ULP

1. ULP • For a charge of unfair labor practice to prosper, it must be shown that the employer was motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have acted in a manner contrary to morals, good customs, or public policy causing social humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the employer and the employees to bargain collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement. • Manila Mining Corporation Employees Association v. manila Mining Corp., September 29, 2010

2. ULP • For a charge of unfair labor practice to prosper, it must be shown that CAB was motivated by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted x x x” in suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEU-NFL was no longer the representative of the workers. It just wanted to foster industrial peace by bowing to the wishes of the overwhelming majority of its rank and file workers and by negotiating and concluding in good faith a CBA with CABELA.” Such actions of CAB are nowhere tantamount to anti-unionism, the evil sought to be punished in cases of unfair labor practices. • Furthermore, basic is the principle that good faith is presumed and he who alleges bad faith has the duty to prove the same. By imputing bad faith to the actuations of CAB, CABEU-NFL has the burden of proof to present substantial evidence to support the allegation of unfair labor practice. Apparently, CABEU-NFL refers only to the circumstances mentioned in the letter-response, namely, the execution of the supposed CBA between CAB and CABELA and the request to suspend the negotiations, to conclude that bad faith attended CAB’s actions. The Court is of the view that CABEU-NFL, in simply relying on the said letter-response, failed to substantiate its claim of unfair labor practice to rebut the presumption of good faith.  • Central Azucarera de Bais Employees Union v. Central Azucarera de Bais, November 17, 2010

3. Union Security Clause • Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. • A stipulation in the CBA authorizing the dismissal of employees are of equal import as the statutory provisions on dismissal under the Labor Code, since “a CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor.” • In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA. • General Milling Corporation v. Casio, March 10, 2010

4. Union Security Clause • “Union security” is a generic term, which is applied to and comprehends “closed shop,” “union shop,” “maintenance of membership,” or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. • There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. • There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. • A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. • General Milling Corporation v. Casio, March 10, 2010

5. Union Security Clause • In Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., the Court issued the following reminder to employers: • The power to dismiss is a normal prerogative of the employer. However, this is not without limitations. The employer is bound to exercise caution in terminating the services of his employees especially so when it is made upon the request of a labor union pursuant to the Collective Bargaining Agreement. x x x. Dismissals must not be arbitrary and capricious. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. Employers should therefore respect and protect the rights of their employees, which include the right to labor. x x x. • The Court reiterated in Malayang Samahan ng mga Manggagawa sa M. Greenfield v. Ramos that: • While respondent company may validly dismiss the employees expelled by the union for disloyalty under the union security clause of the collective bargaining agreement upon the recommendation by the union, this dismissal should not be done hastily and summarily thereby eroding the employees’ right to due process, self-organization and security of tenure. The enforcement of union security clauses is authorized by law provided such enforcement is not characterized by arbitrariness, and always with due process. Even on the assumption that the federation had valid grounds to expel the union officers, due process requires that these union officers be accorded a separate hearing by respondent company. • General Milling Corporation v. Casio, March 10, 2010

6. Union Security Clause • the Union Shop Clause of the CBA covers the former FEBTC employees who were hired/employed by BPI during the effectivity of the CBA in a manner which petitioner describes as “absorption.” • BPI v. BPI employees Union-Davao, August 10, 2010

7. Union Security Clause • The Union Shop Clause in the CBA simply states that “new employees” who during the effectivity of the CBA “may be regularly employed” by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are “absorbed” as regular employees from the beginning of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner’s new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment. • BPI v. BPI employees Union-Davao, August 10, 2010

8. Union Security Clause • there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying the Union Shop Clause. Both employees were hired/employed only after the CBA was signed. At the time they are being required to join the Union, they are both already regular rank and file employees of BPI. They belong to the same bargaining unit being represented by the Union. They both enjoy benefits that the Union was able to secure for them under the CBA. When they both entered the employ of BPI, the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees, for they are undeniably similarly situated. • BPI v. BPI employees Union-Davao, August 10, 2010

9. Union Security Clause • Theoretically, there is nothing in law or jurisprudence to prevent an employer and a union from stipulating that existing employees (who already attained regular and permanent status but who are not members of any union) are to be included in the coverage of a union security clause. Even Article 248(e) of the Labor Code only expressly exempts old employees who already have a union from inclusion in a union security clause. • BPI v. BPI employees Union-Davao, August 10, 2010

