Coca-cola Bottlers, Phils., Inc. v.

Kapisanan ng Malayang Manggagawa sa Coca-Cola-FFW and

Florentino Ramirez
Feb. 28, 2005 | 2nd Div | J. Callejo, Sr.

Facts:
1. Coca-Cola hired Ramirez as driver-helper in 1982. In October 1996, the company assigned him as
temporary replacement of the regular route salesman for routes M11, AMC, and LPR since he
had been driving fro the route salesman for so long.
2. Thereafter, Victor Dela Cruz,OIC of the Batangas Sales Office, informed the OIC of DSS-District
44, that a review of the copies of the invoices relating to the transactions of Ramirez in Route
M11 revealed discrepancies in (a) the number of cases delivered to customers; (b) empty bottles
retrieved from them, and (c) the amounts in Sales Invoices Nos. 3212215, 3288587, 3288763,
3288765 and 3288764.
3. Ramirez received a memorandum from the company requiring him to report to the office until
such time that he would be notified of the formal investigation of the charges against him.
During the formal investigation, Ramirez explained that:
- he failed to note the return of 33 cases of empty bottles in the customer’s copy of the sales
invoice because the latter misplaced the invoice; however, the bottles were turned over to
the company;
- the customer made an overpayment of P504.00, however, he returned the amount to the
customer from his own money and retained the P504.00 by way of reimbursement;
- the discrepancy with regard to Sales Invoice No. 3288763 and 3288765 was made due to his
inadvertence; and
- he only realized the return of several cases of empty bottles amounting to P2,250 when he
had already unloaded and given the customer’s copy of the sales invoice; however, he
indicated the same in the copy of the sales invoice he submitted to the company.
4. The company dismissed Ramirez on the ground that he clearly violated Sections 10 and 12 if the
CCBPI Employees Code of Disciplinary Rules and Regulations coupled with his prior infractions.
5. Ramirez and the union filed a complaint for ULP and illegal dismissal against the Company. LA
and NLRC dismissed the complaint for lack of merit. CA’s original decision upheld both LA and
NLRC; however, in its Resolution CA held that the penalty of dismissal was too harsh and that
there was no dishonesty or a demonstration of moral perverseness as would justify the claimed
loss of confidence attendant to the job. CA also held that he was not afforded due process.

Issue: W/N Ramirez was dismissed without just or valid cause. YES

Ratio:

The court upheld that Ramirez committed irregularities in the performance of his duties as a route
salesman, however, the penalty of dismissal for such infraction is too severe.

In order to effect a valid dismissal of an employee, the law requires that there be just and valid cause as
provided in Article 282 and that the employee was afforded an opportunity to be heard and to defend
himself. The burden of proof is always on the employer to prove that the dismissal was for a just and
valid cause.

In cases when an employer may dismiss an employee on the ground of willful disobedience, there must
be concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or
intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the employee and must pertain to the
duties which he had been engaged to discharge.

Re: Dishonesty

Here, Ramirez was dismissed for dishonesty, more specifically for violation of the company policy, and,
more particularly, Sections 10 and 12 of Company Rules and Regulation No. 005-85, Fictitious sales
transactions; Falsification of company records/data/documents/reports; Conspiring or conniving with,
or directing others to commit fictitious transactions; and inefficiency in the performance of duties,
negligence and blatant disregard of or deviation from established control and other policies and
procedures.
However, the company failed to adduce clear and convincing evidence that the Ramirez had fictitious
sales transactions, or that he falsified company records/documents/reports, or that he connived with
customers of the company to persuade them to commit fictitious transactions. While it is true that
Ramirez committed infractions in his sales transaction, there is no clear and convincing evidence that
the he did so intentionally, for a wrong or criminal purpose. There is also no showing that the he
intentionally defied the lawful orders or regulations of the company.
It was very possible that the discrepancies found in the documents reflecting Ramirez’ transactions as an
acting salesman could very well have been due to simple inadvertence and the fact that the customers,
who for some reason failed to pay their accounts with exact cash but instead partly with empty bottles,
later misplaced their copy of the invoice. Thus, their copy could not be corrected seasonably. The
recording was very likely bungled further by his lack of training and familiarity with the strict recording
procedures.

Re loss of trust and confidence

Requisites:
1. The loss of confidence must not be simulated;
2. It should not be used as a subterfuge for causes which are illegal, improper or unjustified;
3. It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary;
4. It must be genuine, not a mere afterthought, to justify earlier action taken in bad faith; and
5. The employee involved holds a position of trust and confidence.

