Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-51494 August 19, 1982
JUDRIC CANNING CORPORATION, petitioner,
vs.
THE HONORABLE AMADO G. INCIONG, in his capacity as Deputy Minister of
Labor, THE HONORABLE FRANCISCO L. ESTRELLA, in his capacity as Director
of Region IV, Ministry of Labor, UNITED LUMBER & GENERAL WORKERS OF
THE PHILIPPINES (ULGWP), NORMA PINEDA, LEONILA MORALES, TERESITA
BALMACEDA, VICKY PENALOSA, ADELINA VALENZUELA and JUANITA
REPOSAR, respondents.
Florante A. Bautista for petitioner.
The Solicitor General for respondent Deputy Minister.
Eduardo G. Araulo for private respondents.
&
CONCEPCION JR., J.:1wph1.t
Petition for certiorari, with a prayer for the issuance of a writ of preliminary injunction
or restraining order, to annul and set aside the Order issued by the Regional Director
of the Ministry, of Labor on November 15, 1978 in Case No. R4-STF 5515-78,
entitled: "United Lumber and General Workers of the Philippines (ULGWP), et al.,
complainants, versus Judric Canning Corporation, respondents," which ordered the
herein petitioner to reinstate immediately herein private respondents Norma Pineda,
Vicky Penalosa, Leonila Morales, Teresita Balmaceda, Adelina Valenzuela, and Juanita
Reposar to their former positions with full backwages from the date of their dismissal
up to their actual reinstatement; the Order issued by the respondent Amado G.
Inciong on August 3, 1979, which affirmed the aforestated order of the Regional
Director and dismissed the appeal of the herein petitioner; and the Writ of Execution
issued in said case on September 24, 1979.
The records show that the herein private respondents Norma Pineda, Vicky Penalosa,
Leonila Morales, Teresita Balmaceda, Adelina Valenzuela, and Juanita Reposar are
employees of the petitioner corporation and are members of the United Lumber and
General Workers of the Philippines (ULGWP). On August 19, 1978, the said
complainants were allegedly not allowed to report for work due to their union
activities in soliciting membership in a union yet to be organized in the company and
their time cards were removed from the rack. As a result, the said complainants and
their labor union filed a complaint for unfair labor practice against the petitioner with
Region IV of the Ministry of Labor, seeking the reinstatement of the complainants with
full backwages. 1

The herein petitioner denied having locked out the complainants and claims that the
said complainants failed to report for work and abandoned their positions. The
petitioner also denied having knowledge of the union activities of the complainants
until August 30, 1978, when it was served notice of a petition for direct certification
filed by the complainant union. 2
After hearing the parties, or on November 15, 1978, the Regional Director of Region IV
of the Ministry of Labor, after finding that the petitioner had dismissed the
complainants without valid cause, ordered the petitioner to immediately reinstate the
complainants to their former positions with fun backwages from the date of their
dismissal up to their actual reinstatement. 3
The petitioner corporation appealed to the Ministry of Labor, 4 but its appeal was
dismissed for lack of merit on August 3, 1979. 5 Thereafter, a writ of execution was
issued on September 24, 1979. 6
Hence, the present recourse. As prayed for, a temporary restraining order, restraining
the respondents from enforcing, implementing and/or carrying out the writ of
execution dated September 24, 1979, was issued on November 12, 1979. 7
1. The petitioner contends that the Regional Director's finding, witch was affirmed by
the respondent Deputy Minister of Labor, that the petitioner is guilty of unfair labor
practice for terminating the services of the respondent union members due to their
alleged union activities, is not supported by the evidence of record.
This contention is untenable.t@lF The record shows that after the parties had
submitted their respective position papers, a hearing was held, at the conclusion of
which, the respondent Regional Director found that the private respondents did not
abandon their jobs but were dismissed because of their union activities. This is a
finding of fact which may not now be disturbed.
Besides, the private respondents immediately filed a complaint for illegal dismissal,
seeking their reinstatement, on August 24, 1978, soon after their services were
terminated on August 19, 1978. it would be illogical for the private respondents to
abandon their work and then immediately file an action seeking their reinstatement.
Moreover, there was no reason at all and none has been suggested by the petitioner,
for the private respondents to abandon their work. No employee with a family to
support, like the private respondents, would abandon their work knowing fully well of
the acute unemployment and underemployment problem and the difficulty of looking
for a means of livelihood. As the Solicitor General stated: "To get a job is difficult; to
run from it is foolhardy."
But, most of all, the petitioner stated that in spite of its position that the private
respondents had abandoned their jobs, it "offered to pay respondent union members
severance pay of one (1) month." 8 This is a clear admission of the charge of arbitrary
dismissal, for why should the petitioner offer to pay what it calls "severance pay" if
the private respondents were not, indeed, dismissed, or if the petitioner sincerely
believed in the righteousness of its stance?
2. The petitioner further claims that it could not have committed the unfair labor
practice charge for dismissing some of its employees due to their alleged union