10. Union Security Clause • The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employee’s right or freedom of association, is not to protect the union for the union’s sake. Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer. This is the rationale behind the State policy to promote unionism declared in the Constitution, which was elucidated in the above-cited case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.[1][54] • BPI v. BPI employees Union-Davao, August 10, 2010

11. STRIKE • The Labor Code defines “strike” as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. • Certain forms of mass action by employees had been considered as strikes even if they do not squarely fall within this definition:

12. STRIKE • Article 212 of the Labor Code, as amended, defines strike as any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employers and employees. • The term “strike” shall comprise not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or sabotage plant equipment and facilities and similar activities. Thus, the fact that the conventional term “strike” was not used by the striking employees to describe their common course of action is inconsequential, since the substance of the situation, and not its appearance, will be deemed to be controlling. • Solidbank Corp. v. Gamier, November 15, 2010

13. STRIKE & PICKETING • To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound. While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and its incidents to inform the public of what is happening in the company struck against. A picket simply means to march to and from the employer’s premises, usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. It is a strike activity separate and different from the actual stoppage of work. • While the right of employees to publicize their dispute falls within the protection of freedom of expression and the right to peaceably assemble to air grievances, these rights are by no means absolute. Protected picketing does not extend to blocking ingress to and egress from the company premises. That the picket was moving, was peaceful and was not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the company premises. • PHIMCO Industries v. PHIMCO Industries Labor Association, August 11, 2010

14. PICKETING • As we have stated, while the picket was moving, the movement was in circles, very close to the gates, with the strikers in a hand-to-shoulder formation without a break in their ranks, thus preventing non-striking workers and vehicles from coming in and getting out. Supported by actual blocking benches and obstructions, what the union demonstrated was a very persuasive and quietly intimidating strategy whose chief aim was to paralyze the operations of the company, not solely by the work stoppage of the participating workers, but by excluding the company officials and non-striking employees from access to and exit from the company premises. No doubt, the strike caused the company operations considerable damage, as the NLRC itself recognized when it ruled out the reinstatement of the dismissed strikers. • PHIMCO Industries v. PHIMCO Industries Labor Association, August 11, 2010

15. STRIKE • Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan to protest the accelerating prices of oil commit an illegal work stoppage. • Biflex v. Filflex, December 19, 2006

16. STRIKE • Employees who reported for work with shaved heads during a bargaining deadlock situation were considered to have conducted an illegal strike. The employees’ collaborative effort to violate the Hotel’s grooming standards succeeded in forcing the employer to choose between allowing its inappropriately hair styled employees to continue working, to the detriment of its reputation, or to refuse them work, even if it had to cease operations in affected departments, which in either way would disrupt the operations of the Hotel. • NUWHRAIN-DUSIT Hotel v. CA, November 11, 2008

17. STRIKE • Employees’ refusal to work on three consecutive holidays, prompted by their disagreement with the management-imposed new work schedule, was considered a strike that was grounded on a non-strikeable issue, and a violation of the No-Strike Clause in the CBA. • A. Soriano Aviation v. Employees Association of A. Soriano Aviation, August 14, 2009

18. Placards/Banners may make strike illegal • The display of placards and banners imputing criminal negligence on the part of the employer and its officers, apparently with the end in view of intimidating the employer’s clientele, are, given the nature of its business, that serious as to make the strike illegal. The putting up of those banners and placards, coupled with the name-calling and harassment, indicates that it was resorted to to coerce the resolution of the dispute. That the alleged acts were committed in nine non-consecutive days during the almost eight months that the strike was on-going does not render the violence less pervasive or widespread to be excusable. Art. 264 does not require that violence must be continuous or that it should be for the entire duration of the strike. • A. Soriano Aviation v. Employees Association of A. Soriano Aviation, August 14, 2009

19. LIABILITY OF OFFICERS • We explained in Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc. that the effects of illegal strikes, outlined in Article 264 of the Labor Code, make a distinction between participating workers and union officers. The services of an ordinary striking worker cannot be terminated for mere participation in an illegal strike; proof must be adduced showing that he or she committed illegal acts during the strike. The services of a participating union officer, on the other hand, may be terminated, not only when he actually commits an illegal act during a strike, but also if he knowingly participates in an illegal strike. • PHIMCO Industries v. PHIMCO Industries Labor Association, August 11, 2010

