin* aside the Resolutions dated Octo$er (, '&&" % and April 'B, '&&') of the National +a$or Relations Co##ission in N+RC CA No. .1&&8%&B1'&&" and reinstatin* the Decision7 dated .arch "8, '&&" of the +a$or Ar$iter. The facts, as culled fro# the records, are as follows9 On Ce$ruar2 "%, '&&", respondents Anacleto Ta=eca, +oreto /riarte, 5oseph ,al*oa, 5ai#e Ca#pos, Aere#ias Tato, .artiniano .a*a2on, .anuel A$uca2 and fourteen ")! others filed a Co#plaint for unfair la$or practice, ille*al dis#issal and #one2 clai#s a*ainst petitioner PICOP Resources, Incorporated PRI!, ?ilfredo Cuentes in his capacit' as #RI(s )ice #resident*Resident +anager!, Att2. Ro#ero ,oniel in his capacit' as #RI(s +anager o! Legal*La"or,, Southern Philippines Cederation of +a$or SPC+!, Att2. ?il$ur T. Cuentes in his capacit' as Secretar' -eneral o! S#.L !, Pascasio Tru*illo in his capacit' as Local #resident o! Nag/ahiusang +a u uo sa #IC0# Resources, Inc.1 S#.L 2N3+3#RI1S#.L4, and Att2. Proculo Cuentes, 5r.8 5in his capacit' as National #resident o! S#.L,. Respondents were re*ular ran-1and1file e#plo2ees of PRI and "ona !ide #e#$ers of Nag/ahiusang +a u uo sa PRI Southern Philippines Cederation of +a$or NA.APRI1SPC+!, which is the collective $ar*ainin* a*ent for the ran-1and1file e#plo2ees of petitioner PRI. PRI has a collective $ar*ainin* a*ree#ent C,A! with NA.APRI1SPC+ for a period of five 7! 2ears fro# .a2 '', "BB7 until .a2 '', '&&&. The C,A contained the followin* union securit2 provisions9 Ar3>c?- II! U'>o' S-c(r>3) a'9 Ch-c@!OAA Section 8. +aintenance o! e "ership. 8." 3ll employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this AGREEMEN shall! as a "on#ition of "ontinue# employment by the $OM%AN&! maintain their membership in the UNION in goo# stan#ing #uring the effe"ti'ity of this AGREEMEN . 8.' An2 e#plo2ee who #a2 hereinafter $e e#plo2ed to occup2 a position covered $2 the $ar*ainin* unit shall $e advised $2 the CO.PAN; that the2 are re3uired to file an application for #e#$ership with the /NION within thirt2 %&! da2s fro# the date his appoint#ent shall have $een #ade re*ular. 8.% he $OM%AN&! upon the written re(uest of the UNION an# after "omplian"e with the re(uirements of the New )abor $o#e! shall gi'e noti"e of termination of ser'i"es of any employee who shall fail to fulfill the "on#ition pro'i#e# in *e"tion +., an# +.- of this Arti"le! $ut it assu#es no o$li*ation to dischar*e an2 e#plo2ee if it has reasona$le *rounds to $elieve either that #e#$ership in the /NION was not availa$le to the e#plo2ee on the sa#e ter#s and conditions *enerall2 applica$le to other #e#$ers, or that #e#$ership was denied or ter#inated for reasons other than voluntar2 resi*nation or non1pa2#ent of re*ular union dues. Separation under the Section is understood to $e for cause, conse3uentl2, the dis#issed e#plo2ee is not entitled to separation $enefits provided under the New +a$or Code and in this AAREE.ENT.I6

On .a2 "8, '&&&, Att2. Proculo P. Cuentes Att2. Cuentes! sent a letter to the #ana*e#ent of PRI de#andin* the ter#ination of e#plo2ees who alle*edl2 ca#pai*ned for, supported and si*ned the Petition for Certification Election of the Cederation of Cree ?or-ers /nion CC?! durin* the effectivit2 of the C,A. NA.APRI1SPC+ considered said act of ca#pai*nin* for and si*nin* the petition for certification election of CC? as an act of dislo2alt2 and a valid $asis for ter#ination for a cause in accordance with its Constitution and ,21+aws, and the ter#s and conditions of the C,A, specificall2 Article II, Sections 8." and 8.' on /nion Securit2 Clause. In a letter dated .a2 '%, '&&&, .r. Pascasio Tru*illo re3uested the #ana*e#ent of PRI to investi*ate those union #e#$ers who si*ned the Petition for Certification Election of CC? durin* the e4istence of their C,A. NA.APRI1SPC+, li-ewise, furnished PRI with #achine cop2 of the authori@ation letters dated .arch "B, '& and '", '&&&, which contained the na#es and si*natures of e#plo2ees. Actin* on the .a2 "8 and .a2 '%, '&&& letters of the NA.APRI1SPC+, Att2. Ro#ero A. ,oniel issued a #e#orandu# addressed to the concerned e#plo2ees to e4plain in writin* within 6' hours wh2 their e#plo2#ent should not $e ter#inated due to acts of dislo2alt2 as alle*ed $2 their /nion. ?ithin the period fro# .a2 '8 to 5une ', '&&&, a nu#$er of e#plo2ees who were served Ie4planation #e#orandu#I su$#itted their e4planation, while so#e did not. In a letter dated 5une ', '&&&, Att2. ,oniel endorsed the e4planation letters of the e#plo2ees to Att2. Cuentes for evaluation and final disposition in accordance with the C,A. After evaluation, in a letter dated 5ul2 "', '&&&, Att2. Cuentes advised the #ana*e#ent of PRI that the /nion found the #e#$erOs e4planations to $e unsatisfactor2. Ee reiterated the de#and for ter#ination, $ut onl2 of )8 #e#$er1e#plo2ees, includin* respondents. On Octo$er "8, '&&&, PRI served notices of ter#ination for causes to the %" out of the )8 e#plo2ees who# NA.APRI+1SPC+ sou*ht to $e ter#inated on the *round of Iacts of dislo2alt2I co##itted a*ainst it when respondents alle*edl2 supported and si*ned the Petition for Certification Election of CC? $efore the Ifreedo# periodI durin* the effectivit2 of the C,A. A Notice dated Octo$er '", '&&& was also served on the Depart#ent of +a$or and E#plo2#ent Office DO+E!, Cara*a Re*ion. Respondents then accused PRI of /nfair +a$or Practice punisha$le under Article ')( a!, $!, c!, d! and e! of the +a$or Code, while Att2. Cuentes and ?il$ur T. Cuentes and Pascasio Tru>illo were accused of violatin* Article ')( a! and $! of the +a$or Code. Respondents alle*ed that none of the# ever withdrew their #e#$ership fro# NA.APRI1SPC+ or su$#itted to PRI an2 union dues and chec-1off disauthori@ations a*ainst NA.APRI1SPC+. The2 clai#ed that the2 continue to re#ain on record as "ona !ide #e#$ers of NA.APRI1SPC+. The2 pointed out that a patent #anifestation of one0s dislo2alt2 would have $een the e4plicit resi*nation or withdrawal of #e#$ership fro# the /nion acco#panied $2 an advice to #ana*e#ent to discontinue union dues and chec-1off deductions. The2 insisted that #ere affi4ation of si*nature on such authori@ation to file a petition for certification election was not per se an act of dislo2alt2. The2 clai#ed that while it #a2 $e true that the2 si*ned the said authori@ation $efore the start of the freedo# period, the petition of CC? was onl2 filed with the DO+E on .a2 "(, '&&&, or 7( da2s after the start of the freedo# period. Respondents #aintained that their acts of si*nin* the authori@ation si*nif2in* support to the filin* of a Petition for Certification Election of CC? was #erel2 pro#pted $2 their desire to have a certification election a#on* the ran-1and1file e#plo2ees of PRI with hopes of a C,A ne*otiation in due ti#e< and not to cause the downfall of NA.APRI1SPC+. Curther#ore, respondents contended that there was lac- of procedural due process. ,oth the letter dated .a2 "8, '&&& of Att2. Cuentes and the follow1up letter dated .a2 '%, '&&& of Tru>illo addressed to PRI did not #ention their na#es. Respondents stressed that NA.APRI1SPC+ #erel2 re3uested PRI to investi*ate union #e#$ers who supported the Petition for Certification Election of CC?. Respondents clai#ed that the2 should have $een su##oned individuall2, confronted with the accusation and investi*ated accordin*l2 and fro# where the /nion #a2 $ase