activities because the alleged dismissal took place more than four (4) months before
the organizational meeting of the union and more than one (1) year before actual
registration of said union with the Labor Organization Division of the Bureau of Labor
Relations.
The contention is without merit. Under Article 248(a) of the Labor Code of the
Philippines, "to interfere with, restrain, or coerce employees in their exercise of the
right to self-organization" is an unfair labor practice on the part of the employer.
Paragraph (d) of said Article also considers it an unfair labor practice for an employer
"to initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or other
support to it. In this particular case, the private respondents were dismissed or their
services were terminated, because they were soliciting signatures in order to form a
union within the plant. In their affidavit, executed on September 19, 1978, 9 the
private respondents stated: 1wph1.t
Na kami ay nagkampanya upang papirmahin namin sa 'membership form'
ng ULGWP ang nakakarami (majority) sa mga empleyado at nagharap
kaming petisyon sa Ministri ng Paggawa upang masertify ang aming
unyon sa Case No. R4-LRD-M-8-403- 78;
Na dahil sa aming pagreklamo sa Pangasiwaan na ibigay sa amin ang mga
biyaya sa ilalim ng Kodigo ng Paggawa at dahil sa pagtayo at
pagkampaniya namin sa mga empleyado na sumapi sa unyon ay kami ay
pinag-initan at tinanggal sa trabaho ng Pangasiwaan.
For sure, the petitioner corporation is guilty of unfair labor practice in interfering with
the formation of a labor union and retaliating against the employees' exercise of their
right to self-organization.
3. Finally, the petitioner claims that the "respondent Regional Director's finding, which
was affirmed by respondent Deputy Minister of Labor that the 'dismissal' of
respondent union members 'is conclusively presumed to be without a valid cause'
because petitioner failed to apply for clearance is contrary to the applicable Rules and
Regulations Implementing the Labor Code and is at variance with jurisprudence on the
matter.
The petitioner obviously refers to the following portion of the Order of the Regional
Director dated November 15, 1978: 1wph1.t
The record shows that complainants Norma Pineda, Vicky Penalosa,
Leonila Morales, Teresita Balmaceda, Adelina Valenzuela and Juanita
Reposar were employed by respondent in January, 1978, up to August,
1978. They worked continuously up to the time that their services were
terminated by respondent on the ground of abandonment. However,
respondent did not apply for clearance with this Office to terminate the
services of complainants. Hence, their dismissal is conclusively presumed
to be without a valid cause.
Indeed, prior clearance with the Ministry of Labor for the termination of the private
respondents is not necessary in this case since the private respondents have been
employed with the petitioner corporation for less than one (1) year. Section 1, Rule

