SACORU vs Coca Cola

G.R. No. 200499

Facts:

On May 29, 2009, the private respondent company, Coca-Cola Bottlers Philippines., Inc. ("CCBPI") issued
notices of termination to twenty seven (27) rank-and-file, regular employees and members of the
("SACORU') collectively referred to as "union members", on the ground of redundancy due to the
ceding out of two selling and distribution systems,

To SACORU, the new, reorganized selling and distribution systems adopted and implemented by CCBPI
would result in the diminution of the union membership amounting to union busting and to a violation
of the Collective Bargaining Agreement (CBA) provision against contracting out of services or
outsourcing of regular positions; hence, they filed a Notice of Strike with the NCMB on the ground of
unfair labor practice.

The then Secretary of the Department of Labor and Employment (DOLE), assumed jurisdiction over the
labor dispute by certifying for compulsory arbitration the issues raised in the notice of strike.

CCBPI, for its part, argued that the new business scheme is basically a management prerogative
designed to improve the system of selling and distributing products in order to reach more consumers at
a lesser cost with fewer manpower complement, but resulting in greater returns to investment.

SACORU maintained that the termination of the 27 union members is a circumvention of the CBA
against the contracting out of regular job positions, and that the theory of redundancy as a ground for
termination is belied by the fact that the job positions are contracted out to a  "third party
provider"; that the termination will seriously affect the union membership because out of 250 members,
only 120 members will be left upon plan implementation that there is no redundancy because the sales
department still exists except that job positions will be contracted out to a sales contractor using
company equipment for the purpose of minimizing labor costs because contractual employees do not
enjoy CBA benefits; that the contractualization program of the company is illegal because it will render
the union inutile in protecting the rights of its members as there will be more contractual employees
than regular employees; and that the redundancy program will result in the displacement of regular
employees which is a clear case of union busting.

The NLRC dismissed the complaint for unfair labor practice and declared as valid the dismissal of the
employees due to redundancy. SACO RU filed a petition for certiorari under Rule 65 of the Rules of Court
before the CA. The CA, however, dismissed the petition and found that the NLRC did not commit grave
abuse of discretion. Hence, this petition.

Issue: WON CCBPI's implementation of the redundancy program was an unfair labor practice.

Ruling:

No, he CA also correctly ruled that the NLRC, with its findings supported by law and jurisprudence, did
not commit grave abuse of discretion.
In Zambrano v. Philippine Carpet Manufacturing Corp.,23 the Court stated:

Unfair labor practice refers to acts that violate the workers' right to organize. There should be no
dispute that all the prohibited acts constituting unfair labor practice in essence relate to the workers'
right to self-organization. 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

To prove the existence of unfair labor practice, substantial evidence has to be presented. 25

Here, the NLRC found that SACORU failed to provide the required substantial evidence, thus:

The union's charge of ULP against respondent company cannot be upheld. The union's mere allegation
of ULP is not evidence, it must be supported by substantial evidence.

Thus, the consequent dismissal of twenty seven (27) regular members of the complainant's union due to
redundancy is not per se an act of unfair labor practice amounting to union busting. For while, the
number of union membership was diminished due to the termination of herein union members, it
cannot safely be said that respondent company acted in bad faith in terminating their services because
the termination was not without a valid reason.

The CA ruled similarly and found that SACORU failed to support its allegation that CCBPI committed an
unfair labor practice:

SACORU failed to proffer any proof that CCBPI acted in a malicious or arbitrarily manner in implementing
the redundancy program which· resulted in the dismissal of the 27 employees, and that CCBPI engaged
instead the services of independent contractors. As no credible, countervailing evidence had been put
forth by SACORU with which to challenge the validity of the redundancy program implemented by
CCBPI, the alleged unfair labor practice acts allegedly perpetrated against union members may not be
simply swallowed. SACORU was unable to prove its charge of unfair labor practice and support its
allegations that the termination of the union members was done with the end-in-view of weakening
union leadership and representation. There was no showing that the redundancy program was
motivated by ill will, bad faith or malice, or that it was conceived for the purpose of interfering with the
employees' right to self-organize.