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its findin*s of dislo2alt2 and, thereafter, reco##end to #ana*e#ent the ter#ination for causes.1avvphi1 Respondents, li-ewise, ar*ued that at the ti#e NA.APRI1SPC+ de#anded their ter#ination, it was no lon*er the $ar*ainin* representative of the ran-1and1file wor-ers of PRI, $ecause the C,A had alread2 e4pired on .a2 '', '&&&. Eence, there could $e no >ustification in PRI0s act of dis#issin* respondents due to acts of dislo2alt2. Respondents asserted that the act of PRI, ?ilfredo Cuentes and Att2. ,oniel in *ivin* in to the wishes of the /nion in dischar*in* the# on the *round of dislo2alt2 to the /nion a#ounted to interference with, restraint or coercion of respondents0 e4ercise of their ri*ht to self1or*ani@ation. The act indirectl2 re3uired petitioners to support and #aintain their #e#$ership with NA.APRI1 SPC+ as a condition for their continued e#plo2#ent. The acts of NA.APRI1SPC+, Att2. Cuentes and Tru>illo a#ounted to actual restraint and coercion of the petitioners in the e4ercise of their ri*hts to self1or*ani@ation and constituted acts of unfair la$or practice. In a Decision( dated .arch "8, '&&", the +a$or Ar$iter declared the respondents0 dis#issal to $e ille*al and ordered PRI to reinstate respondents to their for#er or e3uivalent positions without loss of seniorit2 ri*hts and to >ointl2 and solidaril2 pa2 their $ac-wa*es. The dispositive portion of which reads9 67ERE.0RE, pre ises considered, 8udg ent is here"' entered9 1. :eclaring co plainants; dis issal illegal< and =. 0rdering respondents #icop Resources Inc. 5#RI, and N3+3#RI1S#.L to reinstate co plainants to their !or er or equivalent positions without loss o! seniorit' rights and to 8ointl' and solidaril' pa' their "ac/wages in the total a ount o! #>=%,$$&.$% as shown in the said 3nne? @3@ plus da ages in the a ount o! #1%,%%%.%% each, or a total o! #=1%,%%%.%% and attorne';s !ees equivalent to 1%A o! the total onetar' award. S0 0R:ERE:.B PRI and NA.APRI1SPC+ appealed to the National +a$or Relations Co##ission N+RC!, which reversed the decision of the +a$or Ar$iter< thus, declarin* the dis#issal of respondents fro# e#plo2#ent as le*al. Respondents filed a #otion for reconsideration, $ut it was denied on April 'B, '&&" for lac- of #erit. /nsatisfied, respondents filed a petition for certiorari under Rule 87 $efore the Court of Appeals and sou*ht the nullification of the Resolution of the N+RC dated Octo$er (, '&&" which reversed the Decision dated .arch "8. '&&" of +a$or Ar$iter and the Resolution dated April 'B, '&&', which denied respondent0s #otion for reconsideration. On 5ul2 '7, '&&%, the Court of Appeals reversed and set aside the assailed Resolutions of the N+RC and reinstated the Decision dated .arch "8, '&&" of the +a$or Ar$iter. Thus, $efore this Court, PRI, as petitioner, raised the followin* issues9 I ?EETEER AN E:ISTINA CO++ECTIDE+; sic! ,ARAAININA AAREE.ENT C,A! CAN ,E AIDEN ITS C/++ CORCE AND ECCECT IN A++ ITS TER.S AND CONDITION INC+/DINA ITS /NION SEC/RIT; C+A/SE, EDEN ,E;OND TEE 71;EAR PERIOD ?EEN NO NE? C,A EAS ;ET ,EEN ENTERED INTO. II ?EETEER OR NOT AN EONEST ERROR IN TEE INTERPRETATION ANDFOR CONC+/SION OC +A? CA++ ?ITEIN TEE A.,IT OC TEE E:TRAORDINAR; RE.ED; OC CERTIORARI /NDER R/+E 87, REDISED R/+ES OC CO/RT."& ?e will first delve on the technical issue raised. PRI perceived a patent error in the #ode of appeal elected $2 respondents for the purpose of assailin* the decision of the N+RC. It clai#ed that assu#in* that the N+RC erred in its >ud*#ent on the le*al issues, its error, if an2, is not tanta#ount to a$use of discretion fallin* within the a#$it of Rule 87. Petitioner is #ista-en.

The power of the Court of Appeals to review N+RC decisions via Rule 87 or Petition for Certiorari has $een settled as earl2 as in our decision in St. +artin .uneral 7o e v. National La"or Relations Co ission."" This Court held that the proper vehicle for such review was a Special Civil Action for Certiorari under Rule 87 of the Rules of Court, and that this action should $e filed in the Court of Appeals in strict o$servance of the doctrine of the hierarch2 of courts. "' .oreover, it is alread2 settled that under Section B of Batas #a "ansa Blg. "'B, as a#ended $2 Repu$lic Act No. 6B&'G"&H An Act E4pandin* the 5urisdiction of the Court of Appeals, a#endin* for the purpose of Section Nine of ,atas Pa#$ansa ,l*. "'B as a#ended, -nown as the 5udiciar2 Reor*ani@ation Act of "B(&!, the Court of Appeals K pursuant to the e4ercise of its ori*inal >urisdiction over Petitions for Certiorari K is specificall2 *iven the power to pass upon the evidence, if and when necessar2, to resolve factual issues. "% ?e now co#e to the #ain issue of whether there was >ust cause to ter#inate the e#plo2#ent of respondents. PRI ar*ued that the dis#issal of the respondents was valid and le*al. It clai#ed to have acted in *ood faith at the instance of the incu#$ent union pursuant to the /nion Securit2 Clause of the C,A. Citin* Article '7% of the +a$or Code, ") PRI contends that as parties to the C,A, the2 are en>oined to -eep the status quo and continue in full force and effect the ter#s and conditions of the e4istin* C,A durin* the 8&1da2 period andFor until a new a*ree#ent is reached $2 the parties. PetitionerOs ar*u#ent is untena$le. I/nion securit2I is a *eneric ter#, which is applied to and co#prehends Iclosed shop,I Iunion shop,I I#aintenance of #e#$ership,I or an2 other for# of a*ree#ent which i#poses upon e#plo2ees the o$li*ation to ac3uire or retain union #e#$ership as a condition affectin* e#plo2#ent. There is union shop when all new re*ular e#plo2ees are re3uired to >oin the union within a certain period as a condition for their continued e#plo2#ent. There is #aintenance of #e#$ership shop when e#plo2ees, who are union #e#$ers as of the effective date of the a*ree#ent, or who thereafter $eco#e #e#$ers, #ust #aintain union #e#$ership as a condition for continued e#plo2#ent until the2 are pro#oted or transferred out of the $ar*ainin* unit, or the a*ree#ent is ter#inated. A closed shop, on the other hand, #a2 $e defined as an enterprise in which, $2 a*ree#ent $etween the e#plo2er and his e#plo2ees or their representatives, no person #a2 $e e#plo2ed in an2 or certain a*reed depart#ents of the enterprise unless he or she is, $eco#es, and, for the duration of the a*ree#ent, re#ains a #e#$er in *ood standin* of a union entirel2 co#prised of or of which the e#plo2ees in interest are a part. "7 Eowever, in ter#inatin* the e#plo2#ent of an e#plo2ee $2 enforcin* the union securit2 clause, the e#plo2er needs to deter#ine and prove that9 "! the union securit2 clause is applica$le< '! the union is re3uestin* for the enforce#ent of the union securit2 provision in the C,A< and %! there is sufficient evidence to support the decision of the union to e4pel the e#plo2ee fro# the union. These re3uisites constitute >ust cause for ter#inatin* an e#plo2ee $ased on the union securit2 provision of the C,A."8 As to the first re3uisite, there is no 3uestion that the C,A $etween PRI and respondents included a union securit2 clause, specificall2, a #aintenance of #e#$ership as stipulated in Sections 8 of Article II, /nion Securit2 and Chec-1Off. Collowin* the sa#e provision, PRI, upon written re3uest fro# the /nion, can indeed ter#inate the e#plo2#ent of the e#plo2ee who failed to #aintain its *ood standin* as a union #e#$er. Secondl2, it is li-ewise undisputed that NA.APRI1SPC+, in two '! occasions de#anded fro# PRI, in their letters dated .a2 "8 and '%, '&&&, to ter#inate the e#plo2#ent of respondents due to their acts of dislo2alt2 to the /nion. Eowever, as to the third re3uisite, we find that there is no sufficient evidence to support the decision of PRI to ter#inate the e#plo2#ent of the respondents. PRI alle*ed that respondents were ter#inated fro# e#plo2#ent $ased on the alle*ed acts of dislo2alt2 the2 co##itted when the2 si*ned an authori@ation for the Cederation of Cree ?or-ers CC?! to file a Petition for Certification Election a#on* all ran-1and1file e#plo2ees of PRI. It
