Labrel Cases 3rd

8/2/2019 Labrel Cases 3rd

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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 150896 August 28, 2008

PUREFOODS CORPORATION, petitioner,vs.NAGKAKAISANG SAMAHANG MANGGAGAWA NG PUREFOODS RANK-AND-FILE, ST. THOMAS FREE WORKERS UNION, PUREFOODSGRANDPARENT FARM WORKERS UNION and PUREFOODS UNIFIEDLABOR ORGANIZATION, respondents.

D E C I S I O N

NACHURA, J.:

The petitioner, Purefoods Corporation, in this Rule 45 petition seeks thereversal of the appellate courts dismissal of itscertioraripetition, and ourconsequent review of the labor commissions finding that it committed unfairlabor practice and illegally dismissed the concerned union members.

Three labor organizations and a federation are respondents in this case

Nagkakaisang Samahang Manggagawa Ng Purefoods Rank-And-File(NAGSAMA-Purefoods), the exclusive bargaining agent of the rank-and-file workers of Purefoods meat division throughout Luzon; St. Thomas FreeWorkers Union (STFWU), of those in the farm in Sto. Tomas, Batangas; andPurefoods Grandparent Farm Workers Union (PGFWU), of those in thepoultry farm in Sta. Rosa, Laguna. These organizations were affiliates of therespondent federation, Purefoods Unified Labor Organization (PULO).

1

On February 8, 1995, NAGSAMA-Purefoods manifested to petitionercorporation its desire to re-negotiate the collective bargaining agreement

(CBA) then due to expire on the 28th of the said month. Together with itsdemands and proposal, the organization submitted to the company itsJanuary 28, 1995 General Membership Resolution approving and supportingthe unions affiliation with PULO, adopting the draft CBA proposals of thefederation, and authorizing a negotiating panel which included among others aPULO representative. While Purefoods formally acknowledged receipt of theunions proposals, it refused to recognize PULO and its participation, even as
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a mere observer, in the negotiation. Consequently, notwithstanding the PULOrepresentatives non-involvement, the negotiation of the terms of the CBA stillresulted in a deadlock. A notice of strike was then filed by NAGSAMA-Purefoods on May 15, 1995. In the subsequent conciliation conference, thedeadlock issues were settled except the matter of the companys recognition

of the unions affiliation with PULO.2

In the meantime, STFWU and PGFWU also submitted their respectiveproposals for CBA renewal, and their general membership resolutions which,among others, affirmed the two organizations affiliation with PULO.Consistent with its stance, Purefoods refused to negotiate with the unionsshould a PULO representative be in the panel. The parties then agreed topostpone the negotiations indefinitely.

3

On July 24, 1995, however, the petitioner company concluded a new CBA

with another union in its farm in Malvar, Batangas. Five days thereafter, or onJuly 29, 1995, at around 8:00 in the evening, four company employeesfacilitated the transfer of around 23,000 chickens from the poultry farm in Sto.Tomas, Batangas (where STFWU was the exclusive bargaining agent) to thatin Malvar. The following day, the regular rank-and-file workers in the Sto.Tomas farm were refused entry in the company premises; and on July 31,1995, 22 STFWU members were terminated from employment. The farmmanager, supervisors and electrical workers of the Sto. Tomas farm, whowere members of another union, were nevertheless retained by the companyin its employ.

4

Aggrieved by these developments, the four respondent labor organizationsjointly instituted a complaint for unfair labor practice (ULP), illegallockout/dismissal and damages, docketed as NLRC Case No. NLRC-NCR-00-07-05159-95, with the Labor Arbitration Branch of the National LaborRelations Commission (NLRC).

5

In the proceedings before the Labor Arbiter (LA), Purefoods interposed,among others, the defenses that PULO was not a legitimate labororganization or federation for it did not have the required minimum number ofmember unions; that the closure of the Sto. Tomas farm was not arbitrary butwas the result of the financial non-viability of the operations therein, or theconsequence of the landowners pre-termination of the lease agreement; thatthe other complainants had no cause of action considering that it was only theSto. Tomas farm which was closed; that the termination of the employeescomplied with the 30-day notice requirement and that the said employeeswere paid 30-day advance salary in addition to separation pay; and that the
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concerned union, STFWU, lost its status as bargaining representative whenthe Sto. Tomas farm was closed.

6

On August 17, 1999, the LA rendered a Decision7dismissing the complaint,

and declaring that the company neither committed ULP nor illegally dismissed

the employees.

On appeal, the NLRC reversed the ruling of the LA, ordered the paymentof P500,000.00 as moral and exemplary damages and the reinstatement withfull backwages of the STFWU members. In its March 16, 2001 Decision (CANo. 022059-00), the labor commission ruled that the petitioner companysrefusal to recognize the labor organizations affiliation with PULO wasunjustified considering that the latter had been granted the status of afederation by the Bureau of Labor Relations; and that this refusal constitutedundue interference in, and restraint on the exercise of the employees right to

self-organization and free collective bargaining. The NLRC said that the realmotive of the company in the sudden closure of the Sto. Tomas farm and themass dismissal of the STFWU members was union busting, as only the unionmembers were locked out, and the company subsequently resumedoperations of the closed farm under a new contract with the landowner.Because the requisites of a valid lockout were absent, the NLRC concludedthat the company committed ULP. The dispositive portion of the NLRCdecision reads:

WHEREFORE, respondent Purefoods Corporation is hereby directed toreinstate effective October 1, 2000 employees-members of the STFWU-PULO who were illegally locked out on July 30, 1995 and to pay themtheir full backwages.

SO ORDERED.

Its motion for reconsideration having been denied,8the petitioner corporation

filed a Rule 65 petition before the Court of Appeals (CA) docketed as CA-G.R.SP No. 66871.

In the assailed October 25, 2001 Resolution,9the appellate court dismissedoutright the companys petition forcertiorarion the ground that the verificationand certification of non-forum shopping was defective since no proof ofauthority to act for and on behalf of the corporation was submitted by thecorporations senior vice-president who signed the same; thus, the petitioncould not be deemed filed for and on behalf of the real party-in-interest. Then,
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the CA, in its November 22, 2001 Resolution,10

denied petitioners motion forreconsideration of the dismissal order.

Dissatisfied, petitioner instituted before us the instant petition for reviewon certiorariunder Rule 45.

The petition is denied.

Section 1, Rule 65 of the Rules of Court explicitly mandates that the petitionfor certiorarishall be accompanied by a sworn certification of non-forumshopping.

11When the petitioner is a corporation, inasmuch as corporate

powers are exercised by the board, the certification shall be executed by anatural person authorized by the corporations board of directors.

12Absent

any authority from the board, no person, not even the corporate officers, canbind the corporation.

13Only individuals who are vested with authority by a

valid board resolution may sign the certificate of non-forum shopping in behalfof the corporation, and proof of such authority must be attached to thepetition.

14Failure to attach to the certification any proof of the signatorys

authority is a sufficient ground for the dismissal of the petition.15

In the instant case, the senior vice-president of the petitioner corporationsigned the certificate of non-forum shopping. No proof of his authority to signthe said certificate was, however, attached to the petition. Thus, applyingsettled jurisprudence, we find that the CA committed no error when itdismissed the petition.