XIV, Book V of the Implementing Rules and Regulations provides as

follows: 1wph1.t
Section 1. Requirement for shutdown or dismissal. No employer may
shut down his establishment or dismiss any of his employees with at least
one year during the last two years, whether the service is broken or
continuous, without prior clearance issued therefor in accordance with this
Rule. Any provision in a collective agreement dispensing with the
clearance requirement shall be null and void.
However, the questioned order finding the dismissal of the private respondents to be
without just cause is not based upon such absence of prior clearance alone. The
respondent Regional Director also found that the private respondents were dismissed
because of their union activities and for the failure of the petitioners to file a report in
lieu of prior clearance, as provided for in Section 11, Rule XIV, Book V of the
Implementing Rules and Regulations.t@lF The questioned order further reads, as
follows: 1wph1.t
Moreover, we find that complainants did not abandon their job. They were
terminated due to the fact that they actively campaigned and assisted in
the organization of their union.
Therefore, the dismissal of complainants is without valid cause,
considering that respondent failed to justify their action and report as
required under the Labor Code.
The error of the Regional Director in stating that the dismissal of the private
respondents was without just cause in view of the absence of prior clearance from the
Ministry of Labor is, thus, not sufficient to warrant a reversal of the questioned order.
WHEREFORE, the petition should be, as it is hereby, DISMISSED. The temporary
restraining order heretofore issued is hereby LIFTED and set ASIDE. With costs against
the petitioner.
SO ORDERED.
Barredo (Chairman), Aquino, Guerrero, Abad Santos, De Castro and Escolin, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-87672 October 13, 1989
WISE AND CO., INC., petitioner,
vs.
WISE & CO., INC. EMPLOYEES UNION-NATU AND HONORABLE BIENVENIDO G.
LAGUESMA, in his capacity as voluntary Arbitrator, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

GANCAYCO, J.:
The center of controversy in this petition is whether the grant by management of
profit sharing benefits to its non-union member employees is discriminatory against
its workers who are union members.
The facts are undisputed. On April 3,1987 the management issued a memorandum
circular introducing a profit sharing scheme for its managers and supervisors the
initial distribution of which was to take effect March 31, 1988.
On July 3,1987 the respondent union wrote petitioner through its president asking for
participation in this scheme. This was denied by petitioner on the ground that it had to
adhere strictly to the Collective Bargaining Agreement (CBA).
In the meantime, talks were underway for early negotiation by the parties of the CBA
which was due to expire on April 30, 1988. The negotiation thus begun earlier than
the freedom period. On November 11, 1987 petitioner wrote respondent union
advising the latter that they were prepared to consider including the employees
covered by the CBA in the profit sharing scheme beginning the year 1987 provided
that the ongoing negotiations were concluded prior to December 1987. However, the
collective bargaining negotiations reached a deadlock on the issue of the scope of the
bargaining unit. Conciliation efforts to settle the dispute on 29 March 1988 were made
but no settlement was reached.
On March 30, 1988, petitioner distributed the profit sharing benefit not only to
managers and supervisors but also to all other rank and file employees not covered by
the CBA. This caused the respondent union to file a notice of strike alleging that
petitioner was guilty of unfair labor practice because the union members were
discriminated against in the grant of the profit sharing benefits. Consequently,
management refused to proceed with the CBA negotiations unless the last notice of
strike was first resolved. The union agreed to postpone discussions on the profit
sharing demand until a new CBA was concluded. After a series of conciliation
conferences, the parties agreed to settle the dispute through voluntary arbitration.
After the parties submitted their position papers, a rejoinder and reply, on March
20,1989 the voluntary arbitrator issued an award ordering petitioner to likewise
extend the benefits of the 1987 profit sharing scheme to the members of respondent
union. 1 Hence, this petition wherein petitioner alleged the following grounds in
support thereof
I
THE HONORABLE VOLUNTARY ARBITRATOR ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE
ORDERED THE EXTENSION OF PROFIT SHARING BENEFITS TO THOSE
EMPLOYEES COVERED BY THE CBA DESPITE PATENT LACK OF FACTUAL
AND LEGAL BASIS THEREFOR IN THAT-