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contends that the acts of respondents are a violation of the /nion Securit2 Clause, as provided in their Collective ,ar*ainin* A*ree#ent. ?e are unconvinced. ?e are in consonance with the Court of Appeals when it held that the #ere si*nin* of the authori@ation in support of the Petition for Certification Election of CC? on .arch "B, '& and '", or $efore the Ifreedo# period,I is not sufficient *round to ter#inate the e#plo2#ent of respondents inas#uch as the petition itself was actuall2 filed durin* the freedo# period. Nothin* in the records would show that respondents failed to #aintain their #e#$ership in *ood standin* in the /nion. Respondents did not resi*n or withdraw their #e#$ership fro# the /nion to which the2 $elon*. Respondents continued to pa2 their union dues and never >oined the CC?. Si*nificantl2, petitionerOs act of dis#issin* respondents ste##ed fro# the latterOs act of si*nin* an authori@ation letter to file a petition for certification election as the2 si*ned it outside the freedo# period. Eowever, we are constrained to $elieve that an Iauthori@ation letter to file a petition for certification electionI is different fro# an actual IPetition for Certification Election.I +i-ewise, as per records, it was clear that the actual Petition for Certification Election of CC? was filed onl2 on .a2 "(, '&&&. "6 Thus, it was within the a#$it of the freedo# period which co##enced fro# .arch '", '&&& until .a2 '", '&&&. Strictl2 spea-in*, what is prohi$ited is the filin* of a petition for certification election outside the 8&1da2 freedo# period. "( This is not the situation in this case. If at all, the si*nin* of the authori@ation to file a certification election was #erel2 preparator2 to the filin* of the petition for certification election, or an e4ercise of respondents0 ri*ht to self1or*ani@ation. .oreover, PRI anchored their decision to ter#inate respondents0 e#plo2#ent on Article '7% of the +a$or Code which states that Iit shall be the #uty of both parties to .eep the status (uo an# to "ontinue in full for"e an# effe"t the terms an# "on#itions of the e/isting agreement #uring the +01#ay perio# an#2or until a new agreement is rea"he# by the parties.3 It clai#ed that the2 are still $ound $2 the /nion Securit2 Clause of the C,A even after the e4piration of the C,A< hence, the need to ter#inate the e#plo2#ent of respondents. PetitionerOs reliance on Article '7% is #isplaced. The provision of Article '78 of the +a$or Code is particularl2 enli*htenin*. It reads9 Article '78. Representation issue in organiCed esta"lish ents. 1 In or*ani@ed esta$lish#ents, when a verified petition 3uestionin* the #a>orit2 status of the incu#$ent $ar*ainin* a*ent is filed $efore the Depart#ent of +a$or and E#plo2#ent within the si4t21da2 period $efore the e4piration of a collective $ar*ainin* a*ree#ent, the .ed1Ar$iter shall auto#aticall2 order an election $2 secret $allot when the verified petition is supported $2 the written consent of at least twent21five percent '7P! of all the e#plo2ees in the $ar*ainin* unit to ascertain the will of the e#plo2ees in the appropriate $ar*ainin* unit. To have a valid election, at least a #a>orit2 of all eli*i$le voters in the unit #ust have cast their votes. The la$or union receivin* the #a>orit2 of the valid votes cast shall $e certified as the e4clusive $ar*ainin* a*ent of all the wor-ers in the unit. ?hen an election which provides for three or #ore choices results in no choice receivin* a #a>orit2 of the valid votes cast, a run1off election shall $e conducted $etween the la$or unions receivin* the two hi*hest nu#$er of votes9 #rovided, That the total nu#$er of votes for all contendin* unions is at least fift2 per cent 7&P! of the nu#$er of votes cast. At the e/piration of the free#om perio#! the employer shall "ontinue to re"ogni4e the ma5ority status of the in"umbent bargaining agent where no petition for "ertifi"ation ele"tion is file#."B Appl2in* the sa#e provision, it can $e said that while it is incu#$ent for the e#plo2er to continue to reco*ni@e the #a>orit2 status of the incu#$ent $ar*ainin* a*ent even after the e4piration of the freedo# period, the2 could onl2 do so when no petition for certification election was filed. The reason is, with a pendin* petition for certification, an2 such a*ree#ent entered into $2 #ana*e#ent with a la$or or*ani@ation is frau*ht with the ris- that such a la$or union #a2 not $e chosen thereafter as the collective $ar*ainin* representative. '& The provision for status quo is conditioned on the fact that no certification election was filed durin* the freedo# period. An2 other view would render nu*ator2 the clear statutor2 polic2 to favor certification election as the

#eans of ascertainin* the true e4pression of the will of the wor-ers as to which la$or or*ani@ation would represent the#.'" In the instant case, four )! petitions were filed as earl2 as .a2 "', '&&&. In fact, a petition for certification election was alread2 ordered $2 the .ed1Ar$iter of DO+E Cara*a Re*ion on Au*ust '%, '&&&.'' Therefore, followin* Article '78, at the e4piration of the freedo# period, PRIOs o$li*ation to reco*ni@e NA.APRI1SPC+ as the incu#$ent $ar*ainin* a*ent does not hold true when petitions for certification election were filed, as in this case. .oreover, the last sentence of Article '7% which provides for auto#atic renewal pertains onl2 to the econo#ic provisions of the C,A, and does not include representational aspect of the C,A. An e4istin* C,A cannot constitute a $ar to a filin* of a petition for certification election. ?hen there is a representational issue, the status quo provision in so far as the need to await the creation of a new a*ree#ent will not appl2. Otherwise, it will create an a$surd situation where the union #e#$ers will $e forced to #aintain #e#$ership $2 virtue of the union securit2 clause e4istin* under the C,A and, thereafter, support another union when filin* a petition for certification election. If we appl2 it, there will alwa2s $e an issue of dislo2alt2 whenever the e#plo2ees e4ercise their ri*ht to self1or*ani@ation. The holdin* of a certification election is a statutor2 polic2 that should not $e circu#vented,'% or co#pro#ised.1avvphi Ti#e and a*ain, we have ruled that we adhere to the polic2 of enhancin* the welfare of the wor-ers. Their freedo# to choose who should $e their $ar*ainin* representative is of para#ount i#portance. The fact that there alread2 e4ists a $ar*ainin* representative in the unit concerned is of no #o#ent as lon* as the petition for certification election was filed within the freedo# period. ?hat is i#perative is that $2 such a petition for certification election the e#plo2ees are *iven the opportunit2 to #a-e -nown of who shall have the ri*ht to represent the# thereafter. Not onl2 so#e, $ut all of the# should have the ri*ht to do so. ?hat is e3uall2 i#portant is that ever2one $e *iven a de#ocratic space in the $ar*ainin* unit concerned. ') ?e will e#phasi@e anew that the power to dis#iss is a nor#al prero*ative of the e#plo2er. This, however, is not without li#itations. The e#plo2er is $ound to e4ercise caution in ter#inatin* the services of his e#plo2ees especiall2 so when it is #ade upon the re3uest of a la$or union pursuant to the Collective ,ar*ainin* A*ree#ent. Dis#issals #ust not $e ar$itrar2 and capricious. Due process #ust $e o$served in dis#issin* an e#plo2ee, $ecause it affects not onl2 his position $ut also his #eans of livelihood. E#plo2ers should, therefore, respect and protect the ri*hts of their e#plo2ees, which include the ri*ht to la$or. '7 An e#plo2ee who is ille*all2 dis#issed is entitled to the twin reliefs of full $ac-wa*es and reinstate#ent. If reinstate#ent is not via$le, separation pa2 is awarded to the e#plo2ee. In awardin* separation pa2 to an ille*all2 dis#issed e#plo2ee, in lieu of reinstate#ent, the a#ount to $e awarded shall $e e3uivalent to one #onth salar2 for ever2 2ear of service. /nder Repu$lic Act No. 86"7, e#plo2ees who are ille*all2 dis#issed are entitled to full $ac-wa*es, inclusive of allowances and other $enefits, or their #onetar2 e3uivalent, co#puted fro# the ti#e their actual co#pensation was withheld fro# the# up to the ti#e of their actual reinstate#ent. ,ut if reinstate#ent is no lon*er possi$le, the $ac-wa*es shall $e co#puted fro# the ti#e of their ille*al ter#ination up to the finalit2 of the decision. .oreover, respondents, havin* $een co#pelled to liti*ate in order to see- redress for their ille*al dis#issal, are entitled to the award of attorne20s fees e3uivalent to "&P of the total #onetar2 award. '8 W#ERE,ORE, the petition is DENIED. The Decision dated 5ul2 '7, '&&% and the Resolution dated Octo$er '%, '&&% of the Court of Appeals in CA1A.R. SP No. 6"68&, which set aside the Resolutions dated Octo$er (, '&&" and April 'B, '&&' of the National +a$or Relations Co##ission in N+RC CA No. .1&&8%&B1'&&", are ACCIR.ED accordin*l2. Respondents are here$2 awarded full $ac-wa*es and other allowances, without 3ualifications and di#inutions, co#puted fro# the ti#e the2 were ille*all2 dis#issed up to the ti#e the2 are actuall2 reinstated. +et this case $e re#anded to the +a$or Ar$iter for proper co#putation of the full $ac-wa*es due respondents, in accordance with Article '6B of the +a$or Code, as e4peditiousl2 as possi$le.