The Court accordingly affirms these findings of the NLRC and the CA that SACORU failed to present any
evidence to prove that the redundancy program interfered with their right to self-organize.
Bankard vs NLRC
G.R. No. 171664     

Facts:

Respondent Bankard Employees Union-AWATU (Union) filed before the NCMB its first Notice of Strike
alleging commission of unfair labor practices by petitioner Bankard, Inc., to wit: 1) job
contractualization; 2) outsourcing/contracting-out jobs; 3) manpower rationalizing program; and 4)
discrimination.

Thereafter, Bankard asked the Office of the Secretary of Labor to assume jurisdiction over the labor
dispute or to certify the same to the NLRC for compulsory arbitration. The Secretary Bienvenido
Laguesma (Labor Secretary) of the Department of Labor and Employment (DOLE) issued the order
certifying the labor dispute to the NLRC.

The then Union declared a CBA bargaining deadlock. The following day, the Union filed its second Notice
of Strike 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.

The Union, despite the two certification orders issued by the Labor Secretary enjoining them from
conducting a strike or lockout and from committing any act that would exacerbate the situation, went
on strike.

It was Bankard’s position that job contractualization or outsourcing or contracting-out of jobs was a
legitimate exercise of management prerogative and did not constitute unfair labor practice. It had to
implement new policies and programs, one of which was the Manpower Rationalization Program (MRP)
to further enhance its efficiency and be more competitive in the credit card industry.

On the other hand, the Union alleged that contractualization started in Bankard in 1995 in the Records
Communications Management Division, particularly in the mailing unit, which was composed of two (2)
employees and fourteen (14) messengers. They were hired as contractual workers to perform the
functions of the regular employees who had earlier resigned and availed of the MRP. According to the
Union, there were other departments in Bankard utilizing messengers to perform work load considered
for regular employees, like the Marketing Department, Voice Authorizational Department, Computer
Services Department, and Records Retention Department. The Union contended that the number of
regular employees had been reduced substantially through the management scheme of freeze-hiring
policy on positions vacated by regular employees on the basis of cost-cutting measures and the
introduction of a more drastic formula of streamlining its regular employees through the MRP

Issue: whether or not Bankard committed acts considered as ULP. 

Ruling:

No, Article 247. Concept of unfair labor practice and procedure for prosecution thereof. -- Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are inimical to
the legitimate interests of both labor and management, including their right to bargain collectively and
otherwise 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

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."27 Without that element, the acts, even if unfair, are not ULP. 28 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. 29

In this case, the Union claims that Bankard, in implementing its MRP which eventually reduced the
number of employees, clearly violated Article 248(c) of the Labor Code which states that:

Art. 248. Unfair labor practices of employers. – It shall be unlawful for an employer to commit any of the
following unfair labor practice:

xxxx

(c) To contract 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;

The general principle is that the one who makes an allegation has the burden of proving
it.1avvphi1 While there are exceptions to this general rule, in ULP cases, the alleging party has the
burden of proving the ULP; 31 and in order to show that the employer committed ULP under the Labor
Code, substantial evidence is required to support the claim. 32 Such principle finds justification in the fact
that ULP is punishable with both civil and/or criminal sanctions.

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 employer’s right to conduct the affairs of its business, according to its own discretion and judgment,
is well-recognized.37 Management has a wide latitude to conduct its own affairs in accordance with the
necessities of its business.38 As the Court once said:

The Court has always respected a company's exercise of its prerogative to devise means to improve its
operations. Thus, we have held that management is free to regulate, according to its own discretion and
judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of
employees, working methods, time, place and manner of work.

