Title
Universal Robina Sugar Milling Corp. vs. Nagkahiusang Mamumuo sa URSUMCO-National Federation of Labor
Case
G.R. No. 224558
Decision Date
Nov 28, 2018
URSUMCO's regular seasonal employees, performing necessary off-season work, were reclassified as permanent by the VA and CA, upheld by the Supreme Court, as employment status is determined by law, not the CBA.

Case Digest (G.R. No. 224558)
Expanded Legal Reasoning Model

Facts:

  • Parties and Background
    • Universal Robina Sugar Milling Corporation (URSUMCO) is a duly registered domestic corporation engaged in the sugar milling business and is the petitioner in the case.
    • Nagkahiusang Mamumuo sa URSUMCO-National Federation of Labor (NAMA-URSUMCO-NFL) is a legitimate labor organization and the respondent, acting as the sole and exclusive bargaining representative of URSUMCO’s regular monthly paid and daily paid rank-and-file employees.
  • The Collective Bargaining Agreement (CBA)
    • The parties successfully negotiated and entered into a CBA valid from January 1, 2010 to December 31, 2014.
    • Article VI, Section 2 of the CBA stipulates the employment classifications in URSUMCO, categorizing employees as either permanent/regular employees or regular seasonal employees.
  • Dispute Arising and Grievance Filing
    • Between August and September 2011, NAMA-URSUMCO-NFL filed several grievances on behalf of 78 regular seasonal employees under URSUMCO.
    • The grievances sought the conversion of employment status from regular seasonal to permanent regular, as well as the leveling of salaries, citing that the work performed by regular seasonal employees was essentially similar to that of regular employees.
  • Submission to Voluntary Arbitration and Position Papers
    • After the grievance machinery failed to resolve the issue, NAMA-URSUMCO-NFL requested voluntary arbitration before the National Conciliation and Mediation Board (VA) in Region VII, Cebu City.
    • In its position paper, NAMA-URSUMCO-NFL argued that:
      • Permanent/regular employees performed similar functions as regular seasonal employees.
      • Regular seasonal employees undertook tasks outside their traditional milling season roles, including skilled work and acting in supervisory positions during repairs and maintenance.
      • There were discrepancies in salary levels and work assignments between the two employee groups.
    • Conversely, URSUMCO maintained that:
      • The union was estopped from questioning the employment classification agreed upon in the CBA.
      • Regular seasonal employees only performed work during the milling season, with off-season tasks (such as repairs) being a valid exercise of management prerogative.
      • Converting all regular seasonal employees into permanent employees would have the effect of hiring employees solely for repair work, an anomaly to its organizational practice.
  • Decision of the Voluntary Arbitrator (VA) and Court of Appeals (CA)
    • On May 30, 2012, the VA ruled in favor of NAMA-URSUMCO-NFL, holding that URSUMCO’s practice of giving work to regular seasonal employees during the off-milling season amounted to a waiver of the strict effects of Article VI, Section 2 of the CBA.
      • The decision declared that concerned regular seasonal employees who amassed 300 days of service during the off-season be recognized as permanent/regular employees.
      • The VA denied the union's plea for standardization of the pay for employees holding the same positions.
    • On April 15, 2015, the CA affirmed the VA decision, citing:
      • The fact that the concerned employees were continuously engaged during the off-milling season undertaking repair and upkeep works essential for the smooth operation of URSUMCO’s machinery.
      • The legal position that the nature of employment is determined by law, not merely by contractual stipulations in the CBA.
    • A subsequent CA Resolution on April 21, 2016, denied URSUMCO’s motion for reconsideration.
  • Petition for Review and Arguments Raised
    • URSUMCO petitioned for a review on certiorari, challenging the CA decision on the ground that it was contrary to law and jurisprudence in sustaining the VA decision.
    • URSUMCO’s main arguments included:
      • The CBA is the law between the parties; therefore, its employment classifications must be strictly observed.
      • The assignment of regular seasonal employees to repair works was based on an express clause in the CBA, implying that their conversion was not justified.
      • The conversion of employees undermined its management prerogative and the predetermined nature of employment as project-based or seasonal.
    • In response, NAMA-URSUMCO-NFL maintained that:
      • The work performed by the concerned employees extended beyond the confines of seasonal work, as they were engaged even in the off-milling season.
      • The practice of engaging these workers for regular repairs placed them within the ambit of regular employment under existing legal norms and precedents.

Issues:

  • Whether the Court of Appeals committed an error in sustaining the VA decision which effectively converted URSUMCO’s regular seasonal employees to regular/permanent employees.
    • Whether the provisions of the CBA that classify employees based on seasonal or regular status are determinative in light of the actual work performed by the employees.
    • Whether the repeated engagement of regular seasonal employees during the off-milling season for repair works constitutes evidence of regular, continuous employment per labor law.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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