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G.R. No. 1$2666 D-c-45-r $, 2011 PICOP RESOURCES, INCORPORATED PRI", R-2r-1-'3-9 >' 3h>1 P-3>3>o' 5) MR. WIL,REDO D. ,UENTES, >' h>1 ca2ac>3) a1 S-'>or :>c-!Pr-1>9-'3 a'9 R-1>9-'3 Ma'a;-r, Petitioner, vs. RICARDO DE=UILLA, ELMO PA.ILANDO, CESAR ATIEN0A a'9 ANICETO OR.ETA, &R., a'9 NAMAPRI!SP,I, Respondents. DECISION MENDO0A, J.: This is a petition for review assailin* the April "), '&&7 Decision " of the Court of Appeals 5C3, which reversed and set aside the Resolutions' of the National +a$or Relations Co##ission 5NLRC, dated Dece#$er '6, '&&' and .arch '(, '&&%, and reinstated the 5une B, '&&" Decision % of the +a$or Ar$iter 5L3,, which declared the dis#issal of the private respondents as ille*al. The .acts Ricardo De3uilla, Cesar Atien@a and Aniceto Or$eta 5private respondents, were re*ular ran-1and1file e#plo2ees of Picop Resources, Inc. 5#IC0#, and #e#$ers of the NA.APRI1SPC+, a dul2 re*istered la$or or*ani@ation and e4istin* $ar*ainin* a*ent of the PICOP ran-1and1file e#plo2ees. PICOP and NA.APRI1 SPC+ had a collective $ar*ainin* a*ree#ent 5CB3, which would e4pire on .a2 '', '&&&. On .a2 "8, '&&&, the late Att2. Proculo P. Cuentes, 5r. 53tt'. .uentes,, then National President of the Southern Philippines Cederation of +a$or 5S#.L,, advised the PICOP #ana*e#ent to ter#inate a$out (&& e#plo2ees due to acts of dislo2alt2, specificall2, for alle*edl2 ca#pai*nin*, supportin* and si*nin* a petition for the certification of a rival union, the Cederation of Cree ?or-ers /nion 5..6, $efore the 8&1da2 Ifreedo# periodI and durin* the effectivit2 of the C,A. Such acts of dislo2alt2 were construed to $e a valid cause for ter#ination under the ter#s and conditions of the C,A. ,ased on the C,A, the freedo# period would start on .arch '', '&&&. Actin* on the advice of Att2. Cuentes, Att2. Ro#ero ,oniel 53tt'. Boniel,, .ana*er of the PICOP +e*al and +a$or Relations Depart#ent, issued a #e#orandu# directin* the e#plo2ees concerned to e4plain within sevent21two 6'! hours wh2 their e#plo2#ent should not $e ter#inated due to alle*ed acts of dislo2alt2. /pon receivin* their e4planation letters, Att2. ,oniel endorsed the sa#e to Att2. Cuentes who then re3uested the ter#ination of )8 e#plo2ees found *uilt2 of acts of dislo2alt2. On Octo$er "8, '&&&, PICOP served a notice of ter#ination due to acts of dislo2alt2 to %" of the )8 e#plo2ees. Private respondents were a#on* the %" e#plo2ees dis#issed fro# e#plo2#ent $2 PICOP on Nove#$er "8, '&&&. Enra*ed at what #ana*e#ent did to the#, private respondents filed a co#plaint $efore the N+RC Re*ional Ar$itration ,ranch No. :III, ,utuan Cit2, for /nfair +a$or Practice and Ille*al Dis#issal with #one2 clai#s, da#a*es and attorne20s fees. L3 Ruling

On 5une B, '&&", after the parties su$#itted their respective position papers, the +A rendered a decision declarin* as ille*al the ter#ination of the private respondents. The dispositive portion of the +A Decision reads9 ?EERECORE, pre#ises considered, >ud*#ent is here$2 entered9 ". Declarin* co#plainants0 dis#issal ille*al< and '. Orderin* respondents PRI and NA.PRI1SPC+ to reinstate co#plainants to their for#er or e3uivalent positions without loss of seniorit2 ri*hts and to >ointl2 and solidaril2 pa2 their $ac-wa*es in the total a#ount of P "66,)&%.8(, as shown in the co#putation, hereto attached and #ar-ed as Anne4 IAI hereof, plus da#a*es in the a#ount of P "&,&&&.&& each and attorne20s fees e3uivalent to "&P of the total #onetar2 award. SO ORDERED. ) NLRC Ruling PICOP elevated the +A decision to the N+RC $ut its appeal was dis#issed in the Nove#$er "B, '&&' N+RC Resolution.7 On #otion for reconsideration, however, the N+RC issued another resolution,8 dated Dece#$er '6, '&&', reversin* and settin* aside its Nove#$er "B, '&&' Resolution, the dispositive portion of which reads9 ?EERECORE, fore*oin* pre#ises considered, the a$ove resolution dated Nove#$er "B, '&&', is Reversed and Set Aside. In lieu thereof, a new >ud*#ent is rendered DIS.ISSINA the a$ove1entitled case for lac- of #erit. SO ORDERED.6 C3 Ruling /pon the denial of their #otion for reconsideration, the private respondents $rou*ht the case to the CA. On April "), '&&7, the CA rendered the su$>ect decision reversin* and settin* aside the Dece#$er '6, '&&' N+RC resolution and reinstatin* the 5une B, '&&" Decision of the +A. The decretal portion of the CA decision reads9 ?EERECORE, pre#ises considered, GtheH instant petition is ARANTED and the assailed resolutions of the Pu$lic Respondent N+RC are here$2 REDERSED and SET ASIDE. In view thereof, ordered REINSTATED is the Decision of Actin* E4ecutive +a$or Ar$iter Ro*elio P. +e*aspi dated &B 5une '&&" which reads9 ?EERECORE, pre#ises considered, >ud*#ent is here$2 entered9 ". Declarin* co#plainants0 dis#issal ille*al< and '. Orderin* Respondents PRI and NA.PRI1SPC+ to reinstate Co#plainants to their for#er or e3uivalent positions without loss of seniorit2 ri*hts and to >ointl2 and solidaril2 pa2 their $ac-wa*es in the total a#ount of P "66,)&%.8(, plus da#a*es in the a#ount of P "&,&&&.&& each and attorne20s fees e3uivalent to "&P of the total #onetar2 award. SO ORDERED.( The CA ruled, a#on* others, that althou*h private respondents si*ned an authori@ation for the filin* of the petition for certification election of a rival union, PICOP De#ocratic Trade /nionist1Cederation of Cree ?or-ers 5..6,, such act was not a sufficient *round to ter#inate the e#plo2#ent of private respondents. It e4plained9
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Ru#inatin* fro# the alle*ed violation of the C,A, ?e see no reason, sufficient and co#pellin* enou*h, to sustain the Pu$lic Respondent0s raison d;etre in overturnin* the +a$or Ar$iter0s rulin* in favor of the Petitioners. ?hile it is true that Petitioners si*ned the authori@ation in support of the Petition for certification election of CC? $efore the Ifreedo# period,I such act is not a sufficient *round to ter#inate the e#plo2#ent of the Petitioners in as #uch as the petition itself was filed durin* the freedo# period. Eence, there is nil a $asis to i#pute acts of dislo2alt2 to Petitioners. I#putations of an alle*ed violation of the C,A should not arise fro# a va*ue and all e#$racin* definition of alle*ed Iacts of dislo2alt2.I Neither should it arise fro# speculative inferences where no evidence appears fro# the record that Respondent NA.APRI1SPC+ e4pressl2 defined Iacts of dislo2alt2.I ,esides, to Our #ind, si*nin* an authori@ation for the filin* of the petition for certification election does not constitute an act of dislo2alt2 per se. There #ust $e proof of conte#poraneous acts of resi*nation or withdrawal of their #e#$ership fro# the Respondent NA.APRI1SPC+ to which the2 are #e#$ers. Respondents #isera$l2 failed to present evidence to >ustif2 a valid ter#ination of e#plo2ees in pursuance to the C,A alle*edl2 violated. Petitioners, in fact re#ained in *ood standin*, a continuin* re3uire#ent for retainin* their e#plo2#ent in the Respondent PRI. Petitioners neither >oined nor affiliated with CC? and continuousl2 paid their union dues with Respondent NA.APRI1SPC+. Conse3uentl2, this lends credence to the +a$or Ar$iter0s rulin* that Petitioners0 dis#issal was indeed ille*al. +i-ewise, the advise of the Respondent NA.APRI1SPC+ to the Respondent PRI to effect the ter#ination of e#plo2ees, includin* herein Petitioners, finds no $asis in fact and in law considerin* that at the ti#e the Respondent PRI dis#issed the Petitioners, a#on* others, on "8 Nove#$er '&&&, there was no #ore C,A to spea- of after it had alread2 e4pired on '' .a2 '&&&. B The CA further a*reed with private respondents that Article '78 and not Article '7%, of the +a$or Code applied in this case. The CA discussed this point as follows9 ?e are inclined to favor Petitioner0s stance that Article '78, supra, is applica$le. The issue of acts of dislo2alt2 relates #ore to a direct connection on the alle*ed violation or $reach of lo2alt2 to the #a>orit2 status of the incu#$ent union than on violation of the ter#s and conditions of the a*ree#ent under Article '7%, supra, as the Respondents would want /s to $elieve. Article '78 provides that at the e4piration of the 8&1da2 period rec-oned fro# the e4piration date of the C,A, the e#plo2er shall continue to reco*ni@e the #a>orit2 status of the incu#$ent $ar*ainin* a*ent onl2 where no petition for certification election is filed. Eowever, as earlier pointed, a petition was alread2 filed $2 the Petitioners, a#on* others, durin* the 8&1da2 freedo# period. Clearl2, fro# the i#ports of said provision, it will render nu*ator2 the purpose of the law providin* for a freedo# period for the filin* of a petition for certification election should the act of si*nin*Ffilin* the said petition $e interpreted as an act of dislo2alt2 and will render farce the need for a certification election as an instru#ent of ascertainin* the true e4pression of the will of the wor-ers as to which la$or or*ani@ation would represent the#.