1. DISCRIMINATION PER SE IS NOT UNLAWFUL ESPECIALLY

WHEN THE EMPLOYEES ARE NOT SIMILARLY SITUATED.
2. THE TERMS AND CONDITIONS STIPULATED IN THE CBA
HAVE THE FORCE AND EFFECT OF A LAW BETWEEN THE
PARTIES. PRIVATE RESPONDENT, THEREFORE CANNOT
DEMAND, AS A MATTER OF RIGHT, WHAT IS NOT STIPULATED
IN THE CBA.
3. THE ACT OF THE UNION IN NEGOTIATING FOR THE
INCLUSION OF THE PROFIT SHARING BENEFIT IN THE PRESENT
CBA IS AN IMPLIED ADMISSION THAT THEY WERE NOT
ENTITLED TO IT IN 1987.
II
THE HONORABLE VOLUNTARY ARBITRATOR COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN HE
MADE THE CLEARLY BASELESS CONCLUSION THAT THE PETITIONER WAS
MOTIVATED BY ITS DESIRE TO DEFEAT OR OTHERWISE PREJUDICE THE
BASIC RIGHTS OF ITS EMPLOYEES. 2
The petition is impressed with merit.
Under the CBA between the parties that was in force and effect from May 1, 1985 to
April 30,1988 it was agreed that the "bargaining unit" covered by the CBA "consists of
all regular or permanent employees, below the rank of assistant supervisor, 3 Also
expressly excluded from the term "appropriate bargaining unit" are all regular rank
and file employees in the office of the president, vice-president, and the other offices
of the company personnel office, security office, corporate affairs office, accounting
and treasurer department . 4
It is to this class of employees who were excluded in the "bargaining unit" and who do
not derive benefits from the CBA that the profit sharing privilege was extended by
petitioner.
There can be no discrimination committed by petitioner thereby as the situation of the
union employees are different and distinct from the non-union employees. 5 Indeed,
discrimination per se is not unlawful. There can be no discrimination where the
employees concerned are not similarly situated.
Respondent union can not claim that there is grave abuse of discretion by the
petitioner in extending the benefits of profit sharing to the non-union employees as
they are two (2) groups not similarly situated. These non-union employees are not
covered by the CBA. They do not derive and enjoy the benefits under the CBA.
The contention of the respondent union that the grant to the non-union employees of
the profit sharing benefits was made at a time when there was a deadlock in the CBA
negotiation so that apparently the motive thereby was to discourage such non-union
employees from joining the union is not borne by the record. Petitioner denies this
accusation and instead points out that inspite of this benefit extended to them, some
non-union workers actually joined the respondent union thereafter.

Respondent union also decries that no less than the president of the petitioner agreed
to include its members in the coverage of the 1987 profit sharing benefit provided
that they would agree to an earlier negotiation for the renewal of the CBA which
expired in 1988. Be this as it may, since there was actually a deadlock in the
negotiation and it was not resolved and consummated on the period expected, private
respondent can not now claim that petitioner has a duty to extend the profit sharing
benefit to the union members.
The Court holds that it is the prerogative of management to regulate, according to its
discretion and judgment, all aspects of employment. This flows from the established
rule that labor law does not authorize the of the employer in the conduct of its
business. 6 such management prerogative may be availed of without fear of any
liability so long as it is exercised in good faith for the advancement of the employers'
interest and not for the purpose of defeating or circumventing the rights of employees
under special laws or valid agreement and are not exercised in a malicious, harsh,
oppressive, vindictive or wanton manner or out of malice or spite. 7
The grant by petitioner of profit sharing benefits to the employees outside the
"bargaining unit" falls under the ambit of its managerial prerogative. It appears to
have been done in good faith and without ulterior motive. More so when as in this
case there is a clause in the CBA where the employees are classified into those who
are members of the union and those who are not. In the case of the union members,
they derive their benefits from the terms and conditions of the CBA contract which
constitute the law between the contracting parties. 8 Both the employer and the union
members are bound by such agreement.
However, the court serves notice that it will not hesitate to strike down any act of the
employer that tends to be discriminatory against union members. It is only because of
the peculiar circumstances of this case showing there is no such intention that this
court ruled otherwise.
WHEREFORE, the petition is GRANTED and the award of respondent Voluntary
Arbitrator dated March 20,1989 is hereby REVERSED AND SET ASIDE being null and
void, without pronouncement as to costs.
SO ORDERED.
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.