Loss of trust and confidence as a just cause for termination of employment is premised on the fact that
the employee concerned holds a position of responsibility or trust and confidence. As such, he must be
invested with confidence on delicate matters, such as the custody handling or care and protection of the
property and assets of the employer. In order to constitute a just cause for dismissal, the act complained
of must be work-related. It must be shown that the employee is unfit to continue to work for the
employer. Further, well-settled is the rule that for loss of trust and confidence to be a valid ground for
dismissal of an employee, it must be substantial and founded on clearly established facts sufficient to
warrant the employees separation from employment.

Here, the court held that salesmen are highly individualistic personnel who have to be trusted and left
essentially on their own. A high degree of confidence is reposed on them because they are entrusted
with funds or properties of their employer. However, the designation of the Ramirez, who was
employed as driver-helper, but temporarily assigned as route salesman for a period of three (3) days, did
not automatically make him an employee on whom company reposed trust and confidence, for breach
of which he shall be meted the penalty of dismissal. Despite his additional duties, Ramirez remained a
driver-helper of the company. Thus, he cannot be dismissed pursuant to Article 282 of the Labor Code.

Rivera vs Espiritu
GR 135547

Facts:
PAL was suffering from a difficult financial situation in 1998. It was faced with bankruptcy and was
forced to adopt a rehabilitation plan and downsized its labor force by more than 1/3. PALEA (PAL
Employees Association) went on a four-day strike to protest retrenchment measures in July 1998. PAL
ceased operations on Sep 23, 1998.

PALEA board again wrote the President on Sep 28, 1998. Among others, it proposed the suspension of
the PAL-PALEA CBA for a period of ten years, subject to certain conditions. PALEA members accepted
such terms through a referendum on Oct 2, 1998. PAL resumed domestic operations on Oct 7, 1998.
Seven officers and members of PALEA filed instant petition to annul the Sep 27, 1998 agreement
entered into between PAL and PALEA.

Issue: WON negotiations may be suspended for 10 years.

Held:
YES. CBA negotiations may be suspended for 10 years.

The assailed PAL-PALEA agreement was the result of voluntary collective bargaining negotiations
undertaken in the light of the severe financial situation faced by the employer, with the peculiar and
unique intention of not merely promoting industrial peace at PAL, but preventing the latter’s closure.
There is no conflict between said agreement and Article 253-A of the Labor Code. CBA under Article
253-A of the Labor Code has a two-fold purpose. One is to promote industrial stability and predictability.
Inasmuch as the agreement sought to promote industrial peace, at the PAL during its rehabilitation, said
agreement satisfied the first purpose of said article. The other purpose is to assign specific timetable,
wherein negotiations become a matter of right and requirement. Nothing in Article 253-A prohibits the
parties from waiving or suspending the mandatory timetable and agreeing on the remedies to enforce
the same.

VICENTE S. ALMARIO v. PHILIPPINE AIRLINES, INC.

532 SCRA 614 (2007)

Courts will not allow one party to enrich himself at the expense of another.

 On April 28, 1995, Almario, then about 39 years of age and a Boeing 737 (B-737) First Officer at
PAL, successfully bid for the higher position of Airbus 300 (A-300) First Officer.
 Since said higher position required additional training, he underwent, at PAL‘s expense, more
than five months of training consisting of ground schooling in Manila and flight simulation in
Melbourne, Australia.
  After completing the training course, Almario served as A-300 First Officer of PAL, but after eight
months of service as such, he tendered his resignation, for ―personal reasons.‖
 Despite a letter coming from PAL to reconsider his resignation otherwise he will bear the cost of
training, Mr. Almario still proceeded with his resignation.
Later on, PAL filed a Complaint against Almario before the Regional Trial Court(RTC), for
reimbursement of P851,107 worth of training costs, attorney‘s fees equivalent to 20% of the
said amount, and costs of litigation.
 PAL invoked the existence of an innominate contract of do ut facias (I give that you may do) with
Almario in that by spending for his training, he would render service to it until the costs of
training were recovered in at least three (3) years.
 Almario having resigned before the 3-year period, PAL prayed that he should be ordered to
reimburse the costs for his training. In his Answer, Almario denied the existence of any
agreement with PAL that he would have to render service to it for three years after his training
failing which he would reimburse the training costs.
 He pointed out that the Collective Bargaining Agreement (CBA) between PAL and the Airline
Pilot‘s Association of the Philippines (ALPAP), of which he was a member, carried no such
agreement.
Mr. Almario‘s contention was confirmed by the RTC but was reversed by
the Courtof Appeals (CA).
 The CA found Almario liable under the CBA between PAL and ALPAP and, in any event, under
Article 22 of the Civil Code. Thus, this action for review on Certiorari by Mr. Almario.

ISSUE:
Whether or not the act of Mr. Almario is in violation of the CBA.