To construe the provision of law in Article '7%, supra, as i#posin* a restriction a*ainst the si*nin* and filin* a petition for certification election durin* the freedo# period, is to violate the constitutional ri*ht of the e#plo2ees to or*ani@e freel2. It is a $asic precept of statutor2 construction that statutes should $e construed not so #uch accordin* to the letters that -illeth $ut in line with the purpose for which the2 have $een enacted."& Not in confor#it2 with the CA decision, PICOP filed this petition for review posin* the followin* ISS/ES W#ET#ER 6OR NOT8 AN EBISTING COLLECTI:E .ARGAINING AGREEMENT C.A" CAN .E GI:EN ITS ,ULL ,ORCE AND E,,ECT IN ALL ITS TERMS AND CONDITIONS INCLUDING ITS UNION SECURIT+ CLAUSE, E:EN .E+OND T#E 5!+EAR PERIOD W#EN NO NEW C.A #AS +ET .EEN ENTERED INTOC ?EETEER OR NOT AN EONEST ERROR IN TEE INTERPRETATION ANDFOR CONC+/SION OC +A? CA++S ?ITEIN TEE A.,IT OC TEE E:TRA ORDINAR; RE.ED; OC CERTIORARI /NDER R/+E 87, REDISED R/+ES OC CO/RT."" PICOP $asicall2 ar*ues that Article '7% of the +a$or Code applies in this case. Article '7% of the +a$or Code provides that the ter#s and conditions of a C,A re#ain in full force and effect even $e2ond the 712ear period when no new C,A has 2et $een reached. It clai#s that the private respondents violated this provision when the2 ca#pai*ned for, supported and si*ned CC?0s petition for certification election on .arch "B and '&, '&&&, $efore the onset of the freedo# period. It further ar*ues that private respondents were not denied due process when the2 were ter#inated. Cinall2, it clai#s that the decision of the N+RC on the issues raised was not without #erit. Even assu#in* that it erred in its >ud*#ent on the le*al issues raised, its error is not e3uivalent to an a$use of discretion that should fall within the a#$it of the e4traordinar2 re#ed2 of certiorari. #rivate respondents; position Private respondents ar*ue that the su$stantial ar*u#ents raised $2 PICOP in this petition are $asicall2 a rehash of the sa#e issues and ar*u#ents contained in its .otion for Reconsideration of the CA decision. Private respondents adopted and repleaded the rulin* of the CA in their Co##ent"' on this petition. The Court;s Ruling The petition #erits a denial. There is no 3uestion that in the C,A entered into $2 the parties, there is a union securit2 clause. The clause i#poses upon the wor-ers the o$li*ation to >oin and #aintain #e#$ership in the co#pan20s reco*ni@ed union as a condition for e#plo2#ent. I/nion securit2I is a *eneric ter#, which is applied to and co#prehends Iclosed shop,I Iunion shop,I I#aintenance of #e#$ership,I or an2 other for# of a*ree#ent which i#poses upon e#plo2ees the o$li*ation to ac3uire or retain union #e#$ership as a condition affectin* e#plo2#ent. There is union shop when all new re*ular e#plo2ees are re3uired to >oin the union within a certain period as
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a condition for their continued e#plo2#ent. There is #aintenance of #e#$ership shop when e#plo2ees, who are union #e#$ers as of the effective date of the a*ree#ent, or who thereafter $eco#e #e#$ers, #ust #aintain union #e#$ership as a condition for continued e#plo2#ent until the2 are pro#oted or transferred out of the $ar*ainin* unit, or the a*ree#ent is ter#inated. A closed shop, on the other hand, #a2 $e defined as an enterprise in which, $2 a*ree#ent $etween the e#plo2er and his e#plo2ees or their representatives, no person #a2 $e e#plo2ed in an2 or certain a*reed depart#ents of the enterprise unless he or she is, $eco#es, and, for the duration of the a*ree#ent, re#ains a #e#$er in *ood standin* of a union entirel2 co#prised of or of which the e#plo2ees in interest are a part."% There is no dispute that private respondents were #e#$ers of NA.APRI1SPC+ who were ter#inated $2 PICOP due to alle*ed acts of dislo2alt2. It is $asic in la$or >urisprudence that the $urden of proof rests upon #ana*e#ent to show that the dis#issal of its wor-er was $ased on a >ust cause. ?hen an e#plo2er e4ercises its power to ter#inate an e#plo2ee $2 enforcin* the union securit2 clause, it needs to deter#ine and prove the followin*9 "! the union securit2 clause is applica$le< '! the union is re3uestin* for the enforce#ent of the union securit2 provision in the C,A< and %! there is sufficient evidence to support the decision of the union to e4pel the e#plo2ee fro# the union.") In this case, the resolution thereof hin*es on whether PICOP was a$le to show sufficient evidence to support the decision of the union to e4pel private respondents fro# it. PICOP $asicall2 contends that private respondents were >ustl2 ter#inated fro# e#plo2#ent for ca#pai*nin*, supportin* and si*nin* a petition for the certification of CC?, a rival union, $efore the 8&1da2 Ifreedo# periodI and durin* the effectivit2 of the C,A. Their acts constitute an act of dislo2alt2 a*ainst the union which is valid cause for ter#ination pursuant to the /nion Securit2 Clause in the C,A. The Court finds Itself una$le to a*ree. Considerin* the peculiar circu#stances, the Court is of the view that the acts of private respondents are not enou*h proof of a violation of the /nion Securit2 Clause which would warrant their dis#issal. PICOP failed to show in detail how private respondents ca#pai*ned and supported CC?. Their #ere act of si*nin* an authori@ation for a petition for certification election $efore the freedo# period does not necessaril2 de#onstrate union dislo2alt2. It is far fro# $ein* within the definition of Iacts of dislo2alt2I as PICOP would want the Court to $elieve. The act of Isi*nin* an authori@ation for a petition for certification electionI is not dislo2alt2 to the union per se considerin* that the petition for certification election itself was filed durin* the freedo# period which started on .arch '', '&&&. .oreover, as correctl2 ruled $2 the CA, the records are $ereft of proof of an2 conte#poraneous acts of resi*nation or withdrawal of union #e#$ership or non1 pa2#ent of union dues. Neither is there proof that private respondents >oined CC?. The fact is, private respondents re#ained in *ood standin* with their union, NA.APRI1SPC+. This point was settled in the case of PICOP Resources, Incorporated PRI! v. Anacleto +. Ta=eca,"7 where it was written9

Eowever, as to the third re3uisite, we find that there is no sufficient evidence to support the decision of PRI to ter#inate the e#plo2#ent of the respondents. PRI alle*ed that respondents were ter#inated fro# e#plo2#ent $ased on the alle*ed acts of dislo2alt2 the2 co##itted when the2 si*ned an authori@ation for the Cederation of Cree ?or-ers CC?! to file a Petition for Certification Election a#on* all ran-1and1file e#plo2ees of PRI. It contends that the acts of respondents are a violation of the /nion Securit2 Clause, as provided in their Collective ,ar*ainin* A*ree#ent. ?e are unconvinced. ?e are in consonance with the Court of Appeals when it held that the #ere si*nin* of the authori@ation in support of the Petition for Certification Election of CC? on .arch "B, '& and '", or $efore the Ifreedo# period,I is not sufficient *round to ter#inate the e#plo2#ent of respondents inas#uch as the petition itself was actuall2 filed durin* the freedo# period. Nothin* in the records would show that respondents failed to #aintain their #e#$ership in *ood standin* in the /nion. Respondents did not resi*n or withdraw their #e#$ership fro# the /nion to which the2 $elon*. Respondents continued to pa2 their union dues and never >oined the CC?. Si*nificantl2, petitionerOs act of dis#issin* respondents ste##ed fro# the latterOs act of si*nin* an authori@ation letter to file a petition for certification election as the2 si*ned it outside the freedo# period. Eowever, we are constrained to $elieve that an Iauthori@ation letter to file a petition for certification electionI is different fro# an actual IPetition for Certification Election.I +i-ewise, as per records, it was clear that the actual Petition for Certification Election of CC? was filed onl2 on .a2 "(, '&&&. Thus, it was within the a#$it of the freedo# period which co##enced fro# .arch '", '&&& until .a2 '", '&&&. Strictl2 spea-in*, what is prohi$ited is the filin* of a petition for certification election outside the 8&1da2 freedo# period. This is not the situation in this case. If at all, the si*nin* of the authori@ation to file a certification election was #erel2 preparator2 to the filin* of the petition for certification election, or an e4ercise of respondents0 ri*ht to self1or*ani@ation. "8 Cinall2, PICOP insists that Article '7% of the +a$or Code applies in this case, not Article '78 thereof. The Court a*rees with the CA that its ar*u#ent is #isplaced. This issue was tac-led and settled in the sa#e PICOP Resources, Incorporated PRI! v. Ta=eca case, to wit9 .oreover, PRI anchored their decision to ter#inate respondents0 e#plo2#ent on Article '7% of the +a$or Code which states that Iit shall $e the dut2 of $oth parties to -eep the status 3uo and to continue in full force and effect the ter#s and conditions of the e4istin* a*ree#ent durin* the 8&1da2 period andFor until a new a*ree#ent is reached $2 the parties.I It clai#ed that the2 are still $ound $2 the /nion Securit2 Clause of the C,A even after the e4piration of the C,A< hence, the need to ter#inate the e#plo2#ent of respondents. PetitionerOs reliance on Article '7% is #isplaced. The provision of Article '78 of the +a$or Code is particularl2 enli*htenin*. It reads9 Article '78. Representation issue in or*ani@ed esta$lish#ents. 1 In or*ani@ed esta$lish#ents, when a verified petition 3uestionin* the #a>orit2 status of the
LABOR CASES: SUPREME STEEL- BPI | 28

incu#$ent $ar*ainin* a*ent is filed $efore the Depart#ent of +a$or and E#plo2#ent within the si4t21da2 period $efore the e4piration of a collective $ar*ainin* a*ree#ent, the .ed1Ar$iter shall auto#aticall2 order an election $2 secret $allot when the verified petition is supported $2 the written consent of at least twent21five percent '7P! of all the e#plo2ees in the $ar*ainin* unit to ascertain the will of the e#plo2ees in the appropriate $ar*ainin* unit. To have a valid election, at least a #a>orit2 of all eli*i$le voters in the unit #ust have cast their votes. The la$or union receivin* the #a>orit2 of the valid votes cast shall $e certified as the e4clusive $ar*ainin* a*ent of all the wor-ers in the unit. ?hen an election which provides for three or #ore choices results in no choice receivin* a #a>orit2 of the valid votes cast, a run1off election shall $e conducted $etween the la$or unions receivin* the two hi*hest nu#$er of votes9 Provided, That the total nu#$er of votes for all contendin* unions is at least fift2 per cent 7&P! of the nu#$er of votes cast. At the e4piration of the freedo# period, the e#plo2er shall continue to reco*ni@e the #a>orit2 status of the incu#$ent $ar*ainin* a*ent where no petition for certification election is filed. Appl2in* the sa#e provision, it can $e said that while it is incu#$ent for the e#plo2er to continue to reco*ni@e the #a>orit2 status of the incu#$ent $ar*ainin* a*ent even after the e4piration of the freedo# period, the2 could onl2 do so when no petition for certification election was filed. The reason is, with a pendin* petition for certification, an2 such a*ree#ent entered into $2 #ana*e#ent with a la$or or*ani@ation is frau*ht with the ris- that such a la$or union #a2 not $e chosen thereafter as the collective $ar*ainin* representative. The provision for status quo is conditioned on the fact that no certification election was filed durin* the freedo# period. An2 other view would render nu*ator2 the clear statutor2 polic2 to favor certification election as the #eans of ascertainin* the true e4pression of the will of the wor-ers as to which la$or or*ani@ation would represent the#. In the instant case, four )! petitions were filed as earl2 as .a2 "', '&&&. 1awphi1 In fact, a petition for certification election was alread2 ordered $2 the .ed1Ar$iter of DO+E Cara*a Re*ion on Au*ust '%, '&&&. Therefore, followin* Article '78, at the e4piration of the freedo# period, PRIOs o$li*ation to reco*ni@e NA.APRI1SPC+ as the incu#$ent $ar*ainin* a*ent does not hold true when petitions for certification election were filed, as in this case. .oreover, the last sentence of Article '7% which provides for auto#atic renewal pertains onl2 to the econo#ic provisions of the C,A, and does not include representational aspect of the C,A. An e4istin* C,A cannot constitute a $ar to a filin* of a petition for certification election. ?hen there is a representational issue, the status quo provision in so far as the need to await the creation of a new a*ree#ent will not appl2. Otherwise, it will create an a$surd situation where the union #e#$ers will $e forced to #aintain #e#$ership $2 virtue of the union securit2 clause e4istin* under the C,A and, thereafter, support another union when filin* a petition for certification election. If we appl2 it, there will alwa2s $e an issue of dislo2alt2 whenever the e#plo2ees e4ercise their ri*ht to self1or*ani@ation.

