PAL v NLRC (1993)

Formulation of a code of discipline among employees is a shared responsibility of employer and

the employees
FACTS:
PAL completely revised its 1966 Code of Discipline on March 15, 1985. The code was
circulatedamong employees and was immediately implemented. Some employees were forthwith
subjectedto the disciplinary measures embodied therein. PALEA filed a complaint before NLRC for
unfair labor practice. They contend that PAL arbitrarilyimplemented the code of discipline without
notice and prior discussion with the Union by themanagement. They alleged that the code was
circulated only in limited numbers, that it wasarbitrary and prejudicial to the rights of the
employees. PAL asserted its prerogative as an employer to prescribe rules and regulations and
that it did not violate the CBA and any provision in the Labor Code.
LA: Found no bad faith in implementation of the code but PAL not totally guilt free. PAL failed to
prove the code was amply circulated.
NLRC: No ULP. New Code of Discipline should be reviewed with union because it involves security
of tenure and loss of employment.
ISSUE: Whether the formulation of a code of discipline among employees is a shared
responsibility of employer and the employees.
HELD: Yes
The court ruled against petitioner. Employees must take part in the formulation of thecode of
discipline. Industrial peace cannot be achieved if employees are denied their just participation in
the discussion of matters affecting their rights.
When PAL revised the code in 1985, RA 6715 - which included in the state policy to ensure
participation of workers in decision and policy-making processes affecting their right, duties
andwelfare - was yet to be enacted in 1989. However, in the absence of the provision of
law,exercise of management prerogatives was never considered boundless.
The provisions of the code clearly have repercussions on the employees right to security of
tenure. Its implementation may result in the deprivation of an employees means of livelihood
which is a property right. The court must uphold the constitutional requirements for the
protectionof labor and promotion of social justice. When there is doubt, favor the worker.
PAL posits that under the 1989-1991 CBA, PALEA in effect recognized PALs exclusive right to
make and enforce company rules and regulations to carry out the functions of
managementwithout having to discuss it with PALEA. But the court rules that such provision
must not be interpreted as cession of employees rights to particip ate in the deliberation of
matters which mayaffect their rights and the formulation of policies relative thereof.Whatever
disciplinary measures are adopted, it cannot be properly implemented in the absenceof full
cooperation of employees. Such cooperation cannot be attained if employees are restive on
account, of their being left out in the determination of cardinal and fundamental matters
affecting their employment.