HELD:
Article XXIII, Section 1 of the CBA provides that pilots fifty-seven (57) years of age shall be frozen in their
position and shall not be permitted to occupy any position in the company‘s turbo-jet fleet. The reason
why pilots who are 57 years of age are no longer qualified to bid for a higher position is because they
have only three (3) years left before the mandatory retirement age of 60 and to send them to training at
that age, PAL would no longer be able to recover whatever training expenses it will have to incur.

Simply put, the foregoing provision clearly and unequivocally recognizes the prohibitive
training cost principle such that it will take a period of at least three (3) years before PAL could recover
from the training expenses it incurred.

Admittedly, PAL invested for the training of Almario to enable him to acquire a higher level of skill,
proficiency, or technical competence so that he could efficiently discharge the position of A-300 First
Officer. Given that, PAL expected to recover the training costs by availing of Almario‘s services for at
least three years. The expectation of PAL was not fully realized, however, due to Almario‘s resignation
after only eight months of service following the completion of his training course. He cannot, therefore,
refuse to reimburse the costs of training without violating the principle of unjust enrichment.
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS VS. QUISUMBING

FACTS:
 The private respondent, International School, Inc. pursuant to Presidential Decree 732, is a
domestic educational institution established primarily for dependents of foreign diplomatic
personnel and other temporary residents.
 The school grants foreign-hires certain benefits not accorded to local hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign hires
are also paid a salary rate twenty-five percent (25%) more than local hires. The School justifies
the difference on two “significant economic disadvantages” foreign-hires have to endure,
namely (a) the “dislocation factor” and (b) limited tenure.
 The compensation scheme is simply the School’s adaptive measure to remain competitive on an
international level in terms of attracting competent professionals in the field of international
education.
 Local hires filed a petition claiming that point-of-hire classification employed by the School is
discriminatory to Filipinos and that the grant of higher salaries to foreign-hires constitutes racial
discrimination.

ISSUE: Whether or not the School’s system of compensation is violative of the principle of “equal pay for
equal work”

RULING: Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135,
for example, prohibits and penalizes the payment of lesser compensation to female employees as
against a male employee for work of equal value. Art. 248 declares it an unfair labor practice for an
employer to discriminate in regard to wages in order to encourage or discourage membership in an
labor organization.

Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should paid similar salaries. If an employer accords employees the same position and rank,
the presumption is that these employees perform equal work. This presumption is borne by logic and
human experience. If the employer has discriminated against an employee, it is for the employer to
explain why the employee is treated unfairly.

The employer in this case had failed to do so. There is no evidence here that foreign-hires perform 25%
more efficiently or effectively than local-hires. Both groups have similar functions and responsibilities,
which they perform under similar working conditions.

BANKARD, INC. vs. NLRC- FIRST DIVISION, PAULO BUENCONSEJO,BANKARD EMPLOYEES UNION-
AWATU G.R. No. 171664, 6 March 2013

FACTS:
The issue started when Bankard implemented Manpower Rationalization Program (MRP), to further
enhance its efficiency and be more competitive in the credit card industry, invitating to the employees
to tender their voluntary resignation, with entitlement to separation pay. Thereafter, majority of one
division availed of the MRP. Thus, Bankard contracted an independent agency to handle its call center
needs.
The Union filed before the NCMB its first Notice of Strike (NOS) alleging commission of unfair labor
practices by petitioner Bankard, Inc. . Labor Secretary of the DOLE issued the order certifying the labor
dispute to the NLRC upon the Bankard’s request. The Union filed its second NOS the day after it declared
deadlock, alleging bargaining in bad faith on the part of Bankard. Bankard then again asked the Office of
the Secretary of Labor to assume jurisdiction, which was granted and certified the labor dispute to the
NLRC.

ISSUE:
Whether job contractualization or outsourcing or contracting-out is an unfair labor practice considering
there was no bad faith.

RULING:
No. Aside from the bare allegations of the Union, nothing in the records strongly proves that Bankard
intended its program, the MRP, as a tool to drastically and deliberately reduce union membership.
Contrary to the findings and conclusions of both the NLRC and the CA, there was no proof that the
program was meant to encourage the employees to disassociate themselves from the Union or to
restrain them from joining any union or organization. There was no showing that it was intentionally
implemented to stunt the growth of the Union or that Bankard discriminated, or in any way singled out
the union members who had availed of the retirement package under the MRP. True, the program
might have affected the number of union membership because of the employees’ voluntary resignation
and availment of the package, but it does not necessarily follow that Bankard indeed purposely sought
such result. It must be recalled that the MRP was implemented as a valid cost-cutting measure, well
within the ambit of the so-called management prerogatives. Bankard contracted an independent agency
to meet business exigencies. In the absence of any showing that Bankard was motivated by ill will, bad
faith or malice, or that it was aimed at interfering with its employees’ right to self-organize, it cannot be
said to have committed an act of unfair labor practice. The Court has ruled that the prohibited acts
considered as ULP relate to the workers’ right to self-organization and to the observance of a CBA. It
refers to “acts that violate the workers’ right to organize.” Without that element, the acts, even if unfair,
are not ULP. Thus, an employer may only be held liable for unfair labor practice if it can be shown that
his acts affect in whatever manner the right of his employees to self-organize.