The holdin* of a certification election is a statutor2 polic2 that should not $e circu#vented, or co#pro#ised. Ti#e and a*ain, we have ruled that we adhere to the polic2 of enhancin* the welfare of the wor-ers. Their freedo# to choose who should $e their $ar*ainin* representative is of para#ount i#portance. The fact that there alread2 e4ists a $ar*ainin* representative in the unit concerned is of no #o#ent as lon* as the petition for certification election was filed within the freedo# period. ?hat is i#perative is that $2 such a petition for certification election the e#plo2ees are *iven the opportunit2 to #a-e -nown of who shall have the ri*ht to represent the# thereafter. Not onl2 so#e, $ut all of the# should have the ri*ht to do so. ?hat is e3uall2 i#portant is that ever2one $e *iven a de#ocratic space in the $ar*ainin* unit concerned. ?e will e#phasi@e anew that the power to dis#iss is a nor#al prero*ative of the e#plo2er.1avvphi1 This, however, is not without li#itations. The e#plo2er is $ound to e4ercise caution in ter#inatin* the services of his e#plo2ees especiall2 so when it is #ade upon the re3uest of a la$or union pursuant to the Collective ,ar*ainin* A*ree#ent. Dis#issals #ust not $e ar$itrar2 and capricious. Due process #ust $e o$served in dis#issin* an e#plo2ee, $ecause it affects not onl2 his position $ut also his #eans of livelihood. E#plo2ers should, therefore, respect and protect the ri*hts of their e#plo2ees, which include the ri*ht to la$or. "6 Considerin* that private respondents were ille*all2 dis#issed, $asic law provides that the2 shall $e entitled to the $enefit of full $ac-wa*es and reinstate#ent unless the latter is no lon*er via$le, in which case, a *rant of separation pa2 shall $e awarded e3uivalent to one #onth salar2 for ever2 2ear of service. : 4 4 /nder Repu$lic Act No. 86"7, e#plo2ees who are ille*all2 dis#issed are entitled to full $ac-wa*es, inclusive of allowances and other $enefits, or their #onetar2 e3uivalent, co#puted fro# the ti#e their actual co#pensation was withheld fro# the# up to the ti#e of their actual reinstate#ent. ,ut if reinstate#ent is no lon*er possi$le, the $ac-wa*es shall $e co#puted fro# the ti#e of their ille*al ter#ination up to the finalit2 of the decision : 4 4. "( Private respondents are also entitled to an award of attorne20s fees e3uivalent to "&P of the total #onetar2 award as the2 were co#pelled to liti*ate in order to seeredress for their ille*al dis#issal. W#ERE,ORE, the petition is DENIED.

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G.R. No. 16%*01 Oc3o5-r 1/, 2011 .ANK O, T#E P#ILIPPINE ISLANDS, Petitioner, vs. .PI EMPLO+EES UNION!DA:AO C#APTER!,EDERATION O, UNIONS IN .PI UNI.ANK, Respondent. RESO+/TION LEONARDO!DE CASTRO, J.: In the present incident, petitioner ,an- of the Philippine Islands ,PI! #oves for reconsideration" of our Decision dated Au*ust "&, '&"&, holdin* that for#er e#plo2ees of the Car East ,an- and Trust Co#pan2 CE,TC! Ia$sor$edI $2 ,PI pursuant to the two $an-s0 #er*er in '&&& were covered $2 the /nion Shop Clause in the then e4istin* collective $ar*ainin* a*ree#ent C,A!' of ,PI with respondent ,PI E#plo2ees /nion1 Davao Chapter1Cederation of /nions in ,PI /ni$an- the /nion!. To recall, the /nion Shop Clause involved in this lon* standin* controvers2 provided, thus9 ARTIC+E II 4444 Section '. /nion Shop 1 New e#plo2ees fallin* within the $ar*ainin* unit as defined in Article I of this A*ree#ent, who #a2 hereafter $e re*ularl2 e#plo2ed $2 the ,an- shall, within thirt2 %&! da2s after the2 $eco#e re*ular e#plo2ees, >oin the /nion as a condition of their continued e#plo2#ent. It is understood that #e#$ership in *ood standin* in the /nion is a condition of their continued e#plo2#ent with the ,an-.% E#phases supplied.! The $one of contention $etween the parties was whether or not the Ia$sor$edI CE,TC e#plo2ees fell within the definition of Inew e#plo2eesI under the /nion Shop Clause, such that the2 #a2 $e re3uired to >oin respondent union and if the2 fail to do so, the /nion #a2 re3uest ,PI to ter#inate their e#plo2#ent, as the /nion in fact did in the present case. Needless to state, ,PI refused to accede to the /nion0s re3uest. Althou*h ,PI won the initial $attle at the Doluntar2 Ar$itrator level, ,PI0s position was re>ected $2 the Court of Appeals which ruled that the Doluntar2 Ar$itrator0s interpretation of the /nion Shop Clause was at war with the spirit and rationale wh2 the +a$or Code allows the e4istence of such provision. On review with this Court, we upheld the appellate court0s rulin* and disposed of the case as follows9 ?EERECORE, the petition is here$2 DENIED, and the Decision dated Septe#$er %&, '&&% of the Court of Appeals is ACCIR.ED, su$>ect to the thirt2 %&! da2 notice re3uire#ent i#posed herein. Cor#er CE,TC e#plo2ees who opt not to $eco#e union #e#$ers $ut who 3ualif2 for retire#ent shall receive their retire#ent $enefits in accordance with law, the applica$le retire#ent plan, or the C,A, as the case #a2 $e.) Notwithstandin* our affir#ation of the applica$ilit2 of the /nion Shop Clause to for#er CE,TC e#plo2ees, for reasons alread2 e4tensivel2 discussed in the Au*ust "&, '&"& Decision, even now ,PI continues to protest the inclusion of said e#plo2ees in the /nion Shop Clause. In see-in* the reversal of our Au*ust "&, '&"& Decision, petitioner insists that the parties to the C,A clearl2 intended to li#it the application of the /nion Shop Clause onl2 to new e#plo2ees who were hired as non1re*ular e#plo2ees $ut later attained re*ular status at so#e point after hirin*. CE,TC e#plo2ees cannot $e considered new e#plo2ees as ,PI #erel2 stepped into the shoes of CE,TC as an e#plo2er purel2 as a conse3uence of the #er*er.7 Petitioner li-ewise relies heavil2 on the dissentin* opinions of our respected collea*ues, Associate 5ustices Antonio T. Carpio and Arturo D. ,rion. Cro# $oth dissentin* opinions, petitioner derives its contention that Ithe situation of a$sor$ed e#plo2ees can $e li-ened to old e#plo2ees of ,PI, insofar as their full tenure with CE,TC was reco*ni@ed $2 ,PI and

their salaries were #aintained and safe*uarded fro# di#inutionI $ut such a$sor$ed e#plo2ees Icannot and should not $e treated in e4actl2 the sa#e wa2 as old ,PI e#plo2ees for there are su$stantial differences $etween the#.I8 Althou*h petitioner ad#its that there are si#ilarities $etween a$sor$ed and new e#plo2ees, the2 insist there are #ar-ed differences $etween the# as well. Thus, adoptin* 5ustice ,rion0s stance, petitioner contends that the a$sor$ed CE,TC e#plo2ees should $e considered Ia sui *eneris *roup of e#plo2ees whose classification will not $e duplicated until ,PI has another #er*er where it would $e the survivin* corporation.I6 Apparentl2 $orrowin* fro# 5ustice Carpio, petitioner propounds that the /nion Shop Clause should $e strictl2 construed since it purportedl2 curtails the ri*ht of the a$sor$ed e#plo2ees to a$stain fro# >oinin* la$or or*ani@ations.( Pursuant to our directive, the /nion filed its Co##entB on the .otion for Reconsideration. In opposition to petitioner0s ar*u#ents, the /nion, in turn, adverts to our discussion in the Au*ust "&, '&"& Decision re*ardin* the voluntar2 nature of the #er*er $etween ,PI and CE,TC, the lac- of an e4press stipulation in the Articles of .er*er re*ardin* the transfer of e#plo2#ent contracts to the survivin* corporation, and the consensual nature of e#plo2#ent contracts as valid $ases for the conclusion that for#er CE,TC e#plo2ees should $e dee#ed new e#plo2ees."& The /nion ar*ues that the creation of e#plo2#ent relations $etween for#er CE,TC e#plo2ees and ,PI i.e., ,PI0s selection and en*a*e#ent of for#er CE,TC e#plo2ees, its pa2#ent of their wa*es, power of dis#issal and of control over the e#plo2ees0 conduct! occurred after the #er*er, or to $e #ore precise, after the Securities and E4chan*e Co##ission0s SEC! approval of the #er*er."" The /nion li-ewise points out that ,PI failed to offer an2 counterar*u#ent to the Court0s reasonin* that9 The rationale for upholdin* the validit2 of union shop clauses in a C,A, even if the2 i#pin*e upon the individual e#plo2eeOs ri*ht or freedo# of association, is not to protect the union for the unionOs sa-e. +aws and >urisprudence pro#ote unionis# and afford certain protections to the certified $ar*ainin* a*ent in a unioni@ed co#pan2 $ecause a stron* and effective union presu#a$l2 $enefits all e#plo2ees in the $ar*ainin* unit since such a union would $e in a $etter position to de#and i#proved $enefits and conditions of wor- fro# the e#plo2er. 4 4 4. 