The Court cannot even be liberal in the application of the rules becauseliberality is warranted only in instances when there is substantial compliancewith the technical requirements in pleading and practice, and when there issufficient explanation that the non-compliance is for a justifiable cause, suchthat the outright dismissal of the case will defeat the administration ofjustice.

16Here, the petitioner corporation, in its motion for reconsideration

before the appellate court and in its petition before us, did not present areasonable explanation for its non-compliance with the rules. Further, itcannot be said that petitioner substantially complied therewith, because it did

not attach to its motion for reconsideration any proof of the authority of itssignatory. It stands to reason, therefore, that this Court now refuses tocondone petitioners procedural transgression.

We must reiterate that the rules of procedure are mandatory, except onlywhen, for the most persuasive of reasons, they may be relaxed to relieve alitigant of an injustice not commensurate to the degree of his thoughtlessness
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in not complying therewith.17

While technical rules of procedure are notdesigned to frustrate the ends of justice, they are provided to effect the properand orderly disposition of cases and effectively prevent the clogging of courtdockets.

18

Be that as it may, this Court has examined the records if only to dispel anydoubt on the propriety of the dismissal of the case, and we found no abuse ofdiscretion, much more a grave one, on the part of the labor commission inreversing the ruling of the LA.

It is crystal clear that the closure of the Sto. Tomas farm was made in badfaith. Badges of bad faith are evident from the following acts of the petitioner:it unjustifiably refused to recognize the STFWUs and the other unionsaffiliation with PULO; it concluded a new CBA with another union in anotherfarm during the agreed indefinite suspension of the collective bargaining

negotiations; it surreptitiously transferred and continued its business in a lesshostile environment; and it suddenly terminated the STFWU members, butretained and brought the non-members to the Malvar farm. Petitionerpresented no evidence to support the contention that it was incurring losses orthat the subject farms lease agreement was pre-terminated. Ineluctably, theclosure of the Sto. Tomas farm circumvented the labor organizations right tocollective bargaining and violated the members right to security of tenure.

19

The Court reiterates that the petition for certiorariunder Rule 65 of the Rulesof Court filed with the CA will prosper only if there is clear showing of graveabuse of discretion or an act without or in excess of jurisdiction on the part ofthe NLRC.

20It was incumbent, then, for petitioner to prove before the

appellate court that the labor commission capriciously and whimsicallyexercised its judgment tantamount to lack of jurisdiction, or that it exercised itspower in an arbitrary or despotic manner by reason of passion or personalhostility, and that its abuse of discretion is so patent and gross as to amountto an evasion of a positive duty enjoined or to act at all in contemplation oflaw.

21Here, as aforesaid, no such proof was adduced by petitioner. We, thus,

declare that the NLRC ruling is not characterized by grave abuse of discretion.Accordingly, the same is also affirmed.

However, this Court makes the following observations and modifications:

We deem as proper the award of moral and exemplary damages. We holdthat the sudden termination of the STFWU members is tainted with ULPbecause it was done to interfere with, restrain or coerce employees in theexercise of their right to self-organization. Thus, the petitioner company is
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liable for the payment of the aforesaid damages.22

Notable, though, is that thisaward, while stated in the body of the NLRC decision, was omitted in thedispositive portion of the said ruling. To prevent any further confusion in theimplementation of the said decision, we correct the dispositive portion of theruling to include the payment of P500,000.00 as moral and exemplarydamages to the illegally dismissed STFWU members.

As to the order of reinstatement, the Court modifies the same in that if it is nolonger feasible considering the length of time that the employees have beenout of petitioners employ,

23the company is ordered to pay the illegally

dismissed STFWU members separation pay equivalent to one (1) month pay,or one-half (1/2) month pay for every year of service, whichever is higher.

24

The releases and quitclaims, as well as the affidavits of desistance,25

signedby the concerned employees, who were then necessitous men at the time of

execution of the documents, are declared invalid and ineffective. They will notbar the workers from claiming the full measure of benefits flowing from theirlegal rights.

26

WHEREFORE, premises considered, the petition for reviewon certiorariis DENIED. The October 25, 2001 and the November 22, 2001Resolutions of the Court of Appeals in CA-G.R. SP No. 66871 areAFFIRMED.The March 16, 2001 Decision of the National Labor Relations Commission inNLRC-NCR-00-07-05159-95 (CA No. 022059-00) is AFFIRMED withthe MODIFICATION that petitioner company is ordered to: (1) reinstate theillegally dismissed STFWU members and pay them full backwages from thetime of illegal termination up to actual reinstatement; (2) if reinstatement is nolonger feasible, pay the illegally dismissed STFWU members their separationpay equivalent to one month pay, or one-half month pay for every year ofservice, whichever is higher; and (3) pay moral and exemplary damages in theaggregate amount of P500,000.00 to the said illegally dismissed STFWUmembers.

SO ORDERED.
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Manila

SPECIAL THIRD DIVISION

G.R. Nos. 158930-31 March 3, 2008

UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS -KILUSANG MAYO UNO (UFE-DFA-KMU), petitioner,vs.NESTL PHILIPPINES, INCORPORATED, respondent.

x------------------------------------------x

G.R. Nos. 158944-45 March 3, 2008

NESTL PHILIPPINES, INCORPORATED, petitioner,vs.UNION OF FILIPRO EMPLOYEES - DRUG, FOOD AND ALLIED INDUSTRIES UNIONS -KILUSANG MAYO UNO (UFE-DFA-KMU), respondent.

R E S O L U T I O N

CHICO-NAZARIO, J.:

On 22 August 2006, this Court promulgated its Decision1in the above-entitled cases, thedispositive part of which reads

WHEREFORE, in view of the foregoing, the Petition in G.R. No. 158930-31 seekingthat Nestl be declared to have committed unfair labor practice in allegedly setting aprecondition to bargaining is DENIED. The Petition in G.R. No. 158944-45, however,is PARTLY GRANTED in that we REVERSE the ruling of the Court of Appeals in CAG.R. SP No. 69805 in so far as it ruled that the Secretary of the DOLE gravelyabused her discretion in failing to confine her assumption of jurisdiction power overthe ground rules of the CBA negotiations; but the ruling of the Court of Appeals onthe inclusion of the Retirement Plan as a valid issue in the collective bargainingnegotiations between UFE-DFA-KMU and Nestl is AFFIRMED. The parties aredirected to resume negotiations respecting the Retirement Plan and to take actionconsistent with the discussions hereinabove set forth. No costs.

Subsequent thereto, Nestl Philippines, Incorporated (Nestl) filed a Motion forClarification2on 20 September 2006; while Union of Filipro Employees Drug, Food andAllied Industries Union Kilusang Mayo Uno (UFE-DFA-KMU), on 21 September 2006, fileda Motion for Partial Reconsideration3of the foregoing Decision.