This is so because the 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. 39

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.40Furthermore, bear in mind that ULP is punishable with both civil
and/or criminal sanctions.41 As such, the party so alleging must necessarily prove it by substantial
evidence. The Union, as earlier noted, failed to do this. Bankard merely validly exercised its
management prerogative. Not shown to have acted maliciously or arbitrarily, no act of ULP can be
imputed against it.
REN TRANSPORT CORP. AND/OR REYNALDO PAZCOGUIN III vs NLRC
G.R. No. 188020

Facts:

Samahan ng Manggagawa sa Ren Transport (SMART) is a registered union, which had a five-year
collective bargaining agreement with Ren Transport Corp. (Ren Transport) set to expire on 31 December
2004. The 60-day freedom period of the CBA passed without a challenge to SMART'S majority status as
bargaining agent. SMART thereafter conveyed its willingness to bargain with Ren Transport, to which it
sent bargaining proposals. Ren Transport, however, failed to reply to the demand. 5chanrobleslaw

Subsequently, two members of SMART wrote to the Department of Labor and Employment - National
Capital Region (DOLE-NCR). The office was informed that a majority of the members of SMART had
decided to disaffiliate from their mother federation to form another union, Ren Transport Employees
Association (RTEA).

During the pendency of the disaffiliation dispute, Ren Transport stopped the remittance to SMART of the
union dues that had been checked off from the salaries of union workers as provided under the
CBA. Further, Ren Transport voluntarily recognized RTEA as the sole and exclusive bargaining agent of
the rank-and-file employees of their company.

Thereafter, SMART filed with the labor arbiter a complaint for unfair labor practice against Ren
Transport.

The LA ruled that is Ren Transport guilty of acts of unfair labor practice.  The former explained that since
the disaffiliation issue remained pending, SMART continued to be the certified collective bargaining
agent; hence, Ren Transport's refusal to send a counter-proposal to SMART was not justified. The labor
arbiter also held that the company's failure to remit the union dues to SMART and the voluntary
recognition of RTEA were clear indications of interference with the employees' exercise of the right to
self-organize.

The NLRC issued a decision affirming the labor arbiter's finding of unfair labor practice on the part of Ren
Transport.

Issue: WON petitioner committed unfair labor practice.

Ruling:

Yes, violation of the duty to bargain collectively is an unfair labor practice under Article 258(g) of the
Labor Code. An instance of this practice is the refusal to bargain collectively as held in General Milling
Corp. v. CA.
In that case, the employer anchored its refusal to bargain with and recognize the union on several
letters received by the former regarding the withdrawal of the workers' membership from the union.
We rejected the defense, saying that the employer had devised a flimsy excuse by attacking the
existence of the union and the status of the union's membership to prevent any negotiation.
It bears stressing that Ren Transport had a duty to bargain collectively with SMART. Under Article 263 in
relation to Article 267 of the Labor Code, it is during the freedom period — or the last 60 days before
the expiration of the CBA — when another union may challenge the majority status of the bargaining
agent through the filing of a petition for a certification election. If there is no such petition filed during
the freedom period, then the employer "shall continue to recognize the majority status of the
incumbent bargaining agent where no petition for certification election is filed.

In the present case, the facts are not up for debate. No petition for certification election challenging the
majority status of SMART was filed during the freedom period, which was from November 1 to
December 31, 2004 — the 60-day period prior to the expiration of the five-year CBA. SMART therefore
remained the exclusive bargaining agent of the rank-and-file employees.

Given that SMART continued to be the workers' exclusive bargaining agent, Ren Transport had the
corresponding duty to bargain collectively with the former. Ren Transport's refusal to do so constitutes
an unfair labor practice.

Further, Interference with the employees' right to self-organization is considered an unfair labor practice
under Article 258 (a) of the Labor Code. In this case, the labor arbiter found that the failure to remit the
union dues to SMART and the voluntary recognition of RTEA were clear indications of interference with
the employees' right to self-organization. 25cralawred It must be stressed that this finding was affirmed
by the NLRC and the CA; as such, it is binding on the Court, especially when we consider that it is not
tainted with any blatant error. As aptly pointed out by the labor arbiter, these acts were ill-timed in view
of the existence of a labor controversy over membership in the union.