4 4 4 Nonetheless, settled >urisprudence has alread2 swun* the $alance in favor of unionis#, in reco*nition that ulti#atel2 the individual e#plo2ee will $e $enefited $2 that polic2. In the hierarch2 of constitutional values, this Court has repeatedl2 held that the ri*ht to a$stain fro# >oinin* a la$or or*ani@ation is su$ordinate to the polic2 of encoura*in* unionis# as an instru#ent of social >ustice."' ?hile #ost of the ar*u#ents offered $2 ,PI have alread2 $een thorou*hl2 addressed in the Au*ust "&, '&"& Decision, we find that a 3ualification of our rulin* is in order onl2 with respect to the interpretation of the provisions of the Articles of .er*er and its i#plications on the for#er CE,TC e#plo2ees0 securit2 of tenure. Ta-in* a second loo- on this point, we have co#e to a*ree with 5ustice ,rion0s view that it is #ore in -eepin* with the dictates of social >ustice and the State polic2 of accordin* full protection to la$or to dee# e#plo2#ent contracts as auto#aticall2 assu#ed $2 the survivin* corporation in a #er*er, even in the a$sence of an e4press stipulation in the articles of #er*er or the #er*er plan. In his dissentin* opinion, 5ustice ,rion reasoned that9 To #2 #ind, due consideration of Section (& of the Corporation Code, the constitutionall2 declared policies on wor-, la$or and e#plo2#ent, and the specific CE,TC1,PI situation R i.e., a #er*er with co#plete I$od2 and soulI transfer of all that CE,TC e#$odied and possessed and where $oth participatin* $an-s were willin* al$eit $2 deed, not $2 their written a*ree#ent! to provide for the affected hu#an resources $2 reco*ni@in* continuit2 of e#plo2#ent R should point this Court to a declaration that in a co#plete #er*er situation where there is total ta-eover $2 one corporation over another and there is silence in the
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#er*er a*ree#ent on what the fate of the hu#an resource co#ple#ent shall $e, the latter should not $e left in le*al li#$o and should $e properl2 provided for, $2 co#pellin* the survivin* entit2 to a$sor$ these e#plo2ees. This is what Section (& of the Corporation Code co##ands, as the survivin* corporation has the le*al o$li*ation to assu#e all the o$li*ations and lia$ilities of the #er*ed constituent corporation. Not to $e for*otten is that the affected e#plo2ees #ana*ed, operated and wor-ed on the transferred assets and properties as their #eans of livelihood< the2 constituted a $asic co#ponent of their corporation durin* its e4istence. In a #er*er and consolidation situation, the2 cannot $e treated without consideration of the applica$le constitutional declarations and directives, or, worse, $e si#pl2 disre*arded. If the2 are so treated, it is up to this Court to read and interpret the law so that the2 are treated in accordance with the le*al re3uire#ents of #er*ers and consolidation, read in li*ht of the social >ustice, econo#ic and social provisions of our Constitution. Eence, there is a need for the survivin* corporation to ta-e responsi$ilit2 for the affected e#plo2ees and to a$sor$ the# into its wor-force where no appropriate provision for the #er*ed corporationOs hu#an resources co#ponent is #ade in the .er*er Plan."% ,2 upholdin* the auto#atic assu#ption of the non1survivin* corporation0s e4istin* e#plo2#ent contracts $2 the survivin* corporation in a #er*er, the Court stren*thens >udicial protection of the ri*ht to securit2 of tenure of e#plo2ees affected $2 a #er*er and avoids confusion re*ardin* the status of their various $enefits which were a#on* the chief o$>ections of our dissentin* collea*ues. Eowever, nothin* in this Resolution shall i#pair the ri*ht of an e#plo2er to ter#inate the e#plo2#ent of the a$sor$ed e#plo2ees for a lawful or authori@ed cause or the ri*ht of such an e#plo2ee to resi*n, retire or otherwise sever his e#plo2#ent, whether $efore or after the #er*er, su$>ect to e4istin* contractual o$li*ations. In this #anner, 5ustice ,rion0s theor2 of auto#atic assu#ption #a2 $e reconciled with the #a>orit20s concerns with the successor e#plo2er0s prero*ative to choose its e#plo2ees and the prohi$ition a*ainst involuntar2 servitude.1avvphi1 Notwithstandin* this concession, we find no reason to reverse our previous pronounce#ent that the a$sor$ed CE,TC e#plo2ees are covered $2 the /nion Shop Clause. Even in our Au*ust "&, '&"& Decision, we alread2 o$served that the le*al fiction in the law on #er*ers that the survivin* corporation continues the corporate e4istence of the non1 survivin* corporation! is #ainl2 a tool to ad>udicate the ri*hts and o$li*ations $etween and a#on* the #er*ed corporations and the persons that deal with the#.") Such a le*al fiction cannot $e undul2 e4tended to an interpretation of a /nion Shop Clause so as to defeat its purpose under la$or law. Eence, we stated in the Decision that9 In an2 event, it is of no #o#ent that the for#er CE,TC e#plo2ees retained the re*ular status that the2 possessed while wor-in* for their for#er e#plo2er upon their a$sorption $2 petitioner. This fact would not re#ove the# fro# the scope of the phrase Inew e#plo2eesI as conte#plated in the /nion Shop Clause of the C,A, contrar2 to petitionerOs insistence that the ter# Inew e#plo2eesI onl2 refers to those who are initiall2 hired as non1re*ular e#plo2ees for possi$le re*ular e#plo2#ent. The /nion Shop Clause in the C,A si#pl2 states that Inew e#plo2eesI who durin* the effectivit2 of the C,A I#a2 $e re*ularl2 e#plo2edI $2 the ,an- #ust >oin the union within thirt2 %&! da2s fro# their re*ulari@ation. There is nothin* in the said clause that li#its its application to onl2 new e#plo2ees who possess non1re*ular status, #eanin* pro$ationar2 status, at the start of their e#plo2#ent. Petitioner li-ewise failed to point to an2 provision in the C,A e4pressl2 e4cludin* fro# the /nion Shop Clause new e#plo2ees who are Ia$sor$edI as re*ular e#plo2ees fro# the $e*innin* of their e#plo2#ent. ?hat is indu$ita$le fro# the /nion Shop Clause is that upon the effectivit2 of the C,A, petitionerOs

new re*ular e#plo2ees re*ardless of the #anner $2 which the2 $eca#e e#plo2ees of ,PI! are re3uired to >oin the /nion as a condition of their continued e#plo2#ent."7 Althou*h $2 virtue of the #er*er ,PI steps into the shoes of CE,TC as a successor e#plo2er as if the for#er had $een the e#plo2er of the latter0s e#plo2ees fro# the $e*innin* it #ust $e e#phasi@ed that, in realit2, the le*al conse3uences of the #er*er onl2 occur at a specific date, i.e., upon its effectivit2 which is the date of approval of the #er*er $2 the SEC. Thus, we o$served in the Decision that ,PI and CE,TC stipulated in the Articles of .er*er that the2 will $oth continue their respective $usiness operations until the SEC issues the certificate of #er*er and in the event no such certificate is issued, the2 shall hold each other $la#eless for the non1consu##ation of the #er*er. "8 ?e li-ewise previousl2 noted that ,PI #ade its assi*n#ents of the for#er CE,TC e#plo2ees effective on April "&, '&&&, or after the SEC approved the #er*er. "6 In other words, the o$li*ation of ,PI to pa2 the salaries and $enefits of the for#er CE,TC e#plo2ees and its ri*ht of discipline and control over the# onl2 arose with the effectivit2 of the #er*er. Conco#itantl2, the o$li*ation of for#er CE,TC e#plo2ees to render service to ,PI and their ri*ht to receive $enefits fro# the latter also arose upon the effectivit2 of the #er*er. ?hat is #aterial is that all of these le*al conse3uences of the #er*er too- place durin* the life of an e4istin* and valid C,A $etween ,PI and the /nion wherein the2 have #utuall2 consented to include a /nion Shop Clause. Cro# the plain, ordinar2 #eanin* of the ter#s of the /nion Shop Clause, it covers e#plo2ees who a! enter the e#plo2 of ,PI durin* the ter# of the C,A< $! are part of the $ar*ainin* unit defined in the C,A as co#prised of ,PI0s ran- and file e#plo2ees!