Law on unfair labor practices is not intended to deprive employers of their fundamental right to
prescribe and enforce such rules as they honestly believe to be necessary to the proper, productive and
profitable operation of their business. Contracting out of services is an exercise of business judgment or
management prerogative. Absent any proof that management acted in a malicious or arbitrary manner,
the Court will not interfere with the exercise of judgment by an employer.

PEPSI-COLA PRODUCTS PHILIPPINES, INC., Petitioner, vs. ANECITO MOLON, AUGUSTO TECSON,
JONATHANVILLONES, BIENVENIDO LAGARTOS, JAIME CADION,EDUARDO TROYO, RODULFO
MENDIGO, AURELIOMORALITA, ESTANISLAO MARTINEZ, REYNALDOVASQUEZ, ORLANDO
GUANTERO, EUTROPIOMERCADO, FRANCISCO GABON, ROLANDO ARANDIA,REYNALDO TALBO,
ANTONIO DEVARAS, HONORATOABARCA, SALVADOR MAQUILAN, REYNALDOANDUYAN, VICENTE
CINCO, FELIX RAPIZ, ROBERTOCATAROS, ROMEO DOROTAN, RODOLFO ARROPE,DANILO
CASILAN, and SAUNDER SANTIAGOREMANDABAN III, Respondents.
G.R. No. 175002 February 18, 2013
FACTS:
 In 1999, Pepsi adopted a company-wide retrenchment program denominated as Corporate
Rightsizing Program.
 On July 13, 1999, Pepsi notified the DOLE of the initial batch of forty-seven (47) workers to be
retrenched. Among these employees were six (6) elected officers and twenty-nine (29) active
members of the LEPCEU-ALU, including herein respondents.
 On July 19, 1999, LEPCEU-ALU filed a Notice of Strike before the National Conciliation and
Mediation Board (NCMB) due to Pepsi’s alleged acts of union busting/ULP. It claimed that
Pepsi’s adoption of the retrenchment program was designed solely to bust their union so that
come freedom period, Pepsi’s company union, the Leyte Pepsi-Cola Employees Union-Union
de Obreros de Filipinas, would garner the majority vote to retain its exclusive bargaining status.

ISSUE:
Whether Pepsi committed ULP in the form of union busting

HELD:
NO .Under Article 276(c) of the Labor Code, there is union busting when the existence of the union is
threatened by the employer’s act of dismissing the former’s officers who have been duly-elected in
accordance with its constitution and by-laws. On the other hand, the term unfair labor practice refers to
that gamut of offenses defined in the Labor Code which, at their core, violates the constitutional right of
workers and employees to self-organization, with the sole exception of Article 257(f) (previously Article
248[f]). Unfair labor practice refers to acts that violate the workers' right to organize. The prohibited
acts are related to the workers' right to self-organization and to the observance of a CBA. Without that
element, the acts, no matter how unfair, are not unfair labor practices. The only exception is Article
257(f).

T&H Shopfitters v. T&H Shopfitters Union

On February 26, 2014, our Supreme Court promulgated its decision in T&H Shopfitters Corp., et al. v.
T&H Shopfitters Corp. Workers Union, et al., holding that the employer committed ULP upon a showing
that the latter perpetrated the following acts during the pendency of a petition for certification election
: (i) sponsoring a field trip to Zambales for its employees, to the exclusion of union members, before the
scheduled certification election; (ii) the active campaign by the sales officer of the company against the
union prevailing as a bargaining agent during the field trip; (iii) escorting its employees after the field trip
to the polling center; (iv) the continuous hiring of subcontractors performing the functions of the
employees; (v) assigning union members to the Cabangan site to work as grass cutters; and (vi) the
assignment of work on a rotational basis for union members. The high tribunal found that these acts,
taken together, reasonably support an inference that such were all orchestrated to restrict the
employees’ free exercise of their right to self-organization.