The material facts of the case, as determined by this Court in its Decision, may besummarized as follows:
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UFE-DFA-KMU was the sole and exclusive bargaining agent of the rank-and-file employeesof Nestl belonging to the latters Alabang and Cabuyao plants. On 4 April 2001, as theexisting collective bargaining agreement (CBA) between Nestl and UFE-DFA-KMU4was toend on 5 June 2001,5the Presidents of the Alabang and Cabuyao Divisions of UFE-DFA-KMU informed Nestl of their intent to "open [our] new Collective Bargaining Negotiation forthe year 2001-2004 x x x as early as June 2001."6In response thereto, Nestl informedthem that it was also preparing its own counter-proposal and proposed ground rules togovern the impending conduct of the CBA negotiations.

On 29 May 2001, in another letter to the UFE-DFA-KMU (Cabuyao Division only)7, Nestlreiterated its stance that "unilateral grants, one-time company grants, company-initiatedpolicies and programs, which include, but are not limited to the Retirement Plan, IncidentalStraight Duty Pay and Calling Pay Premium, are by their very nature not proper subjects ofCBA negotiations and therefore shall be excluded therefrom."8

Dialogue between the company and the union thereafter ensued.

On 14 August 2001, however, Nestl requested9the National Conciliation and MediationBoard (NCMB), Regional Office No. IV, Imus, Cavite, to conduct preventive mediationproceedings between it and UFE-DFA-KMU owing to an alleged impasse in saiddialogue; i.e., that despite fifteen (15) meetings between them, the parties failed to reachany agreement on the proposed CBA.

Conciliation proceedings proved ineffective, though, and the UFE-DFA-KMU filed a Noticeof Strike10on 31 October 2001 with the NCMB, complaining, in essence, of a bargainingdeadlock pertaining to economic issues, i.e., "retirement (plan), panel composition, costsand attendance, and CBA".11On 07 November 2001, anotherNotice of Strike12was filed bythe union, this time predicated on Nestls alleged unfair labor practices, that is, bargaining

in bad faith by setting pre-conditions in the ground rules and/or refusing to include the issueof the Retirement Plan in the CBA negotiations. The result of a strike vote conducted by themembers of UFE-DFA-KMU yielded an overwhelming approval of the decision to hold astrike.13

On 26 November 2001, prior to holding the strike, Nestl filed with the DOLE a Petition forAssumption of Jurisdiction,14praying for the Secretary of the DOLE, Hon. Patricia A. Sto.Tomas, to assume jurisdiction over the current labor dispute in order to effectively enjoinany impending strike by the members of the UFE-DFA-KMU at the Nestls Cabuyao Plantin Laguna.

On 29 November 2001, Sec. Sto. Tomas issued an Order15assuming jurisdiction over the

subject labor dispute. The fallo of said Order states that:

CONSIDERING THE FOREGOING, this Office hereby assumes jurisdiction over thelabor dispute at the Nestl Philippines, Inc. (Cabuyao Plant) pursuant to Article 263(g) of the Labor Code, as amended.
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Accordingly, any strike or lockout is hereby enjoined. The parties are directed tocease and desist from committing any act that might lead to the further deteriorationof the current labor relations situation.

The parties are further directed to meet and convene for the discussion of the unionproposals and company counter-proposals before the National Conciliation andMediation Board (NCMB) who is hereby designated as the delegate/facilitator of thisOffice for this purpose. The NCMB shall report to this Office the results of thisattempt at conciliation and delimitation of the issues within thirty (30) days from theparties receipt of this Order, in no case later than December 31, 2001. If nosettlement of all the issues is reached, this Office shall thereafter define theoutstanding issues and order the filing of position papers for a ruling on the merits.

UFE-DFA-KMU sought reconsideration16of the above but nonetheless moved for additionaltime to file its position paper as directed by the Assumption of Jurisdiction Order.

On 14 January 2002, Sec. Sto. Tomas denied said motion for reconsideration.

On 15 January 2002, despite the order enjoining the conduct of any strike or lockout andconciliation efforts by the NCMB, the employee members of UFE-DFA-KMU at NestlsCabuyao Plant went on strike.

In view of the above, in an Orderdated on 16 January 2002, Sec. Sto. Tomas directed: (1)the members of UFE-DFA-KMU to return-to-workwithin twenty-four (24) hours from receiptof such Order; (2) Nestl to accept backall returning workers under the same terms andconditions existing preceding to the strike; (3) both parties to cease and desistfromcommitting acts inimical to the on-going conciliation proceedings leading to the furtherdeterioration of the situation; and (4) the submission of their respective position

paperswithin ten (10) days from receipt thereof. But notwithstanding the Return-to-WorkOrder, the members of UFE-DFA-KMU continued with their strike, thus, prompting Sec. Sto.Tomas to seek the assistance of the Philippine National Police (PNP) for the enforcement ofsaid order.

On 7 February 2002, Nestl and UFE-DFA-KMU filed their respective position papers.Nestl addressed several issues concerning economic provisions of the CBA as well as thenon-inclusion of the issue of the Retirement Plan in the collective bargaining negotiations.On the other hand, UFE-DFA-KMU limited itself to the issue of whether or not the retirementplan was a mandatory subject in its CBA negotiations.

On 11 February 2002, Sec. Sto. Tomas allowed UFE-DFA-KMU the chance to tender its

stand on the other issues raised by Nestl but not covered by its initial position paper byway of a Supplemental Position Paper.

UFE-DFA-KMU, instead of filing the above-mentioned supplement, filed several pleadings,one of which was aManifestation with Motion for Reconsideration of the Order datedFebruary 11, 2002assailing the Order of February 11, 2002 for supposedly being contraryto law, jurisprudence and the evidence on record. The union posited that Sec. Sto. Tomas"could only assume jurisdiction over the issues mentioned in the notice of strike subject of
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the current dispute,"17and that the Amended Notice of Strike it filed did not cite, as one ofthe grounds, the CBA deadlock.

On 8 March 2002, Sec. Sto. Tomas denied the motion for reconsideration of UFE-DFA-KMU.

Thereafter, UFE-DFA-KMU filed a Petition for Certiorari18before the Court of Appeals,alleging that Sec. Sto. Tomas committed grave abuse of discretion amounting to lack orexcess of jurisdiction when she issued the Orders of 11 February 2002 and 8 March 2002.

In the interim, in an attempt to finally resolve the crippling labor dispute between the parties,then Acting Secretary of the DOLE, Hon. Arturo D. Brion, came out with an Order19dated 02April 2002, ruling that:

a. we hereby recognize that the present Retirement Plan at the Nestl CabuyaoPlant is a unilateral grant that the parties have expressly so recognized subsequentto the Supreme Courts ruling inNestl, Phils. Inc. vs. NLRC, G.R. No. 90231,

February 4, 1991, and is therefore not a mandatory subject for bargaining;

b. the Unions charge of unfair labor practice against the Company is herebydismissed for lack of merit;

c. the parties are directed to secure the best applicable terms of the recentlyconcluded CBSs between Nestl Phils. Inc. and it eight (8) other bargaining units,and to adopt these as the terms and conditions of the Nestl Cabuyao Plant CBA;

d. all union demands that are not covered by the provisions of the CBAs of the othereight (8) bargaining units in the Company are hereby denied;

e. all existing provisions of the expired Nestl Cabuyao Plant CBA without anycounterpart in the CBAs of the other eight bargaining units in the Company arehereby ordered maintained as part of the new Nestl Cabuyao Plant CBA;

f. the parties shall execute their CBA within thirty (30) days from receipt of this Order,furnishing this Office a copy of the signed Agreement;

g. this CBA shall, in so far as representation is concerned, be for a term of five (5)years; all other provisions shall be renegotiated not later than three (3) years after itseffective date which shall be December 5, 2001 (or on the first day six months afterthe expiration on June 4, 2001 of the superceded CBA).

