Case Digest (G.R. No. 88626) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In BPI Employees Union-Davao City-FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands (BPI), decided July 24, 2013 under the 1987 Constitution, the Union challenged BPI’s 2000 decision to outsource cashiering, distribution and bookkeeping functions at its Davao City branches to its subsidiary, BPI Operations Management Corporation (BOMC), duly created under BSP Circular No. 1388 (1993). BOMC, a separate entity owned exclusively by banks, had been providing support services—such as check-clearing, data processing, and cash servicing—to BPI-Metro Manila since 1993 without displacing any employees. On April 10, 2000 BPI merged with Far East Bank & Trust Company (FEBTC), and twelve (12) former FEBTC personnel were transferred to BOMC rather than absorbed into BPI, prompting the Union’s protest dated June 14, 2000. BPI declined to treat the matter as grievable under the collective bargaining agreement (CBA) and instead convened a Labor-Management Conference, where manageme Case Digest (G.R. No. 88626) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Service Agreement
- BOMC was created under BSP Circular No. 1388 (1993) as a separate subsidiary of BPI to provide support services (e.g., check clearing, bank statements, fund transfers, card production, operations accounting, cash servicing).
- A service agreement between BPI and BOMC was implemented in Metro Manila branches; functions were transferred without displacing any BPI employees, who were reassigned elsewhere.
- Davao implementation and Merger
- On January 1, 1996, the same service agreement was extended to BPI’s Davao City branch.
- Following the BPI–FEBTC merger (effective April 10, 2000), BOMC assumed BPI’s cashiering and FEBTC’s cashiering, distribution, and bookkeeping functions; 12 former FEBTC employees were transferred to BOMC.
- Union Protest and Procedural History
- BPI Employees Union-Davao City-FUBU objected to the outsourcing and personnel transfer, claiming violation of the union-shop clause and deprivation of bargaining-unit membership. A formal protest was filed on June 14, 2000; BPI declined to treat it as a CBA grievance and proposed a Labor-Management Conference.
- The Union filed a strike notice before the NCMB alleging (a) interference with self-organization via contracting out, (b) duty-to-bargain violation, and (c) union busting. The DOLE Secretary certified the dispute to the NLRC for compulsory arbitration.
- The NLRC (Dec 21, 2001 & Aug 23, 2002 Resolutions) dismissed the ULP charges, ruling that outsourcing to BOMC was a valid exercise of management prerogative and did not interfere with employees’ rights.
- The CA (April 5, 2006 Decision; Aug 17, 2006 Resolution) affirmed the NLRC, finding its factual conclusions supported by substantial evidence, and held that DOLE DO 10 did not apply to banking.
- Supreme Court Petition
- The Union sought certiorari under Rule 45, complaining that the CA failed to address the alleged CBA breach and improperly excluded DOLE DO 10.
- BPI defended the service agreement as lawful under BSP Circular 1388, within its management prerogative, and consistent with an express CBA clause reserving operational rights to management.
Issues:
- Did BPI’s outsourcing of functions and transfer of former FEBTC employees to BOMC violate the law and the CBA, constituting an unfair labor practice?
- Does DOLE Department Order No. 10 apply to restrict BPI’s contracting-out of banking functions, or are BSP regulations controlling?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)