It stated that the employer’s actions prior and immediately before the scheduled certification election,
while seemingly innocuous, unduly meddled in the affairs of its employees in selecting their exclusive
bargaining representative. It likewise stressed that a certification election is the sole concern of the
workers and, consequently, the employer had no business persuading and/or assisting its employees in
this legally protected independent process of selecting their exclusive bargaining representative.
In so deciding the T&H Shopfitters case, the Supreme Court relied on jurisprudence that it had
established more than fifty (50) years ago when it declared, for the first time, that a complaint for ULP
will prosper if, and only if, the act complained of is related to union activities and directed against the
use of the right to employ or discharge as an instrument of discrimination, interference or oppression
because of one’s labor or union activities.

G.R. No. 203957; July 30, 2014

UNIVERSITY OF SANTO TOMAS FACULTY UNION, Petitioner,
vs. UNIVERSITY OF STO. TOMAS, Respondent.

The Facts
In a letter dated February 6, 2007, [USTFU] demanded from [UST], through its Rector, Fr. Ernesto M.
Arceo, O.P. ("Fr. Arceo"), remittance of the total amount of P65,000,000.00 plus legal interest thereon,
representing deficiency in its contribution to the medical and hospitalization fund ("fund") of [UST’s]
faculty members. [USTFU] also sent [UST] a letter dated February 26, 2007, accompanied by a summary
of its claims pursuant to their 1996-2001 CBA.

On March 2, 2007, Fr. Arceo informed [USTFU] that the aforesaid benefits were not meant to be given
annually but rather as a one-time allocation or contribution to the fund.[USTFU] then sent [UST] another
demand letter dated June 24, 2007 reiterating its position that [UST] is obliged to remit to the fund.
Thus, on September 5, 2007 [USTFU] filed against [UST], a complaint for unfair labor practice, as well as
for moral and exemplary damages plus attorney’s fees before the arbitration branch of the NLRC.

[UST] sought the dismissal of the complaint on the ground of lack of jurisdiction. It contended that the
case falls within the exclusive jurisdiction of the voluntary arbitratoror panel of voluntary arbitrators
because it involves the interpretation and implementation of the provisions of the CBA; and the conflict
between the herein parties must be resolved as grievance under the CBA and not as unfair labor
practice.

In 24 September 2010, the LA ordered the (UST) to remit P18,000,000.00 to the hospitalization and
medical benefits fund. The other claims were dismissed for lack of merit. In 8 June 2011, the NLRC
ordered UST to remit to the University of Santo Tomas Faculty Union (USTFU) the amounts of
P80,000,000.00 for the fund pursuant to the CBA. The NLRC denied UST’s motion for reconsideration for
lack of merit.

In its 13 July 2012 decision, the CA found grave abuse of discretion on the part of NLRC and set aside the
decisions. The CA denied USTFU’s motion for reconsideration for lack of merit.

The Issues
Whether or not NLRC committed grave abuse of discretion in hearing the case and and in giving an
award not prayed for in petitioner USTFU’s complain

The Court’s Ruling

The petition has no merit. SC affirms with modification the ruling of the CA. The Labor Arbiter has no
jurisdiction over the present case. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have
original and exclusive jurisdiction over money claims "arising from the interpretation or implementation
of the Collective Bargaining Agreement and, those arising fromthe interpretation or enforcement of
company personnel policies," under Article 261.

USTFU’s claims under the 1996-2001 CBA, whether characterized as one for unfair labor practice or for
money claims from employer-employee relations, have already prescribed when USTFU filed a
complaint before the LA.

The 1996-2001 CBA established the fund, with an initial remittance of P2, 000, 000. 00 for school year
1996-1997. UST bound itself to augment the fund by contributing P1,000,000.00 per year for school
years 1997-1998 and 1998-1999. The 1999 Memorandum of Agreement merely stated that UST will
deposit P4,000,000.00 to the fund. UST faithfully followed the clear provisions of the agreements.
ME-SHURN CORPORATION v. ME-SHURN WORKERS UNION448 SCRA 41PANGANIBAN;