UFE-DFA-KMU moved to reconsider the aforequoted ruling, but such was subsequentlydenied on 6 May 2002.

For the second time, UFE-DFA-KMU went to the Court of Appeals via another Petitionfor Certiorariseeking to annul the Orders of 02 April 2002 and 06 May 2002 of theSecretary of the DOLE, having been issued in grave abuse of discretion amounting to lackor excess of jurisdiction.
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On 27 February 2003, the appellate court promulgated its Decision on the twin petitionsfor certiorari, ruling entirely in favor of UFE-DFA-KMU, the dispositive part thereof stating

WHEREFORE, in view of the foregoing, there being grave abuse on the part of thepublic respondent in issuing all the assailed Orders, both petitions are herebyGRANTED. The assailed Orders dated February 11, 2001, and March 8, 2001 (CA-G.R. SP No. 69805), as well as the Orders dated April 2, 2002 and May 6, 2002(CA-G.R. SP No. 71540) of the Secretary of Labor and Employment in the caseentitled: "IN RE: LABOR DISPUTE AT NESTLE PHILIPPINES INC. (CABUYAOFACTORY)" under OS-AJ-0023-01 (NCMB-RBIV-CAV-PM-08-035-01, NCMB-RBIV-LAG-NS-10-037-01, NCMB-RBIV-LAG-NS-11-10-03901) are hereby ANNULLEDand SET ASIDE. Private respondent is hereby directed to resume the CBAnegotiations with the petitioner.20

Both parties appealed the aforequoted ruling. Nestl essentially assailed that part of thedecision finding the DOLE Secretary to have gravely abused her discretion amounting tolack or excess of jurisdiction when she ruled that the Retirement Plan was not a valid issue

to be tackled during the CBA negotiations; UFE-DFA-KMU, in contrast, questioned theappellate courts decision finding Nestl free and clear of any unfair labor practice.

Since the motions for reconsideration of both parties were denied by the Court of Appeals ina joint Resolution dated 27 June 2003, UFE-DFA-KMU and Nestl separately filed theinstant Petitions for Review on Certiorariunder Rule 45 of the Rules of Court, as amended.

G.R. No. 158930-31 was filed by UFE-DFA-KMU against Nestl seeking to reverse theCourt of Appeals Decision insofar as the appellate courts failure to find Nestl guilty ofunfair labor practice was concerned; while G.R. No. 158944-45 was instituted by Nestlagainst UFE-DFA-KMU likewise looking to annul and set aside the part of the Court of

Appeals Decision declaring that: 1) the Retirement Plan was a valid collective bargainingissue; and 2) the scope of the power of the Secretary of the Department of Labor andEmployment (DOLE) to assume jurisdiction over the labor dispute between UFE-DFA-KMUand Nestl was limited to the resolution of questions and matters pertaining merely to theground rules of the collective bargaining negotiations to be conducted between the parties.

On 29 March 2004, this Court resolved21to consolidate the two petitions inasmuch as they(1) involved the same set of parties; (2) arose from the same set of circumstances, i.e., fromseveral Orders issued by then DOLE Secretary, Hon. Patricia A. Sto. Tomas, respecting herassumption of jurisdiction over the labor dispute between Nestl and UFE-DFA-KMU,Alabang and Cabuyao Divisions;22and (3) similarly assailed the same Decision andResolution of the Court of Appeals.

After giving due course to the instant consolidated petitions, this Court promulgated on 22August 2006 its Decision, now subject of UFE-DFA-KMUs Motion for PartialReconsideration and Nestls Motion for Clarification.

In its Motion for Partial Reconsideration, UFE-DFA-KMU would have this Court address anddiscuss anew points or arguments that have basically been passed upon in this Courts 22August 2006 Decision. Firstly, it questions this Courts finding that Nestl was not guilty of
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unfair labor practice, considering that the transaction speaks for itself,i.e, res ipsa loquitor.And made an issue again is the question of whether or not the DOLE Secretary can takecognizance of matters beyond the amended Notice of Strike.

As to Nestls prayer for clarification, the corporation seeks elucidation respecting thedispositive part of this Courts Decision directing herein parties to resume negotiations onthe retirement compensation package of the concerned employees. It posits that "[i]ndirecting the parties to negotiate the Retirement Plan, the Honorable Court x x x might haveoverlooked the fact that here, the Secretary of Labor had already assumed jurisdiction overthe entire 2001-2004 CBA controversy x x x."

As to the charge of unfair labor practice:

The motion does not put forward new arguments to substantiate the prayer forreconsideration of this Courts Decision except for the sole contention that the transactionspeaks for itself, i.e., res ipsa loquitor. Nonetheless, even a perusal of the arguments ofUFE-DFA-KMU in its petition and memorandum in consideration of the point heretofore

raised will not convince us to change our disposition of the question of unfair labor practice.UFE-DFA-KMU argues therein that Nestls "refusal to bargain on a very important CBAeconomic provision constitutes unfair labor practice."23It explains that Nestl set as aprecondition for the holding of collective bargaining negotiations the non-inclusion of theissue of Retirement Plan. In its words, "respondent Nestl Phils., Inc. insisted that the Unionshould first agree that the retirement plan is not a bargaining issue before respondentNestl would agree to discuss other issues in the CBA."24It then concluded that "the Courtof Appeals committed a legal error in not ruling that respondent company is guilty of unfairlabor practice. It also committed a legal error in failing to award damages to the petitionerfor the ULP committed by the respondent."25

We are unconvinced still.

The duty to bargain collectively is mandated by Articles 252 and 253 of the Labor Code, asamended, which state

ART. 252. Meaning of duty to bargain collectively. The duty to bargain collectivelymeans the performance of a mutual obligation to meet and convene promptly andexpeditiously in good faith for the purpose of negotiating an agreement with respectto wages, hours, of work and all other terms and conditions of employment includingproposals for adjusting any grievances or questions arising under such agreementand executing a contract incorporating such agreements if requested by either partybut such duty does not compel any party to agree to a proposal or to make any

concession.

ART. 253. Duty to bargain collectively when there exists a collective bargainingagreement. When there is a collective bargaining agreement, the duty to bargaincollectively shall also mean that neither party shall terminate nor modify suchagreement during its lifetime. However, either party can serve a written notice toterminate or modify the agreement at least sixty (60) days prior to its expiration date.It shall be the duty of both parties to keep the status quo and to continue in full force


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and effect the terms of conditions of the existing agreement during the 60-day periodand/or until a new agreement is reached by the parties.

