Facts:

The case revolves around a special civil action for certiorari filed by AG&P United Rank and File Association (AG&P URFA) and several individual petitioners against the National Labor Relations Commission (NLRC) and Atlantic Gulf and Pacific Company of Manila, Inc. The controversy began when the union, representing the rank-and-file employees of the company, declared a strike on September 22, 1987 after a deadlock in collective bargaining negotiations. On February 10, 1988, the Secretary of Labor and Employment ruled on the dispute, which led to an appeal from both parties. Meanwhile, on January 11, 1988, the company announced a redundancy program citing a financial crisis, resulting in layoffs of approximately 177 employees, among whom were several union members. These employees received separation pay and signed waivers concerning their termination. Following this, on March 14, 1988, the petitioners filed a complaint for illegal dismissal and unfair labor practice. Lab

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Facts:

Parties and Context

• The petitioner union, a duly certified bargaining agent, represents the rank and file employees of the respondent corporation.
• The individual complainants are officers and members of the petitioner union.
• The respondent is Atlantic Gulf and Pacific Company of Manila, Inc., a private corporation facing economic difficulties.

Labor Dispute and Strike

• A deadlock occurred during negotiations for a collective bargaining agreement between the union and the company.
• The union declared a strike on September 22, 1987 to assert its rights amidst the stalled negotiations.
• Shortly after, the Department of Labor and Employment assumed jurisdiction over the dispute, leading to Secretary Franklin Drilon rendering a decision on February 10, 1988.

Cost-Cutting Measures and the "Redundancy Program"

• Prior to the Secretary’s decision on January 11, 1988, the company’s president announced a series of cost-cutting measures aimed at forestalling impending financial losses.
• Among these measures was a so-called "redundancy program," which was implemented on March 1, 1988, resulting in the layoff of approximately 177 employees, including some union officers and members.
• Affected employees received separation pay equivalent to one month’s pay for every year of service and executed documents of waiver, thereby acknowledging the regularity of their separation and relinquishing further claims related to their dismissal.

Filing of the Complaint and Initial Adjudication

• On March 14, 1988, petitioners filed a complaint for illegal dismissal and unfair labor practice following the implementation of the cost-cutting measures.
• Labor Arbiter Quintin Mendoza dismissed the complaint, holding that:
• The "redundancy program" was necessary for the company’s survival.
• The rehiring of some employees was a reflection of the company’s policy of giving preference to former workers.
• The acceptance of separation pay and benefits by the employees constituted a waiver of their right to contest the dismissal.

NLRC Proceedings and Reconsiderations

• The Third Division of the NLRC reversed Labor Arbiter Mendoza’s ruling on appeal, finding that:
• The company had made substantial profits during 1983–1986, casting doubt on the justification for dismissal.
• The private respondent was liable for illegal dismissal and unfair labor practice, warranting the reinstatement of the petitioners with back wages and additional attorney’s fees.
• On May 29, 1992, the First Division of the NLRC, following a reorganization under R.A. No. 6715, reconsidered the Third Division’s decision and reinstated the labor arbiter’s ruling:
• It admitted belated evidence of losses sustained by the company from 1987 up to 1990.
• The additional evidence confirmed that the anticipated losses were substantial, imminent, and justified the retrenchment under the conditions for lawful dismissal.
• A motion for reconsideration filed by petitioners was denied on October 29, 1992, solidifying the NLRC’s decision.

Grounds of the Petition

• Petitioners contended that the NLRC abused its discretion by:
• Admitting evidence of losses not introduced during the labor arbiter’s proceedings.
• Declaring the redundancy program implemented on March 31, 1988, as legal.
• Failing to declare the respondent guilty of illegal dismissal and unfair labor practice.
• Not nullifying the quitclaims and release documents executed by the petitioners.
• The petitioner’s arguments centered on the allegation that the measures were a union-busting scheme rather than a necessity resulting from economic losses.

Issue:

Admissibility of Belated Evidence

• Whether the NLRC had the discretion to admit additional evidence of losses on appeal, despite it not being presented before the labor arbiter.
• Whether the explanation provided by the company for the delayed presentation of the audit (conducted by Sycip Gorres Velayo and Co. only in 1991) sufficiently justified its inclusion.

Legality of the "Redundancy Program"

• Whether the program was a bona fide cost-cutting measure or an unlawful union-busting scheme masquerading as a redundancy initiative.
• The proper interpretation of "redundancy" versus "retrenchment" within the context of Art. 283 of the Labor Code.

Validity of the Waivers and Quitclaims

• Whether the documents signed by the employees, which waived their right to challenge their dismissal, are valid and binding.
• If such waivers, executed voluntarily under the company’s circumstances of financial difficulty, are contrary to public policy or represent a reasonable settlement.

Abuse of Discretion by the NLRC

• Whether the NLRC gravely abused its discretion in handling the evidence and configuring the legal ground for dismissal.
• Whether the reinstatement of the labor arbiter’s decision and the subsequent denial of the petition are justified within the framework of managerial prerogative.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)