FACTS:
 The regular rank and file employees of Me-Shurn Corporation organized Me-Shurn Workers
Union-FSM, an affiliate of the February Six Movement (FSM).
 Respondent union had a pending application for registration with the BLR.Ten days later,
petitioner corporation started placing on forced leave all the rank and file employees who were
members of the union‘s bargaining unit.
 Respondent union filed a Petition for Certification Election with the Med-Arbitration Unit of the
DOLE. The corporation filed a comment stating that it would temporarily lay off employees and
cease operations, on account of its alleged inability to meet the export quota required by the
Board of Investment.
 While the Petition was pending, 184 union members allegedly submitted are
traction/withdrawal thereof. The med-arbiter dismissed the Petition. DOL Undersecretary
granted the union‘s appeal and ordered the holding of a certification election among the rank
and file employees of the corporation.
 Respondent union filed a Notice of Strike against petitioner corporation onthe ground of unfair
labor practice (illegal lockout and union busting). – Chou Fang Kuen (alias Sammy Chou, the
other petitioner herein) and Raquel Lamayra (the Filipino administrative manager of the
corporation) imposed a precondition for the resumption of operation and the rehiring of laid off
workers. He allegedly required the remaining union officers to sign an Agreement containing a
guarantee that upon their return to work, no union or labor organization would be organized.
Instead, the union officers were to serve as mediators between labor and management.
 The union reorganized and elected a new set of officers. Respondent Rosalina Cruz was elected
president. Thereafter, it filed two Complaints charging petitioner corporation with unfair labor
practice, illegal dismissal, underpayment of wages and deficiency in separation pay, for which
they prayed for damages and attorney‘s fees.
 The corporation countered that because of economic reversals, it was compelled to close and
cease its operations to prevent serious business losses; that under Article 283 of the Labor Code,
it had the right to do so; that in August 1998, it had paid its 342 laid off employees separation
pay and benefits in the total amount of P1,682,863.88; and that by virtue of these payments,
the cases had already become moot and academic. It also averred that its resumption of
 operations in September 1998 had been announced and posted at the Bataan Export Processing
Zone, and that some of the former employees had reapplied.

ISSUE:
1. WON the dismissal of the employees of petitioner Me-shurn Corporation is for an authorized
cause.
2. WON the respondents can maintain a suit against petitioners.

HELD:

1. NO.
The reason invoked by petitioners to justify the cessation of corporate operations was alleged business
losses.

Yet, other than generally referring to the financial crisis in 1998 and to their supposed difficulty in
obtaining an export quota, interestingly, they never presented any report on the financial operations of
the corporation during the period before its shutdown. Neither did they submit any credible evidence to
substantiate their allegation of business losses. – Basic is the rule in termination cases that the employer
bears the burden of showing that the dismissal was for a just or authorized cause. Otherwise, the
dismissal is deemed unjustified.

Apropos this responsibility, petitioner corporation should have presented clear and convincing evidence
of imminent economic or business reversals as a form of affirmative defense in the proceedings before
the labor arbiter, under justifiable circumstances, even on appeal with the NLRC.

2. YES.
The DOLE would not have entertained the Petition if the union were not a legitimate labor organization
within the meaning of the Labor Code. Under this Code, in an unorganized establishment, only a
legitimate union may file a petition for certification election.

Hence, while it is not clear from the record whether respondent union is legitimate organization, we are
not readily inclined to believe otherwise especially in the light of the pro-labor policies enshrined in the
Constitution and the Labor Code.

Verily, the union has the requisite personality to sue in its own name in order to challenge the unfair
labor practice committed by petitioners against it and its members.

It would be an unwarranted impairment of the right to self-organization through formation of labor

associations if thereafter such collective entities would be barred from instituting action in their
representative capacity.

Finally, in view of the discriminatory acts committed by petitioners against respondent union prior to
the holding of the certification election– acts that included their immediate grant of exclusive
recognition to another union as a bargaining agent despite the pending Petition for certification election
–the results of that election cannot be said to constitute a repudiation by the affected employees of the
union‘s right to represent them in the present case.
DISPOSITION:
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED
Digital Telecommunications vs. Digitel Employees Union
G.R. Nos. 184903-04 | October 10, 2012 | Perez, J.

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 jurisdiction 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
 Digitel 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 Union’s 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 Digitel’s 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 Union’s 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 Labor’s Order for Digitel to commence CBA negotiations with the
Union and emphasized that the pendency of a petition for the cancellation of a union’s
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 jurisdiction over the case despite pending petition for
cancellation of union registration?  NO.
2. WON Digiserv is a legitimate contractor?  YES
3. WON there was valid dismissal  NO

RATIO
1. WON  NO, the SOLE did not err in assuming jurisdiction
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 union’s 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.

2. WON  YES Digiserv is a legitimate contractor

a. Article 106 of the Labor Code defines labor-only contracting as “supplying workers to an
employer [who] does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers recruited and
 placed by such person are performing activities which are directly related to the principal
business of such employer.”
b. This was expounded by the IRR.
c. After an exhaustive review of the records, there is no showing that first, Digiserv has
substantial investment in the form of capital, equipment or tools. Under the
Implementing Rules, substantial capital or investment refers to “capital stocks and
subscribed capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or service contracted
out.”