Obviously, the purpose of collective bargaining is the reaching of an agreement resulting ina contract binding on the parties; but the failure to reach an agreement after negotiationshave continued for a reasonable period does not establish a lack of good faith. The statutesinvite and contemplate a collective bargaining contract, but they do not compel one. Theduty to bargain does not include the obligation to reach an agreement.

The crucial question, therefore, of whether or not a party has met his statutory duty tobargain in good faith typically turns on the facts of the individual case. As we have said,there is no per setest of good faith in bargaining. Good faith or bad faith is an inference tobe drawn from the facts. To some degree, the question of good faith may be a question ofcredibility. The effectof an employers or a unions individual actions is not the test of good-faith bargaining, but the impact of all such occasions or actions, considered as a whole, andthe inferences fairly drawn therefrom collectively may offer a basis for the finding of theNLRC.26

For a charge of unfair labor practice to prosper, it must be shown that Nestl was motivatedby ill will, "bad faith, or fraud, or was oppressive to labor, or done in a manner contrary tomorals, good customs, or public policy, and, of course, that social humiliation, woundedfeelings, or grave anxiety resulted x x x"27in disclaiming unilateral grants as proper subjectsin their collective bargaining negotiations. While the law makes it an obligation for theemployer and the employees to bargain collectively with each other, such compulsion doesnot include the commitment to precipitately accept or agree to the proposals of the other. Allit contemplates is that both parties should approach the negotiation with an open mind andmake reasonable effort to reach a common ground of agreement.

Herein, the union merely bases its claim of refusal to bargain on a letter

28

dated 29 May2001 written by Nestl where the latter laid down its position that "unilateral grants, one-time company grants, company-initiated policies and programs, which include, but are notlimited to the Retirement Plan, Incidental Straight Duty Pay and Calling Pay Premium, areby their very nature not proper subjects of CBA negotiations and therefore shall be excludedtherefrom." But as we have stated in this Courts Decision, said letter is not tantamount torefusal to bargain. In thinking to exclude the issue of Retirement Plan from the CBAnegotiations, Nestl, cannot be faulted for considering the same benefit as unilaterallygranted, considering that eight out of nine bargaining units have allegedly agreed to treatthe Retirement Plan as a unilaterally granted benefit. This is not a case where the employerexhibited an indifferent attitude towards collective bargaining, because the negotiationswere not the unilateral activity of the bargaining representative. Nestls desire to settle the

dispute and proceed with the negotiation being evident in its cry for compulsory arbitration isproof enough of its exertion of reasonable effort at good-faith bargaining.

In the case at bar, Nestle never refused to bargain collectively with UFE-DFA-KMU. Thecorporation simply wanted to exclude the Retirement Plan from the issues to be taken upduring CBA negotiations, on the postulation that such was in the nature of a unilaterallygranted benefit. An employers steadfast insistence to exclude a particular substantiveprovision is no different from a bargaining representatives perseverance to include one that


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they deem of absolute necessity. Indeed, an adamant insistence on a bargaining position tothe point where the negotiations reach an impasse does not establish bad faith.[fn24 p.10] Itis but natural that at negotiations, management and labor adopt positions or make demandsand offer proposals and counter-proposals. On account of the importance of the economicissue proposed by UFE-DFA-KMU, Nestle could have refused to bargain with the formerbut it did not. And the managements firm stand against the issue of the Retirement Plan didnot mean that it was bargaining in bad faith. It had a right to insist on its position to the pointof stalemate.

The foregoing things considered, this Court replicates below its clear disposition of theissue:

The concept of "unfair labor practice" is defined by the Labor Code as:

ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE AND PROCEDURE FORPROSECUTION THEREOF. Unfair labor practices violate the constitutional right ofworkers and employees to self-organization, are inimical to the legitimate interests of

both labor and management, including their right to bargain collectively andotherwise deal with each other in an atmosphere of freedom and mutual respect,disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations.

x x x x.

The same code likewise provides the acts constituting unfair labor practicescommitted by employers, to wit:

ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. It shall be unlawful

for an employer to commit any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their rightto self-organization;

(b) To require as a condition of employment that a person or an employeeshall not join a labor organization or shall withdraw from one to which hebelongs;

(c) To contract out services or functions being performed by union memberswhen such will interfere with, restrain or coerce employees in the exercise oftheir right to self-organization;

(d) To initiate, dominate, assist or otherwise interfere with the formation oradministration of any labor organization, including the giving of financial orother support to it or its organizers or supporters;

(e) To discriminate in regard to wages, hours of work, and other terms andconditions of employment in order to encourage or discourage membership inany labor organization. Nothing in this Code or in any other law shall stop the


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parties from requiring membership in a recognized collective bargaining agentas a condition for employment, except those employees who are alreadymembers of another union at the time of the signing of the collectivebargaining agreement.

Employees of an appropriate collective bargaining unit who are not membersof the recognized collective bargaining agent may be assessed a reasonablefee equivalent to the dues and other fees paid by members of the recognizedcollective bargaining agent, if such non-union members accept the benefitsunder the collective agreement. Provided, That the individual authorizationrequired under Article 242, paragraph (o) of this Code shall not apply to thenonmembers of the recognized collective bargaining agent; [The articlereferred to is 241, not 242. CAA]

(f) To dismiss, discharge, or otherwise prejudice or discriminate against anemployee for having given or being about to give testimony under this Code;

(g) To violate the duty to bargain collectively as prescribed by thisCode;

(h) To pay negotiation or attorneys fees to the union or its officers or agentsas part of the settlement of any issue in collective bargaining or any otherdispute; or

(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officersand agents of corporations associations or partnerships who have actually

participated, authorized or ratified unfair labor practices shall be heldcriminally liable. (Emphasis supplied.)

Herein, Nestl is accused of violating its duty to bargain collectively when itpurportedly imposed a pre-condition to its agreement to discuss and engage incollective bargaining negotiations with UFE-DFA-KMU.

A meticulous review of the record and pleadings of the cases at bar shows that, ofthe two notices of strike filed by UFE-DFA-KMU before the NCMB, it was only on thesecond that the ground of unfair labor practice was alleged. Worse, the 7 November2001 Notice of Strike merely contained a general allegation that Nestl committedunfair labor practice by bargaining in bad faith for supposedly "setting pre-condition

in the ground rules (Retirement issue)." (Notice of Strike of 7 November 2001; Annex"C" of UFE-DFA-KMU Position Paper; DOLE original records, p. 146.) In contrast,Nestl, in its Position Paper, did not confine itself to the issue of the non-inclusion ofthe Retirement Plan but extensively discussed its stance on other economic matterspertaining to the CBA. It is UFE-DFA-KMU, therefore, who had the burden of proof topresent substantial evidence to support the allegation of unfair labor practice.


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A perusal of the allegations and arguments raised by UFE-DFA-KMU in theMemorandum (in G.R. Nos. 158930-31) will readily disclose the need for thepresentation of evidence other than its bare contention of unfair labor practice inorder to make certain the propriety or impropriety of the ULP charge hurled againstNestl. Under Rule XIII, Sec. 4, Book V of the Implementing Rules of the LaborCode:

x x x. In cases of unfair labor practices, the notice of strike shall as far aspracticable, state the acts complained ofand the efforts to resolve thedispute amicably." (Emphasis supplied.)