20. Employer may dismiss employees for illegal acts during a strike even if there is no petition to declare a strike illegal • The use of unlawful means in the course of a strike renders such strike illegal. The filing of a petition to declare the strike illegal is thus unnecessary. Article 263 provides that an employer may terminate employees found to have committed illegal acts in the course of a strike. • Jackbilt Industries v. Jackbilt Employees Union, March 20, 2009

21. Assumption of Jurisdiction • Article 263(g) is both an extraordinary and a preemptive power to address an extraordinary situation – a strike or lockout in an industry indispensable to the national interest. This grant is not limited to the grounds cited in the notice of strike or lockout that may have preceded the strike or lockout; nor is it limited to the incidents of the strike or lockout that in the meanwhile may have taken place. • As the term “assume jurisdiction” connotes, the intent of the law is to give the Labor Secretary full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and extends to all questions and controversies arising from or related to the dispute, including cases over which the labor arbiter has exclusive jurisdiction. • Bagong Pagkakaisa ng Manggagawa sa Triumph v. Secretary, July 5, 2010

22. Termination Due to Strikes • Conformably with the long honored principle of afair day’s wage for a fair day’s labor, employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike. • Escario v. NLRC, Pinakamasarap Corp., September 27, 2010

23. Termination Due to Strikes • We explained in Suico v. National Labor Relations Commission, that Article 277(b), in relation to Article 264(a) and (e) of the Labor Code recognizes the right to due process of all workers, without distinction as to the cause of their termination, even if the cause was their supposed involvement in strike-related violence prohibited under Article 264(a) and (e) of the Labor Code. • PHIMCO Industries v. PHIMCO Industries Labor Association, August 11, 2010

24. What are the elements of a valid retrenchment program? • The burden clearly falls upon the employer to prove economic or business losses with sufficient supporting evidence.  Its failure to prove these reverses or losses necessarily means that the employee’s dismissal was not justified.  Any claim of actual or potential business losses must satisfy certain established standards, all of which must concur, before any reduction of personnel becomes legal.  These are: • (1)        That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; • (2)        That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; • (3)        That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half (½) month pay for every year of service, whichever is higher; • (4)        That the 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)        That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers. (FASAP v. Philippine Airlines, July 22, 2008)

25. Suspension of Operations/Termination • An employment should be deemed terminated, should the suspension of operation go beyond six (6) months, even if the continued suspension is due to a cause beyond the control of the employer. • The decision to suspend operation ultimately lies with the employer, who in its desire to avert possible financial losses, declares suspension of operations. • Article 283 is emphatic that an employee, who was dismissed due to cessation of business operation, is entitled to the separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. And it is jurisprudential that separation pay should also be paid to employees even if the closure or cessation of operations is not due to losses. • Manila Mining Corporation Employees Association v. manila Mining Corp., September 29, 2010

26. A dismissed employee claims that, when he was dismissed, due process was not observed in the absence of a hearing in which he could have explained his side and refuted the evidence against him. Is this contention correct? • No. There is no need for a hearing or conference. Article 227 (b) of the Labor Code provides that, in cases of termination for a just cause, an employee must be given “ample opportunity to be heard and to defend himself.” This right to be heard is satisfied not only by a formal face to face confrontation but by any meaningful opportunity to controvert the charges against him and to submit evidence in support thereof. It does not mean verbal argumentation alone inasmuch as a person may be heard just as effectively through written explanations, submissions or pleadings. “Ample opportunity to be heard” means any meaningful opportunity – verbal or written – given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. • Perez v. PT&T, April 7, 2009

27. When is a formal hearing or conference mandatory? • A formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. • Perez v. PT&T, April 7, 2009

28. An employee was dismissed on charges of payroll padding, and renting out the employer’s tractor for unauthorized use and misappropriating the proceeds thereof. A confrontation about the matter was held before the barangay council but no settlement was reached. The Court of Appeals held that there was no first notice which apprised the employee of the cause for termination. The employer claimed that the confrontation before the barangay council constituted the first notice. Is the employer’s contention correct? • No. The confrontation before the barangay council did not constitute the first notice. Hearings before the barangay council do not afford the employee ample opportunity to be represented by counsel if he so desires. The Local Government Code mandates that in all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or his representatives. • Bacolod-Talisay Realty v. Dela Cruz, April 30, 2009