3. WON  NO, there was no valid dismissal

a. The affected employees were illegally dismissed.
i. the remaining affected employees, except for two (2), were already hired by
DIGITEL even before the existence of DIGISERV
ii. the remaining, affected employees continuously held the position of Customer
Service Representative, which was earlier known as Traffic Operator, from the
time they were appointed on March 1, 1994 until they were terminated on May
30, 2005.
b. As an alternative argument, Digitel maintains that the affected employees were validly
dismissed on the grounds of closure of Digiserv, a department within Digitel.
i. Waterfront Cebu vs. Jimenez: the closure of a department or division of a
company as retrenchment. Valid retrenchment: (1) reasonably necessary and
likely to prevent business losses which, if already incurred, are serious,
substantial or real; (2) employer served written notice both to the employees
and to the DOLE; (3) employer pays the retrenched employees separation pay;
(4) employer exercises its prerogative to retrench employees in good faith for
the advancement of its interest and not to defeat or circumvent the employees’
right to security of tenure; and (5) employer used fair and reasonable criteria in
ascertaining who would be dismissed and who would be retained among the
employees.
ii. Here, only the first 3 elements of a valid retrenchment had been here satisfied.
5th criteria did not apply because all employees under Digiserv were dismissed.
The 4th also does not. There was no GF in this retrenchment.
c. There was no GF in the retrenchment.
i. Prior to the cessation of Digiserv’s operations, the Secretary of Labor had issued
the first assumption order to enjoin an impending strike. When Digiserv effected
the dismissal of the affected employees, the Union filed another notice of strike
because of this, SOLE ordered that the second notice of strike be subsumed by
the previous assumption order. The effect of the assumption order is two-fold:
1. It enjoins an impending strike on the part of the employees and orders
the employer to maintain the status quo.
ii. Digitel defied the assumption order by abruptly closing down Digiserv. The
closure of a department is not illegal per se. What makes it unlawful is when the
closure is undertaken in bad faith.
1. St. John Academy vs. St. John Academy Faculty and Employees Union: BF
was evidenced by the timing of and reasons for the closure and the
timing of and reasons for the subsequent opening.
 2. Here, bad faith was manifested by the timing of the closure of Digiserv
and the rehiring of some employees to Interactive Technology
Solutions, Inc. (I-tech), a corporate arm of Digitel. The assumption order
directs employees to return to work, and the employer to reinstate the
employees. The existence of the assumption order should have
prompted Digitel to observe the status quo. Instead, Digitel proceeded
to close down Digiserv. The Secretary of Labor had to subsume the
second notice of strike in the assumption order. This order
notwithstanding, Digitel proceeded to dismiss the employees.
3. Thus, the closure of Digiserv pending the existence of an assumption
order coupled with the creation of a new corporation performing similar
functions as Digiserv leaves no iota of doubt that the target of the
closure are the union member-employees. These factual circumstances
prove that Digitel terminated the services of the affected employees to
defeat their security of tenure. The termination of service was not a
valid retrenchment; it was an illegal dismissal of employees.
iii. 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.
iv. Under Article 279 of the Labor Code, an illegally dismissed employee is entitled
to backwages and reinstatement (or separation pay, when reinstatement is not
possible as in this case)
1. There is no finding, and the Union makes no such assertion, that Digiserv
and I-tech are one and the same corporation. The timing of Digiserv’s
closure and I-tech’s ensuing creation is doubted, not the legitimacy of I-
tech as a business process outsourcing corporation providing both
inbound and outbound services to an expanded local and international
clientele.
2. no basis to direct reinstatement of the affected employees to an
ostensibly different corporation. The surrounding circumstance of the
creation of I-tech point to bad faith on the part of Digitel, as well as
constitutive of unfair labor practice in targeting the dismissal of the
union member-employees. However, this bad faith does not contradict,
much less negate, the impossibility of the employees’ reinstatement
because Digiserv has been closed and no longer exists.
3. Additionally, the employees has been dismissed for more than 7 years.
4. Finally, an illegally dismissed employee should be awarded moral and
exemplary damages as their dismissal was tainted with unfair labor
practice.

DECISION
 Petition denied
EMPLOYEES UNION OF BAYER PHILS.vs. BAYER PHILIPPINES, INC., ET. AL G.R. No. 16294, 6 December
2010

FACTS:
During the negotiations, EUBP rejected Bayer’s 9.9% wage-increase proposal resulting in a bargaining
deadlock. And the former staged a strike, prompting the Secretary of DOLE to assume jurisdiction over
the dispute. Pending the resolution of the dispute, respondent Avelina Remigio (Remigio) and 27 other
union members, without any authority from their union leaders, accepted Bayer’s wage-increase
proposal. EUBP’s grievance committee questioned Remigio’s action and reprimanded Remigio and her
allies. After a while, the DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a
CBA.