In the case at bar, except for the assertion put forth by UFE-DFA-KMU, neither thesecond Notice of Strike nor the records of these cases substantiate a finding ofunfair labor practice. It is not enough that the union believed that the employercommitted acts of unfair labor practice when the circumstances clearly negate evena prima facie showing to warrant such a belief. (Tiu v. National Labor RelationsCommission, G.R. No. 123276, 18 August 1997, 277 SCRA 681, 688.)

Employers are accorded rights and privileges to assure their self-determination andindependence and reasonable return of capital. (Capitol Medical Center, Inc. v.Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) This mass ofprivileges comprises the so-called management prerogatives. (Capitol MedicalCenter, Inc. v. Meris, G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.) Inthis connection, the rule is that good faith is always presumed. As long as thecompanys exercise of the same is in good faith to advance its interest and not forpurpose of defeating or circumventing the rights of employees under the law or avalid agreement, such exercise will be upheld. (Capitol Medical Center, Inc. v. Meris,G.R. No. 155098, 16 September 2005, 470 SCRA 125, 136.)

There is no per se test of good faith in bargaining. (Hongkong Shanghai BankingCorporation Employees Union v. National Labor Relations Commission, G.R. No.125038, 6 November 1997, 281 SCRA 509, 518.) Good faith or bad faith is aninference to be drawn from the facts. (Hongkong Shanghai Banking CorporationEmployees Union v. National Labor Relations Commission, G.R. No. 125038, 6November 1997, 281 SCRA 509, 518.) Herein, no proof was presented to exemplifybad faith on the part of Nestl apart from mere allegation. Construing arguendo thatthe content of the aforequoted letter of 29 May 2001 laid down a pre-condition to itsagreement to bargain with UFE-DFA-KMU, Nestls inclusion in its Position Paper ofits proposals affecting other matters covered by the CBA negates the claim of refusalto bargain or bargaining in bad faith. Accordingly, since UFE-DFA-KMU failed to

proffer substantial evidence that would overcome the legal presumption of good faithon the part of Nestl, the award of moral and exemplary damages is unavailing.

As to the jurisdiction of the DOLE Secretary under the amended Notice of Strike:

This Court is not convinced by the argument raised by UFE-DFA-KMU that the DOLESecretary should not have gone beyond the disagreement on the ground rules of the CBA


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negotiations. The union doggedly asserts that the entire labor dispute between hereinparties concerns only the ground rules.

Lest it be forgotten, it was UFE-DFA-KMU which first alleged a bargaining deadlock as thebasis for the filing of its Notice of Strike; and at the time of the filing of the first Notice ofStrike, several conciliation conferences had already been undertaken where both partieshad already exchanged with each other their respective CBA proposals. In fact, during theconciliation meetings before the NCMB, but prior to the filing of the notices of strike, theparties had already delved into matters affecting the meat of the collective bargainingagreement.

The Secretary of the DOLE simply relied on the Notices of Strike that were filed by UFE-DFA-KMU as stated in her Order of 08 March 2002, to wit:

x x x The records disclose that the Union filed two Notices of Strike. The First isdated October 31, 2001 whose grounds are cited verbatim hereunder:

"A. Bargaining Deadlock

1. Economic issues (specify)

1. Retirement

2. Panel Composition

3. Costs and Attendance

4. CBA"

The second Notice of Strike is dated November 7, 2001 and the cited ground is likequoted verbatim below:

"B. Unfair Labor Practices (specify)

Bargaining in bad faith

Setting pre-condition in the ground rules (Retirement issue)"

Nowhere in the second Notice of Strike is it indicated that this Notice is an amendment to

and took the place of the first Notice of Strike. In fact, our Assumption of Jurisdiction Orderdated November 29, 2001 specifically cited the two (2) Notices of Strike without anyobjection on the part of the Union x x x.29

Had the parties not been at the stage where the substantive provisions of the proposedCBA had been put in issue, the union would not have based thereon its initial notice tostrike. This Court maintains its original position in the Decision that, based on the Notices ofStrike filed by UFE-DFA-KMU, the Secretary of the DOLE rightly decided on matters ofsubstance. That the union later on changed its mind is of no moment because to give
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premium to such would make the legally mandated discretionary power of the DoleSecretary subservient to the whims of the parties.

As to the point of clarification on the resumption of negotiations respecting theRetirement Plan:

As for the supposed confusion or uncertainty of the dispositive part of this Courts Decision,Nestle moves for clarification of the statement "The parties are directed to resumenegotiations respecting the Retirement Plan and to take action consistent with thediscussion hereinabove set forth. No costs." The entire fallo of this Courts Decision reads:

WHEREFORE, in view of the foregoing, the Petition in G.R. No. 158930-31 seekingthat Nestl be declared to have committed unfair labor practice in allegedly setting aprecondition to bargaining is DENIED. The Petition in G.R. No. 158944-45, however,is PARTLY GRANTED in that we REVERSE the ruling of the Court of Appeals in CAG.R. SP No. 69805 in so far as it ruled that the Secretary of the DOLE gravelyabused her discretion in failing to confine her assumption of jurisdiction power over

the ground rules of the CBA negotiations; but the ruling of the Court of Appeals onthe inclusion of the Retirement Plan as a valid issue in the collective bargainingnegotiations between UFE-DFA-KMU and Nestl is AFFIRMED. The parties aredirected to resume negotiations respecting the Retirement Plan and to take actionconsistent with the discussions hereinabove set forth. No costs.

Nestle interprets the foregoing as an order for the parties to resume negotiationsby themselves respecting the issue of retirement benefits due the employees of theCabuyao Plant. Otherwise stated, Nestle posits that the dispositive part of the Decisiondirects the parties to submit to a voluntary mode of dispute settlement.

A read-through of this Courts Decision reveals that the ambiguity is more ostensible thanreal. This Courts Decision of 22 August 2006 designated marked boundaries as to theimplications of the assailed Orders of the Secretary of the DOLE. We said therein that 1) theRetirement Plan is still a valid issue for herein parties collective bargaining negotiations; 2)the Court of Appeals committed reversible error in limiting to the issue of the ground rulesthe scope of the power of the Secretary of Labor to assume jurisdiction over the subjectlabor dispute; and 3) Nestl is not guilty of unfair labor practice. Nowhere in our Decisiondid we require parties to submit to negotiate by themselves the tenor of the retirementbenefits of the concerned employees of Nestl, precisely because the Secretary of theDOLE had already assumed jurisdiction over the labor dispute subject of herein petitions.

Again, we spell out what encompass the Secretarys assumption of jurisdiction power. TheSecretary of the DOLE has been explicitly granted by Article 263(g) of the Labor Code the

authority to assume jurisdiction over a labor dispute causing or likely to cause a strike orlockout in an industry indispensable to the national interest, and decide the sameaccordingly. And, as a matter of necessity, it includes questions incidental to the labordispute; that is, issues that are necessarily involved in the dispute itself, and not just to thatascribed in the Notice of Strike or otherwise submitted to him for resolution. In the case atbar, the issue of retirement benefits was specifically what was presented before theSecretary of the DOLE; hence, We reject Nestls interpretation. Our decision is crystal andcannot be interpreted any other way. The Secretary having already assumed jurisdiction


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over the labor dispute subject of these consolidated petitions, the issue concerning theretirement benefits of the concerned employees must be remanded back to him for properdisposition.

