Facts:

This case revolves around Bankard, Inc. as the petitioner and the National Labor Relations Commission (NLRC), specifically its First Division, along with the Bankard Employees Union-AWATU as the respondents. On June 26, 2000, the Union submitted its first Notice of Strike (NOS), docketed as NS-06-225-00, to the National Conciliation and Mediation Board (NCMB). The Union alleged various unfair labor practices by Bankard, including job contractualization, outsourcing jobs, implementing a manpower rationalization program, and discrimination against union members. An initial conference was held on July 3, 2000, and a strike vote was conducted on July 5, 2000, where members voted for a strike. Responding to the situation, Bankard requested the Office of the Secretary of Labor to intervene, which led Labor Secretary Bienvenido Laguesma to certify the labor dispute to the NLRC on July 12, 2000.

Later, the Union declared a deadlock in collective bargaining agreement (CBA) negotiations o

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Facts:

Chronology and Initiation of Dispute

• On June 26, 2000, the Bankard Employees Union-AWATU filed its first Notice of Strike (NOS) before the National Conciliation and Mediation Board (NCMB), alleging several acts of unfair labor practices by Bankard, Inc. These allegations included:
• Job contractualization
• Outsourcing/contracting-out jobs
• Implementation of a manpower rationalization program (MRP)
• Discrimination
• Subsequent proceedings in early July 2000:
• July 3, 2000 – An initial conference was held to clarify the issues raised in the NOS.
• July 5, 2000 – The Union conducted its strike vote balloting, where members voted in favor of a strike.
• Efforts to secure jurisdiction over the dispute:
• On July 10, 2000, Bankard requested that the Office of the Secretary of Labor assume jurisdiction over the labor dispute or certify it for compulsory NLRC arbitration.
• On July 12, 2000, Secretary Bienvenido Laguesma of the Department of Labor and Employment (DOLE) issued an order certifying the dispute to the NLRC.

Escalation and Further Allegations

• On July 25, 2000, the Union declared a deadlock in bargaining for a Collective Bargaining Agreement (CBA).
• On July 26, 2000, the Union filed its second NOS, this time alleging bad faith in bargaining by Bankard.
• Bankard again sought DOLE’s intervention, and on August 9, 2000, an order certifying the dispute to the NLRC was issued.
• Despite these certification orders—which enjoined the Union from engaging in strike or lockout actions—the Union went on strike on August 11, 2000.

Issues Presented During Conciliatory Conferences and Position Papers

• The parties, during mandatory conferences and upon submission of respective position papers, agreed to focus on two key issues:
• Whether job contractualization, outsourcing, or contracting out constitutes an unfair labor practice (ULP) on the part of management.
• Whether management engaged in bad faith bargaining with the Union.

Management’s Policy and the Union’s Allegations

• Bankard’s Position:
• In December 1999, Bankard implemented the Manpower Rationalization Program (MRP) as a cost-cutting and efficiency measure in the wake of changing industry demands.
• The MRP involved offering employees a voluntary resignation package, which included separation pay and, for those under the retirement plan, additional benefits.
• Following the MRP, a significant number of employees, particularly from the Phone Center and Service Fulfilment Division, availed themselves of the program.
• To address operational needs post-MRP, Bankard contracted an independent agency to handle its call center requirements.
• In negotiations regarding the CBA (a re-negotiation of the 1997-2002 agreement), Bankard maintained that job contractualization or outsourcing was a legitimate exercise of management prerogative and did not amount to an act of unfair labor practice.
• The Union’s Position:
• The Union contended that contractualization had been practiced as early as 1995 in various departments such as Records Communications Management and others, deliberately reducing the number of regular employees.
• The Union argued that such practices, coupled with a freeze in hiring for regular positions and the implementation of the MRP, were specifically designed to restrict union growth by replacing regular employees with contractual workers who were not eligible for union membership.
• The Union further alleged that Bankard’s negotiation proposals were intentionally feeble, thereby constituting bad faith bargaining.

Administrative and Lower Court Proceedings

• NLRC Proceedings:
• On May 31, 2001, the NLRC issued a Resolution finding that Bankard had committed acts constituting unfair labor practices under Article 248(c) of the Labor Code.

- The NLRC held that the reduction of regular employees, facilitated by the MRP and subsequent outsourcing, effectively reduced union membership and interfered with the employees’ right to self-organization.

Issue:

Whether the practice of job contractualization, outsourcing, or contracting out of jobs constitutes an unfair labor practice (ULP) under Article 248(c) of the Labor Code.

• Examination of whether the implementation of the MRP and subsequent outsourcing inherently interfered with employees’ rights to self-organization by reducing union membership.

Whether Bankard, Inc. engaged in bad faith bargaining with the Union during the negotiation of the reconstituted CBA.

• Evaluation of the conduct and negotiation proposals of the management to determine if they were designed to force a bargaining deadlock or if they were merely reflective of a legitimate management prerogative.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)