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MAC 1
CASE SUMMARY
Digitel and Digitel Employees Union were negotiating for a CBA, but it reached a deadlock. Several
years later, Digitel Employees Union wanted another negotiation, however, Digitel refused to bargain so
the Union filed for a preventive mediation. SOLE later assumed jd over the case. Subsequently,
Digiserv, Inc. closed down which affected several union members. Union used this ground to complain
of unfair labor practice.
The SC held that Digitel is guilty of ULP because of its evident bad faith in closing down Digiserv, which
was found to be a labor-only contracting company, because of its manifest bad faith.
DOCTRINE
Under Article 248(c) of the Labor Code the dismissal constitutes an unfair labor practice. Art. 248 (c)
refers to contracting out services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to self-organization.
FACTS
Digital Employees Union became the exclusive bargaining agent of all R&F employees of Digitel
by virtue of a certification election.
The Union and Digitel then commenced CB negotiations which resulted in a bargaining deadlock.
The Union threatened to go on strike, but then Acting Labor Secretary Bienvenido E. Laguesma
assumed jurisdiction over the dispute and eventually directed the parties to execute a CBA.
o No CBA was forged. Some Union members abandoned their employment with Digitel. The
Union later became dormant.
10 years after, Digitel received a letter from Esplana, who identified himself as the union
president, containing a list of union officers, CBA proposals and ground rules.
Digitel was reluctant to negotiate with the Union and demanded that the latter show compliance
with the provisions of the Unions Constitution and By-laws on union membership and election of
officers.
Esplana, along with other union officers, filed for a preventive mediation with the NCMB based on
Digitels violation of the duty to bargain, and later, a motion to strike.
SOLE Sto. Tomas assumed JD.
During the pendency of the controversy, Digital Service, Inc. (Digiserv), a non-profit enterprise
engaged in call center servicing, filed with the DOLE an Establishment Termination Report stating
that it will cease its business operation.
o This could affect 100 employees, 42 of which were union members
As a result, Esplana et al. filed another Notice of Strike for union busting, illegal lock-out, and
violation of the assumption order
o SOLE ordered that the second notice of strike is subsumed in the first assumption order.
Meanwhile, Digitel filed a petition with the BLR seeking cancellation of the Unions registration on
the ff. grounds:
o failure to file the required reports from 1994-2004;
o misrepresentation of its alleged officers;
o membership of the Union is composed of rank and file, supervisory and managerial
employees; and
o substantial number of union members are not Digitel employees.
DOLE RD: dismissed petition for cancellation.
BLR: affirmed dismissal.
Meanwhile, the unfair labor practice issue was certified for compulsory arbitration before the
NLRC.
o NLRC dismissed the unfair labor practice charge against Digitel but declaring the
dismissal of the 13 employees of Digiserv as illegal and ordering their reinstatement.
o Upon MR, 4 employees were removed from entitlement
CA: 2 petitions were consolidated.
o upheld the Secretary of Labors Order for Digitel to commence CBA negotiations with the
Union and emphasized that the pendency of a petition for the cancellation of a unions
registration does not bar the holding of negotiations for a CBA.
o Digiserv is engaged in labor-only contracting and that its employees are actually
employees of Digitel
ISSUE state all issues first. Bold the one related to the subject
1. WON the SOLE erred in assuming jd over the case despite pending petition for cancellation of
union registration? NO.
1. WON Digiserv is a legitimate contractor? YES
2. WON there was valid dismissal NO
RATIO
1. WON NO. because the court chever chever
a. It is well-settled that the pendency of a petition for cancellation of union registration does
not preclude collective bargaining.
b. Capitol Medical Center vs. Trajano: That there is a pending cancellation proceeding
against the respondent Union is not a bar to set in motion the mechanics of collective
bargaining. If a certification election may still be ordered despite the pendency of a
petition to cancel the unions registration certificate (National Union of Bank Employees
vs. Minister of Labor, 110 SCRA 274), more so should the collective bargaining process
continue despite its pendency. We must emphasize that the majority status of the
respondent Union is not affected by the pendency of the Petition for
Cancellation pending against it. Unless its certificate of registration and its status as
the certified bargaining agent are revoked, the Hospital is, by express provision of the
law, duty bound to collectively bargain with the Union.
c. Legend International Resorts Limited v. Kilusang Manggagawa ng Legenda (KML-
Independent): at the time of the filing of the petition for certification election or a CBA
process as in the instant case the union still had the personality to file a petition for
certification or to ask for a CBA negotiation as in the present case.