29. A complaining employee won an illegal dismissal case with a favorable decision of the Labor Arbiter which ordered her immediate reinstatement. The employer opted payroll reinstatement pending appeal. The NLRC reversed the decision of the Labor Arbiter and ruled that the dismissal was valid. The employer stopped the payroll reinstatement. The employee elevated the case to the CA, and eventually to the SC. The SC upheld the dismissal. Is the employee entitled to continued payroll reinstatement after the NLRC decision? • No. The employee is not entitled to continued payroll reinstatement. The decision of the NLRC on appeals from decisions of the Labor Arbiter shall become final and executory after ten (10) calendar days from receipt thereof by the parties. That the CA may take cognizance of and resolve a petition for certiorari for the nullification of the decisions of the NLRC on jurisdictional and due process considerations does not affect the statutory finality of the NLRC decision. Since the NLRC decision which upheld the dismissal became final, the employer was correct in stopping the payroll reinstatement of the employee. • Bago v. NLRC, April 4, 2007

30. Can the award of backwages be limited even if there is a finding that there is no just cause for the dismissal? • Yes. As a general rule, when no just cause exists to warrant the employee’s dismissal, the employee is entitled to reinstatement to his former position without loss of seniority rights, and to payment of full backwages. However, the award of backwages can be limited in a situation where the employee is not entirely faultless, but the fault is not sufficient to justify termination. In such case, the employee’s fault cannot be condoned, much less tolerated. The award of backwages in favor of the employee can be limited, and the period for such award shall start from the date of the NLRC’s promulgation of the decision, instead of from the time of termination. • Salas v. Aboitiz One, June 27, 2008

31. Can the award of backwages be taken out altogether even if there is a finding of illegal dismissal? • Yes. The Court may not only mitigate, but also absolve entirely, the liability of the employer to pay backwages where good faith is evident. Likewise, backwages may be withheld from a dismissed employee where exceptional circumstances are availing. The award of backwages could be deleted when the employer’s only mistake was to strictly apply its company policy, and the employee’s right to due process was fully respected, but the Court eventually imposed the lighter penalty of suspension because dismissal was not commensurate to the offense committed by the employee. • Moreno v. San Sebastian College, March 28, 2008

32. Can the employer demand that the employee reimburse the amount that had been paid under the period of payroll reinstatement? • No. Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. The Labor Arbiter’s order of reinstatement is immediately executory and the employer has to either re-admit the employee to work under the same terms and condition prevailing prior to the dismissal, or to reinstate the employee in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee’s salaries. If the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. The social justice principles of labor outweigh or render inapplicable the civil law doctrine of unjust enrichment. • Garcia v. Philippine Airlines, January 20, 2009

33. If no actual or payroll reinstatement was effected during the period of appeal despite the Labor Arbiter’s reinstatement order, can the employee still collect the wages due him for the period of the supposed reinstatement even after the Labor Arbiter’s decision has already been reversed by the NLRC? • Yes. The reinstatement aspect of the Labor Arbiter’s order is self-executory. The salary automatically accrued from notice of the Labor Arbiter’s order of reinstatement until its ultimate reversal by the NLRC or a higher court. Hence, even after the Labor Arbiter’s order has been reversed, the employee can still collect the wages due for the period of the reinstatement pending appeal. The employee may be barred from collecting the accrued wages, however, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.

34. Is there a need for a writ of execution before the Labor Arbiter’s order of reinstatement can be made executory? • No. The reinstatement aspect of the Labor Arbiter’s order is self-executory. The employee need not file a motion for the issuance of the writ of execution. Under the NLRC Rules of Procedure, the employer is required to submit a report of compliance within 10 calendar days from receipt of the Labor Arbiter’s decision. If the employer disobeys the directive or refuses to reinstate the dismissed employee, the Labor Arbiter shall immediately issue a writ of execution, i.e., motu propio. If the employer disobeys the writ, the employer may be cited for contempt. • Garcia v. Philippine Airlines, January 20, 2009

35. In an illegal dismissal case, the Labor Arbiter dismissed the complaint for illegal dismissal as he found the dismissed employee guilty of dishonesty as a form of serious misconduct and fraud. The Arbiter, however, ordered the reinstatement of the employee without backwages “as a measure of equitable and compassionate relief”. The employer appealed the decision to the NLRC. The employee claims that he is entitled to reinstatement pending appeal. Is the employee correct? • No. The provision mandating the immediate execution of the reinstatement order of the Labor Arbiter pending appeal applies only if there is a finding of illegal dismissal. Article 223 gives an interim relief, granted to an employee while the case for illegal dismissal is pending appeal. Where there is no finding of illegal dismissal, such interim relief does not apply. • Lansangan v. Amkor Technology Philippines, January 30, 2009