< and c! $eco#e re*ular e#plo2ees without distin*uishin* as to the #anner the2 ac3uire their re*ular status. Conse3uentl2, the nu#$er of such e#plo2ees #a2 adversel2 affect the #a>orit2 status of the /nion and even its e4istence itself, as alread2 a#pl2 e4plained in the Decision. Indeed, there are differences $etween a! new e#plo2ees who are hired as pro$ationar2 or te#porar2 $ut later re*ulari@ed, and $! new e#plo2ees who, $2 virtue of a #er*er, are a$sor$ed fro# another co#pan2 as re*ular and per#anent fro# the $e*innin* of their e#plo2#ent with the survivin* corporation. It $ears reiteratin* here that these differences are too insu$stantial to warrant the e4clusion of the a$sor$ed e#plo2ees fro# the application of the /nion Shop Clause. In the Decision, we noted that9 Deril2, we a*ree with the Court of Appeals that there are no su$stantial differences $etween a newl2 hired non1re*ular e#plo2ee who was re*ulari@ed wee-s or #onths after his hirin* and a new e#plo2ee who was a$sor$ed fro# another $an- as a re*ular e#plo2ee pursuant to a #er*er, for purposes of appl2in* the /nion Shop Clause. ,oth e#plo2ees were hiredFe#plo2ed onl2 after the C,A was si*ned. At the ti#e the2 are $ein* re3uired to >oin the /nion, the2 are $oth alread2 re*ular ran- and file e#plo2ees of ,PI. The2 $elon* to the sa#e $ar*ainin* unit $ein* represented $2 the /nion. The2 $oth en>o2 $enefits that the /nion was a$le to secure for the# under the C,A. ?hen the2 $oth entered the e#plo2 of ,PI, the C,A and the /nion Shop Clause therein were alread2 in effect and neither of the# had the opportunit2 to e4press their preference for unionis# or not. ?e see no co*ent reason wh2 the /nion Shop Clause should not $e applied e3uall2 to these two t2pes of new e#plo2ees, for the2 are undenia$l2 si#ilarl2 situated."( A*ain, it is worthwhile to hi*hli*ht that a contrar2 interpretation of the /nion Shop Clause would dilute its efficac2 and put the certified union that is supposedl2 $ein* protected there$2 at the #erc2 of #ana*e#ent. Cor if the for#er CE,TC e#plo2ees had no sa2 in the #er*er of its for#er e#plo2er with another $an-, as petitioner ,PI repeatedl2 decries on their $ehalf, the /nion li-ewise could not prevent ,PI fro# proceedin* with the #er*er which undisputedl2 affected the nu#$er of e#plo2ees in the $ar*ainin* unit that the /nion
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represents and #a2 ne*ativel2 i#pact on the /nion0s #a>orit2 status. In this instance, we should $e *uided $2 the principle that courts #ust place a practical and realistic construction upon a C,A, *ivin* due consideration to the conte4t in which it is ne*otiated and purpose which it is intended to serve."B ?e now co#e to the 3uestion9 Does our affir#ance of our rulin* that for#er CE,TC e#plo2ees a$sor$ed $2 ,PI are covered $2 the /nion Shop Clause violate their ri*ht to securit2 of tenure which we e4pressl2 upheld in this ResolutionS ?e answer in the ne*ative. In Rance v. National +a$or Relations Co##ission,'& we held that9 It is the polic2 of the state to assure the ri*ht of wor-ers to Isecurit2 of tenureI Article :III, Sec. % of the New Constitution, Section B, Article II of the "B6% Constitution!. The *uarantee is an act of social >ustice. ?hen a person has no propert2, his >o$ #a2 possi$l2 $e his onl2 possession or #eans of livelihood. Therefore, he should $e protected a*ainst an2 ar$itrar2 deprivation of his >o$. Article '(& of the +a$or Code has construed 1-c(r>3) oA 3-'(r- a1 4-a'>'; 3ha3 D3h- -42?o)-r 1ha?? 'o3 3-r4>'a3- 3h- 1-rE>c-1 oA a' -42?o)-- -Fc-23 Aor a G(13 ca(1- or Hh-' a(3hor>I-9 5)D 3h- Co9-. 4 4 4 E#phasis supplied.! ?e have also previousl2 held that the funda#ental *uarantee of securit2 of tenure and due process dictates that no wor-er shall $e dis#issed e4cept for a >ust and authori@ed cause provided $2 law and after due process is o$served.'" Even as we now reco*ni@e the ri*ht to continuous, un$ro-en e#plo2#ent of wor-ers who are a$sor$ed into a new co#pan2 pursuant to a #er*er, it is $ut lo*ical that their e#plo2#ent #a2 $e ter#inated for an2 causes provided for under the law or in >urisprudence without violatin* their ri*ht to securit2 of tenure. As 5ustice Carpio discussed in his dissentin* opinion, it is well1settled that ter#ination of e#plo2#ent $2 virtue of a union securit2 clause e#$odied in a C,A is reco*ni@ed in our >urisdiction.'' In Del .onte Philippines, Inc. v. Saldivar,'% we e4plained the rationale for this polic2 in this wise9 Article '6B of the +a$or Code ordains that Iin cases of re*ular e#plo2#ent, the e#plo2er shall not ter#inate the services of an e#plo2ee e4cept for a >ust cause or when authori@ed $2 GTitle I, ,oo- Si4 of the +a$or CodeH.I A94>33-9?), 3h- -'Aorc-4-'3 oA a c?o1-9!1ho2 or ('>o' 1-c(r>3) 2roE>1>o' >' 3h- C.A a1 a ;ro('9 Aor 3-r4>'a3>o' A>'91 'o -F3-'1>o' H>3h>' a') oA 3h- 2roE>1>o'1 ('9-r T>3?- I, .oo@ S>F oA 3h- La5or Co9-. +-3 G(r>12r(9-'c- ha1 co'1>13-'3?) r-co;'>I-9, 3h(1J DI3 >1 S3a3- 2o?>c) 3o 2ro4o3('>o'>14 to ena$le wor-ers to ne*otiate with #ana*e#ent on an even pla2in* field and with #ore persuasiveness than if the2 were to individuall2 and separatel2 $ar*ain with the e#plo2er. Cor this reason, the law has allowed stipulations for Ounion shopO and Oclosed shopO as #eans of encoura*in* wor-ers to >oin and support the union of their choice in the protection of their ri*hts and interests vis1a1vis the e#plo2er.I') E#phasis supplied.! Althou*h it is accepted that non1co#pliance with a union securit2 clause is a valid *round for an e#plo2ee0s dis#issal, >urisprudence dictates that such a dis#issal #ust still $e done in accordance with due process. This #uch we decreed in Aeneral .illin* Corporation v. Casio,'7 to wit9 The Court reiterated in .ala2an* Sa#ahan n* #*a .an**a*awa sa .. Areenfield v. Ra#os that9 ?hile respondent co#pan2 #a2 validl2 dis#iss the e#plo2ees e4pelled $2 the union for dislo2alt2 under the union securit2 clause of the collective $ar*ainin* a*ree#ent upon the reco##endation $2 the union, this dis#issal should not $e done hastil2 and su##aril2 there$2 erodin* the e#plo2eesO ri*ht to due process, self1or*ani@ation and securit2 of tenure. The enforce#ent of union securit2 clauses is authori@ed $2 law provided such enforce#ent is not characteri@ed $2 ar$itrariness, and alwa2s with due process. Even on the assu#ption that the federation had valid *rounds to e4pel the union officers, due

process re3uires that these union officers $e accorded a separate hearin* $2 respondent co#pan2. The twin re3uire#ents of notice and hearin* constitute the essential ele#ents of procedural due process. The law re3uires the e#plo2er to furnish the e#plo2ee sou*ht to $e dis#issed with two written notices $efore ter#ination of e#plo2#ent can $e le*all2 effected9 "! a written notice apprisin* the e#plo2ee of the particular acts or o#issions for which his dis#issal is sou*ht in order to afford hi# an opportunit2 to $e heard and to defend hi#self with the assistance of counsel, if he desires, and '! a su$se3uent notice infor#in* the e#plo2ee of the e#plo2erOs decision to dis#iss hi#. This procedure is #andator2 and its a$sence taints the dis#issal with ille*alit2. Irrefra*a$l2, A.C cannot dispense with the re3uire#ents of notice and hearin* $efore dis#issin* Casio, et al. even when said dis#issal is pursuant to the closed shop provision in the C,A. The ri*hts of an e#plo2ee to $e infor#ed of the char*es a*ainst hi# and to reasona$le opportunit2 to present his side in a controvers2 with either the co#pan2 or his own union are not wiped awa2 $2 a union securit2 clause or a union shop clause in a collective $ar*ainin* a*ree#ent. 4 4 4'8 E#phases supplied.! In li*ht of the fore*oin*, we find it appropriate to state that, apart fro# the fresh thirt2 %&!1 da2 period fro# notice of finalit2 of the Decision *iven to the affected CE,TC e#plo2ees to >oin the /nion $efore the latter can re3uest petitioner to ter#inate the for#er0s e#plo2#ent, petitioner #ust still accord said e#plo2ees the twin re3uire#ents of notice and hearin* on the possi$ilit2 that the2 #a2 have other >ustifications for not >oinin* the /nion. Si#ilar to our Au*ust "&, '&"& Decision, we reiterate that our rulin* presupposes there has $een no #aterial chan*e in the situation of the parties in the interi#. ?EERECORE, the .otion for Reconsideration is DENIED. The Decision dated Au*ust "&, '&"& is ACCIR.ED, su$>ect to the 3ualifications that9 a! Petitioner is dee#ed to have assu#ed the e#plo2#ent contracts of the Car East ,an- and Trust Co#pan2 CE,TC! e#plo2ees upon effectivit2 of the #er*er without $rea- in the continuit2 of their e#plo2#ent, even without e4press stipulation in the Articles of .er*er< and $! Aside fro# the thirt2 %&! da2s, counted fro# notice of finalit2 of the Au*ust "&, '&"& Decision, *iven to for#er CE,TC e#plo2ees to >oin the respondent, said e#plo2ees shall $e accorded full procedural due process $efore their e#plo2#ent #a2 $e ter#inated.

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