All told, in consideration of the points afore-discussed and the fact that no substantialarguments have been raised by either party, this Court remains unconvinced that it shouldmodify or reverse in any way its disposition of herein cases in its earlier Decision. The labordispute between the Nestle and UFE-DFA-KMU has dragged on long enough. As no otherissues are availing, let this Resolution write an ending to the protracted labor disputebetween Nestl and UFE-DFA-KMU (Cabuyao Division).

WHEREFORE, premises considered, the basic issues of the case having been passedupon and there being no new arguments availing, the Motion for Partial Reconsideration ishereby DENIED WITH FINALITY for lack of merit. Let these cases be remanded to theSecretary of the Department of Labor and Employment for proper disposition, consistentwith the discussions in this Courts Decision of 22 August 2006 and as hereinabove setforth. No costs.

SO ORDERED.


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Manila

THIRD DIVISION

NATIONAL UNION OF WORKERS IN

HOTELS, RESTAURANTS AND ALLIED

INDUSTRIESMANILA PAVILLION

HOTEL CHAPTER,Petitioner,

- versus -

NATIONAL LABOR RELATIONS

COMMISSION and ACESITE

PHILIPPINES HOTEL

CORPORATION, Respondents.

G.R. No. 179402

Present:

YNARES-SANTIAGO, J.,

Chairperson,

AUSTRIA-MARTINEZ,

CHICO-NAZARIO,

NACHURA, and

REYES, JJ.

Promulgated:

September 30, 2008

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,assailing the Decision

1dated 30 May 2007 rendered by the Court of Appeals

in CA-G.R. SP No. 96171, which affirmed the Resolution2dated 5 May 2006

of the National Labor Relations Commission (NLRC) in NLRC NCR CC No.000307-05 NCMB NCR NS 09-199-05, dismissing for lack of merit thecomplaint for unfair labor practice filed by petitioner National Union of Workersin Hotels, Restaurants and Allied Industries-Manila Pavilion Hotel(NUWHRAIN) against Manila Pavilion Hotel (the Hotel).

Petitioner NUWHRAIN is a legitimate labor organization composed of rank-and-file employees of the Hotel,3while respondent Acesite Philippines Hotel

Corporation is the owner and operator of said Hotel.4

The factual antecedents of the instant Petition are as follows:

The Hotel entered into a Collective Bargaining Agreement with HI-MANILAPAVILION HOTEL LABOR UNION (HIMPHLU), the exclusive bargaining
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agent of the rank-and-file employees of the Hotel. Both parties consented thatthe representation aspect and other non-economic provisions of the CollectiveBargaining Agreement were to be effective for five years or until 30 June2005; and the economic provisions of the same were to be effective for threeyears or until 30 June 2003. The parties subsequently re-negotiated theeconomic provisions of the Collective Bargaining Agreement and extendedthe term of their effectivity for another two years or until 30 June 2005.

5

During the 60-day freedom period which preceded the expiration of theCollective Bargaining Agreement, starting on 1 May 2005 and ending on 30June 2005, the Hotel and HIMPHLU negotiated the extension of theprovisions of the existing Collective Bargaining Agreement for two years,effective 1 July 2005 to 30 June 2007. The parties signed the Memorandum ofAgreement on 20 May 2005 and the employees ratified it on 27 May 2005.

6

On 21 June 2005, NUWHRAIN was accorded by the Labor Relations Divisionof the Department of Labor and Employment (DOLE) the status of a legitimatelabor organization.

7Thereafter, NUWHRAIN exercised the right to challenge

the majority status of the incumbent union, HIMPHLU, by filing a Petition forCertification Election on 28 June 2005.

8

On 5 July 2007, the Industrial Relations Division of the DOLE allowed theregistration of the Memorandum of Agreement executed between HIMPHLUand the Hotel, extending the effectivity of the existing Collective BargainingAgreement for another two years.9

After the lapse of the 60-day freedom period, but pending the disposition ofthe Petition for Certification Election filed by NUWHRAIN, HIMPHLU servedthe Hotel with a written demand dated 28 July 2005

10for the dismissal of 36

employees following their expulsion from HIMPHLU for alleged acts ofdisloyalty and violation of its Constitution and by-laws. An InvestigationReport11was attached to the said written demand, stating that the 36employees, who were members of HIMPHLU, joined NUWHRAIN, in violationof Section 2, Article IV of the Collective Bargaining Agreement, whichprovided for a union security clause that reads:12

Section 2. DISMISSAL PURSUANT TO UNION SECURITY CLAUSE.Accordingly, failure to join the UNION within the period specified in theimmediately preceding section or failure to maintain membership with theUNION in good standing either through resignation or expulsion from theUNION in accordance with the UNIONs Constitution and by-laws due todisloyalty, joining another union or non-payment of UNION dues shall be a
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ground for the UNION to demand the dismissal from the HOTEL of theemployee concerned. The demand shall be accompanied by the UNIONsinvestigation report and the HOTEL shall act accordingly subject to existinglaws and jurisprudence on the matter, provided, however, that the UNIONshall hold the HOTEL free and harmless from any and all liabilities that mayarise should the dismissed employee question in any manner the dismissal.The HOTEL shall not, however, be compelled to act on any such UNIONdemand if made within a period of sixty (60) days prior to the expiry date ofthis agreement. (Emphasis provided)

On 1 August 2005, the Hotel issued Disciplinary Action Notices13

(Notices) tothe 36 employees identified in the written demand of HIMPHLU. The Noticesdirected the 36 employees to submit a written explanation for their allegedacts of disloyalty and violation of the union security clause for whichHIMPHLU sought their dismissal.

The Hotel called the contending unions and the employees concerned for areconciliatory conference in an attempt to avoid the dismissal of the 36employees. The reconciliatory conferences facilitated by the Hotel were heldon 5 August 2005 and 1 September 2005.

14However, NUWHRAIN proceeded

to file a Notice of Strike before the National Conciliation and Mediation Board(NCMB) on 8 September 2005 on the ground of unfair labor practice underArticle 248, paragraphs (a) and (b) of the Labor Code.

15The Secretary of

Labor intervened and certified the case for compulsory arbitration with theNLRC. The case was docketed as NLRC NCR CC No. 000307-05 NCMBNCR NS 09-199-05, entitled IN RE: Labor Dispute at Manila Pavilion Hotel.16

NUWHRAIN asserted that the Hotel committed unfair labor practice when itissued the Notices to the 36 employees who switched allegiance fromHIMPHLU to NUWHRAIN. During the reconciliatory conference held on 5

August 2005, respondents Vice President, Norma Azores, stated herpreference to deal with HIMPHLU, while blaming NUWHRAIN for the laborproblems of the Hotel. On 1 September 2005, the Resident Manager of theHotel, Bernardo Corpus, Jr., implored NUWHRAINs members to withdrawtheir Petition for Certification Election and reaffirm their membership inHIMPHLU. The Notices and the statements made by the officers of therespondent and the Hotel were allegedly intended to intimidate and coerce theemployees in the exercise of their right to self-organization. NUWHRAINclaimed that it was entitled to moral damages in the amount of P50,000.00and exemplary damages of P20,000.00

17
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Respondent countered that it merely complied with its contractual obligationswith HIMPHLU when it issued the assailed Notices, and clarified that none ofthe 36 employees were dismissed by the Hotel. It further denied thatrespondents Vice President Norma Azores and the Hotels Resident ManagerBernardo Corpus, Jr. made the statements attributed to them, purportedlyexpressing their preference for HIMPHLU during the reconciliatoryconferences. Thus, respondent insisted that it did not commit unfair laborpractice, nor was it liable for moral and exemplary damages.

