SAN MIGUEL FOODS INC V SMC EMPLOYEES UNION-PTWGO due process, the technicalities of law and procedure and
chnicalities of law and procedure and the rules obtaining
OCT 5 2007 | CARPIO-MORALES, J
FACTS
UNION was the SEBA of all the monthly paid employees of SMFI
 Some employees of SMFI’s Financial Department, through the UNION, brought a
grievance against Financial Manager MONTESA for discrimination, favoritism,
unfair labor practices, not flexible, harassment, promoting divisiveness and
sectarianism, etc before SMFI Plant Operations Manager in accordance with
Step 1 of the grievance machinery in CBA
 UNION sought the 1. Review, evaluation & upgrading of all Financial staff and 2.
Promotion of GQ MONTESA to other SMC affiliates & subsidiaries
 GRIEVANCE MEETING (JAN 14 1993): SMFI informed UNION that it planned to
address the grievance through a “work management review” which would be
completed by MAR 1993 so it asked the finance personnel to give it their attention
and cooperation
o The work management review was not completed by MAR 1993, UNION
elevated the grievance to Step 2 on MAR 26 1993
 Almost 9 months after the grievance meeting was held (OCT 6 1993), SMFI
rendered a decision on Step 1 Grievance stating that it was still in the process of
completing the work management review [UNION’s request could not be
granted]
UNION filed a complaint before NLRC against SMFI for unfair labor practice and
unjust discrimination in matters of promotion praying that SMFI et al be ordered to
promote named employees with corresponding pay increases or adjustment including
payment of salary differentials and attorney’s fees and to cease and desist from
committing the same unjust discrimination in matters of promotion
 SMFI: Filed a motion to dismiss contending that the issues raised were grievance
issues and should be resolved in the grievance machinery in CBA or in mandated
provision of voluntary arbitration
 LA: Granted SMFI’s MTD – ordered remand of case to grievance machinery for
completion of the proceedings
 NLRC: Appeal/MR by UNION granted – ordered LA to continue proceedings
 CA: Denied SMFI’s petition for certiorari – LA has jurisdiction over the complaint
of UNION because SMFI violated the seniority rule under CBA by appointing and
promoting certain employees which amounted to a ULP
ISSUES
1. WON LA has jurisdiction over the complaint of UNION? YES
Art 217 Labor Code – jurisdiction of LA includes complaints for ULP
SMFI’S ARGUMENTS: Allegations in UNION’s complaint filed before LA do not
establish a cause of action for ULP, the UNION having merely contended that SMFI
was guilty thereof without specifying the ultimate facts upon which it is based [Sec 1
Rule 8 ROC]
COURT: Particular acts of ULP alleged to have been committed by SMFI were not
specified; neither were the ultimate facts in support thereof
 HOWEVER, the union detailed the particular acts of ULP attributed to SMFI and
the ultimate facts in support thereof
 Sec 7 Rule V of the New Rules of Procedure of NLRC - The proceedings before
the Labor Arbiter shall be non-litigious in nature. Subject to the requirements of
in the courts of law shall not strictly apply thereto.
 Sec 1 Rule 8 ROC should not be strictly applied to a case filed before LA so in
determining jurisdiction over a case, allegations made in the complaint as well as
those in the position paper may be considered
IN POSITION PAPER
 Complaint for ULP pursuant to Art 248 (e) and (i) of Labor Code
o (e) – discriminate in regard to wages, hours of work and other terms of
conditions of employment in order to encourage or discourage membership in
any labor organization
o (i) to violate CBA
 large scale and wanton unjust discrimination in matters of promotion (of following
members: VENTURA, GERONIMO, CRUZ, CALASIN, PERALTA, ALANO,
MORALEDA all assigned with the Finance Department)
 gross and blatant violations by SMFI of Sec 5 Art III (Job Security) and Sec 4 Art
VIII (Grievance Machinery) of CBA
2. WON SMFI’s violation of the CBA constitutes unfair labor practice? YES – JOB
SECURITY PROVISION ON SENIORITY RULE
ON PROMOTIONS
COURT: Union did not allege that they were done to encourage or discourage
membership in a labor organization – in fact, those promoted were members of UNION
[PROMOTION DO NOT AMOUNT TO ULP]
ON VIOLATION OF CBA
GRIEVANCE MACHINERY PROVISION
Art 248(i) for violation of CBA is qualified by Art 261 – violations of CBA, except those
which are gross in character, shall no longer be treated as ULP and shall be resolved
as grievances under CBA (gross violation of CBA shall mean flagrant and/or malicious
refusal to comply with economic provisions of such agreement)
IN CASE AT BAR, Allegations of UNION in its Position Paper charges SMFI to have
violated the grievance machinery provisions in CBA [not economic provision HENCE
requirement for LA to exercise jurisdiction of a ULP is not present]
JOB SECURITY PROVISION
UNION: SMFI appointed less senior employees to positions as its Finance Department,
consequently intentionally by-passing more senior employees who are deserving of
said appointment
Art 4 Labor Code – all doubts in implementation and interpretation of the provisions
the Code, including IRR shall be resolved in favor of labor
IN CASE AT BAR, since seniority rule in the promotion of employees has a bearing on
salary and benefits, it may, following a liberal construction of Art 261 of the Labor Code,
be considered an economic provision of CBA
 Charge of promoting less senior employees thus bypassing others who are more
senior and equally and more qualified is a gross and flagrant violation of the
seniority rule under CBA, a ULP over which LA has jurisdiction
WHEREFORE, PETITION DENIED