Meanwhile, barely six months from the signing of the new CBA, during a company-sponsored seminar,6
Remigio solicited signatures from union members in support of a resolution. containing the decision of
the signatories to: (1) disaffiliate from FFW, (2) rename the union as Reformed Employees Union of
Bayer Philippines (REUBP), (3) adopt a new constitution and by-laws for the union, (4) abolish all existing
officer positions in the union and elect a new set of interim officers, and (5) authorize REUBP to
administer the CBA between EUBP and Bayer.7 The said resolution was signed by 147 of the 257 local
union members. A subsequent resolution was also issued affirming the first resolution.

A tug-of-war then ensued between the two rival groups, with both seeking recognition from Bayer and
demanding remittance of the union dues collected from its rank-and-file members. Bayer remitted the
union dues to REUBP and later on they agreed to sign a new CBA. LA and NLRC dismissed the complaints
for ULP on the ground of lack of jurisdiction.

ISSUE:
Whether or not an employer commits ULP when it signed a new CBA with a new union considering there
is an existing valid CBA.

RULING:
Yes. In the case at bar, the Supreme Court ruled that it must be remembered that a CBA is entered into
in order to foster stability and mutual cooperation between labor and capital. An employer should not
be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously
contracted with, and decide to bargain anew with a different group if there is no legitimate reason for
doing so and without first following the proper procedure. If such behavior would be tolerated,
bargaining and negotiations between the employer and the union will never be truthful and meaningful,
and no CBA forged after arduous negotiations will ever be honored or be relied upon.

On the matter of damages prayed for by the petitioners, we have held that as a general rule, a
corporation cannot suffer nor be entitled to moral damages. A corporation, and by analogy a labor
organization, being an artificial person and having existence only in legal contemplation, has no feelings,
no emotions, no senses; therefore, it cannot experience physical suffering and mental anguish. Mental
suffering can be experienced only by one having a nervous system and it flows from real ills, sorrows,
and griefs of life – all of which cannot be suffered by an artificial, juridical person.
Bisig Manggagawa Sa Tryco v. NLRC (G.R. No. 151309)

Facts:
Tryco Pharma Corporation, manufacturer of veterinary medicines with principal office in Caloocan City,
and petitioner union Bisig Manggagawa Sa Tryco (BMT), the exclusive bargaining representative of the
rank-and-file employees, signed separate Memoranda of Agreement providing for a compressed
workweek schedule to be implemented in the company. BMT and Tryco negotiated for the renewal of
their CBA but failed to arrive at a new agreement. Meanwhile, Tryco received a letter from the Bureau
of Animal Industry of the Department of Agriculture reminding the former that its production should be
conducted in Bulacan City and not in Caloocan City. Accordingly, Tryco issued a memo directing
petitioners herein who are members of BMT to report to the plant site in Bulacan. Contending that the
transfer of its members constitutes unfair labor practice, BMT declared a strike. Later, petitioner
employees filed separate complaints for illegal dismissal and added that the transfer of petitioners to
the Bulacan site is intended to paralyze the union. LA dismissed the complaint. NLRC and CA affirmed.

Issues:
(1) Whether the transfer of petitioners amounted to constructive dismissal; and
(2) Whether the transfer of petitioners amounted to unfair labor practice.

Ruling:
BOTH NO
(1) Management’s prerogative of transferring and reassigning employees from one area of operation to
another in order to meet the requirements of the business is, therefore, generally not constitutive of
constructive dismissal. Thus, the consequent transfer of Tryco’s personnel, assigned to the Production
Department was well within the scope of its management prerogative. When the transfer is not
unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demotion in
rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it
amounts to a constructive dismissal. However, the employer has the burden of proving that the transfer
of an employee is for valid and legitimate grounds.

Indisputably, in the instant case, the transfer orders do not entail a demotion in rank or diminution of
salaries, benefits and other privileges of the petitioners. The Court has previously declared that mere
incidental inconvenience is not sufficient to warrant a claim of constructive dismissal. Objection to a
transfer that is grounded solely upon the personal inconvenience or hardship that will be caused to the
employee by reason of the transfer is not a valid reason to disobey an order of transfer. The distance
from Caloocan to San Rafael, Bulacan is not considerably great so as to compel petitioners to seek living
accommodations in the area and prevent them from commuting to Metro Manila daily to be with their
families.

(2) We cannot see how the mere transfer of its members can paralyze the union. The union was not
deprived of the membership of the petitioners whose work assignments were only transferred to
another location. More importantly, there was no showing or any indication that the transfer orders
were motivated by an intention to interfere with the petitioners’ right to organize. Unfair labor practice
refers to acts that violate the workers’ right to organize. With the exception of Article 248(f) of the Labor
Code of the Philippines, the prohibited acts are related to the workers’ right to self-organization and to
the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor
practices.