18

In a Resolution19

dated 5 May 2006, the NLRC pronounced that the Hotel wasnot guilty of unfair labor practice. Firstly, the NLRC adjudged that theexecution of the Memorandum of Agreement between respondent andHIMPHLU, extending the effectivity of the existing Collective Bargaining

Agreement, was entered into with the view of responding to the employeeseconomic needs, and not intended to interfere with or restrain the exercise ofthe right to self-organization of NUWHRAINs members. Secondly, the NLRCdetermined that the issuance of the Notices directing the 36 employees toexplain why they should not be dismissed was in compliance with theCollective Bargaining Agreement provisions regarding the union securityclause. Even thereafter, the Hotel had not acted improperly as it did notwrongfully terminate any of the 36 employees. Thirdly, the NLRC interpretedthe statements made by the officials of respondent and the Hotel during thereconciliatory conferences encouraging the withdrawal of the Petition forCertification Election and the reaffirmation by the 36 employees of their

membership in HIMPHLU

as proposed solutions to avoid the dismissal ofthe said employees. The NLRC concluded that these statements did notconstitute unfair labor practice for they could not have coerced or influencedeither of the contending unions, both of whom did not agree in the suggestedcourse of action or to any other manner of settling the dispute. Finally, theNLRC declared that the claim for moral and exemplary damages ofNUWHRAIN lacked sufficient factual and legal bases.

NUWHRAIN filed a Motion for Reconsideration of the foregoing NLRCResolution. It was denied by the NLRC in another Resolution dated 30 June

2006.

20

Thus, NUWHRAIN filed a Petition for Certioraribefore the Court ofAppeals, docketed as C.A. G.R. SP No. 96171.

In the meantime, on 16 June 2006, the Certification Election for regular rankand file employees of the Hotel was held, which HIMPHLU won. It wasaccordingly certified as the exclusive bargaining agent for rank and fileemployees of the Hotel.21
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On 30 May 2007, the Court of Appeals promulgated its Decision22

in C.A. G.R.SP No. 96171, upholding the Resolution dated 5 May 2006 of the NLRC inNLRC NCR CC No. 000307-05 NCMB NCR NS 09-199-05. It declared thatthe Hotel had acted prudently when it issued the Notices to the 36 employeesafter HIMPHLU demanded their dismissal. It clarified that these Notices didnot amount to the termination of the employees concerned but merely soughttheir explanation on why the union security clause should not be applied tothem. The appellate court also gave credence to the denial by the officers ofthe respondent and the Hotel that they made statements favoring HIMPHLUover NUWHRAIN during the reconciliatory conferences. The Court of Appealsfurther noted that the unhampered organization and registration ofNUWHRAIN negated its allegation that the Hotel required its employees not tojoin a labor organization as a condition for their employment.

NUWHRAINs Motion for Reconsideration of the aforementioned Decision ofthe Court of Appeals was denied by the same court in a Resolution dated 24August 2007.

23

Hence, the present Petition, in which NUWHRAIN makes the followingassignment of errors:

I

THE COURT OF APPEALS GAVE MORE PROBATIVE VALUE TORESPONDENT HOTELS GENERAL AND UNSWORN DENIAL

VERSUS THAT OF PETITIONERS SWORN TESTIMONYNARRATING RESPONDENTS HOTELS VIOLATION OFPETITIONERS RIGHT TO SELF ORGANIZATION. SUCH A RULINGCONTRADICTS EXISTING JURISPRUDENCE SUCH AS MASAGANACONCRETE PRODUCTS INC. V. NLRC, G.R. NO. 106916,SEPTEBMER 3, 1999; JRS BUSINESS CORPORATION V. NLRC, 246SCRA 445 [1995]; and ASUNCION V. NLRC, 362 SCRA 56 [2001].

II

THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTHOTEL IS NOT GUILTY OF UNFAIR LABOR PRACTICE CONTRARY

TO ARTICLE 248 OF THE LABOR CODE AND THE SUPREMECOURTS RULING IN PROGRESSINVE DEVELOPMENT

CORPORATION V. CIR, 80 SCRA 434 [1977] and INSULAR LIFEASSURANCE CO. LTC EMPLOYEES ASSOCIATION-NATU V. THE

INSULAR LIFE ASSURANCE CO. LTD., 37 SCRA 244 [1971].24
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The instant Petition lacks merit, and must accordingly be denied.

NUWHRAIN maintains that the respondent committed unfair labor practicewhen (1) the Hotel issued the Notices to the 36 employees, former membersof HIMPHLU, who switched allegiance to NUWHRAIN; and (2) the officers of

the respondent and the Hotel allegedly uttered statements during thereconciliatory conferences indicating their preference for HIMPHLU and theirdisapproval of NUWHRAIN. This argument is specious.

The records clearly show that the Notices were issued after HIMPHLU servedthe Hotel with a letter dated 28 July 2005, demanding the dismissal of 36 of itsformer members who joined NUWHRAIN. In its letter, HIMPHLU alleged that ithad found these members guilty of disloyalty and demanded their dismissalpursuant to the union security clause in the Collective Bargaining Agreement.Had the Hotel totally ignored this demand, as NUWHRAIN suggests it should

have done, the Hotel would have been subjected to a suit for its failure tocomply with the terms of the Collective Bargaining Agreement.

"Union security" is a generic term which is applied to and comprehends"closed shop," "union shop," "maintenance of membership" or any other formof agreement which imposes upon employees the obligation to acquire orretain union membership as a condition affecting employment.

25Article 248(e)

of the Labor Code recognizes the effectivity of a union shop clause:

Art. 248. Unfair labor practices of employers.

(e) To discriminate in regard to wages, hours of work, and other terms andconditions of employment in order to encourage or discourage membership inany labor organization. Nothing in this Code or in any other law shall preventthe parties from requiring membership in a recognized collective bargainingagent as a condition for employment, except of those employees who arealready members of another union at the time of the signing of the collectivebargaining agreement x x x. (Emphasis supplied.)

The law allows stipulations for "union shop" and "closed shop" as a means of

encouraging workers to join and support the union of their choice in theprotection of their rights and interests vis--vis the employer. By thuspromoting unionism, workers are able to negotiate with management on aneven playing field and with more persuasiveness than if they were toindividually and separately bargain with the employer.

26In Villar v.

Inciong,27

this Court held that employees have the right to disaffiliate fromtheir union and form a new organization of their own; however, they must
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