Facts:

The case involves the San Fernando Coca-Cola Rank-and-File Union (SACORU), represented by its president Alfredo R. Maraon, as the petitioner, and Coca-Cola Bottlers Philippines, Inc. (CCBPI) as the respondent. The events leading to the case began on May 29, 2009, when CCBPI issued termination notices to 27 regular employees who were members of SACORU, citing redundancy due to the ceding of two selling and distribution systems—the Conventional Route System (CRS) and Mini Bodega System (MB)—to Market Execution Partners (MEPs), also known as the Dealership System. The terminations were effective June 30, 2009, but the employees were placed on paid leave until that date. The affected employees were offered individual separation packages, which 22 accepted under protest.

SACORU contended that the new distribution systems would diminish union membership, amounting to union busting and violating the Collective Bargaining Agreement (CBA) against outsourcing regular positions. Conse...

Facts:

Background of the Case

Petitioner San Fernando Coca-Cola Rank-and-File Union (SACORU) filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Decision and Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 115985. The CA affirmed the Resolution of the National Labor Relations Commission (NLRC), which dismissed SACORU's complaint against respondent Coca-Cola Bottlers Philippines, Inc. (CCBPI) for unfair labor practice and declared the dismissal of 27 SACORU members due to redundancy as valid.

Termination of Employees

On May 29, 2009, CCBPI issued notices of termination to 27 rank-and-file, regular employees who were members of SACORU. The termination was based on redundancy due to the ceding out of two selling and distribution systems—the Conventional Route System (CRS) and Mini Bodega System (MB)—to Market Execution Partners (MEPS), also known as the "Dealership System." The termination was effective on June 30, 2009, but the employees were placed on a leave of absence with pay until the termination date. They were also granted individual separation packages, which 22 of them accepted under protest.

Union's Allegations

SACORU argued that the new selling and distribution systems would result in the diminution of union membership, amounting to union busting and a violation of the Collective Bargaining Agreement (CBA) provision against contracting out services or outsourcing regular positions. SACORU filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on June 3, 2009, citing unfair labor practice, among other grounds. A strike vote was conducted on June 11, 2009, where a majority decided to proceed with the strike.

DOLE Secretary's Intervention

On June 23, 2009, the Department of Labor and Employment (DOLE) Secretary assumed jurisdiction over the labor dispute and certified it for compulsory arbitration. The Secretary ordered the automatic enjoining of any strike or lockout and directed all employees to return to work under the same terms and conditions prevailing before the strike.

CCBPI's Defense

CCBPI argued that the new business scheme was a management prerogative designed to improve the system of selling and distributing products to reach more consumers at a lower cost. The company claimed that the CRS and MB systems were phased out to adopt a more cost-effective and simplified distribution system through MEPS. CCBPI also contended that the termination was made in good faith, with fair and reasonable criteria used to determine redundant positions. The terminated employees were paid separation benefits and executed quitclaims and releases.

NLRC and CA Rulings

The NLRC dismissed SACORU's complaint, finding no unfair labor practice and declaring the redundancy program valid. The CA affirmed the NLRC's decision, ruling that the NLRC did not commit grave abuse of discretion.

Issue:

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Ruling:

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Ratio:

1. Validity of the Redundancy Program: The Court upheld the redundancy program, finding that CCBPI complied with the legal requirements for redundancy, including written notice, payment of separation pay, good faith, and fair criteria for determining redundant positions. The program was implemented as a management prerogative to improve business efficiency and competitiveness.

2. No Unfair Labor Practice: The Court ruled that SACORU failed to provide substantial evidence to prove that CCBPI's redundancy program was motivated by ill will or aimed at interfering with the employees' right to self-organization. The reduction in union membership was a consequence of the redundancy program, not an act of union busting.

3. Violation of the Return-to-Work Order: The Court held that CCBPI violated the DOLE Secretary's return-to-work order by proceeding with the termination of the 27 employees after the Secretary assumed jurisdiction over the dispute. The status quo should have been maintained from the date of the return-to-work order (June 23, 2009) until the NLRC resolved the dispute on March 16, 2010. The employees were entitled to backwages and recomputed separation pay.

Conclusion:

The Supreme Court affirmed the validity of CCBPI's redundancy program and the absence of unfair labor practice but ruled that CCBPI violated the DOLE Secretary's return-to-work order. The 27 employees were entitled to backwages and recomputed separation pay.