Case Summary (G.R. No. 167474)
First Issue — Intra-Union Disaffiliation and Authority to Negotiate
The Reyes group unilaterally declared disaffiliation from ALU (Nov. 16, 1982) and sought to negotiate with BPI independently. The NLRC, after ministerial certification, fixed economic terms and mandated a new collective bargaining agreement to be signed by BPIEU-Metro Manila and ALU with BPI. The NLRC expressly did not decide the intra-union representative dispute, finding that issue belonged to the med-arbiter and that BLR had exclusive appellate jurisdiction over such intra-union matters.
BLR Ruling on Disaffiliation and Supreme Court Proceedings
BLR Director Trajano denied the Reyes group’s petition for direct certification, ruling the disaffiliation invalid because it was effected beyond the statutory “freedom period” (within 60 days before CBA expiration). The Reyes group sought certiorari relief from the Supreme Court and obtained a temporary restraining order; the Court later dismissed the petition and lifted the TRO. The Supreme Court upheld the BLR’s authority to rule on disaffiliation and reaffirmed that the representation dispute had to be resolved before the NLRC’s order for concluding a CBA could be enforced.
Mootness and Subsequent CBA Developments
The Court observed that the 1983 enforcement question had become largely moot by the time of later proceedings because the union situation and CBAs had evolved: BPIEU-Metro Manila subsequently concluded a separate CBA after a valid disaffiliation within a later freedom period; that CBA expired March 31, 1985; and a subsequent agreement extended effectivity to March 31, 1988. The Court therefore treated some earlier enforcement contentions as academic insofar as events overtook the practical relief sought.
Second Issue — Employer Transfers Following Merger and the Right of Management
Following BPI’s 1981 merger with Commercial Bank and Trust Company, BPI consolidated overlapping branches and transferred certain absorbed employees from Davao City to General Santos City. Three employees refused transfer and were dismissed, prompting strikes. The Minister of Labor and later the NLRC ordered return-to-work; BPI readmitted the employees to their original posts pending opening of the General Santos branch. Once the branch opened, NLRC ordered transfers of four employees (Dec. 5, 1984), two of whom eventually accepted the move; two female employees refused.
Legal Standard on Transfers and Court’s Ruling
The Court affirmed the management’s prerogative to transfer employees in the interest of efficient operation, subject to the limitation that transfers must not be vitiated by mala fides (i.e., improper motive to penalize or dismiss). The Court found no demonstration of improper motive: the transfer resulted from legitimate consolidation of duplicate branches after merger, involved no demotion or reduction in pay/benefits (a lateral transfer), and fell within express CBA terms authorizing transfers within delineated geographic areas (Southern Mindanao includes General Santos City). Accordingly, the NLRC’s decision directing transfers was upheld.
Dues Consignment Dispute and NLRC’s Allocation
After the Reyes group’s BLR petition was dismissed, competing motions sought release of consigned union dues deposited with the NLRC. The NLRC held that because the Reyes group’s disaffiliation had been disapproved, the local union remained BPIEU-ALU (under Valdez), and the dues consigned were payable to that union (portion for local union to Valdez-led BPIEU-ALU; portion for federation to ALU). The Supreme Court interpreted this as recognizing Valdez as the lawful head authorized to receive the union’s portion of the dues while not excluding the Reyes group members, who remained part of the original local by reason of the BLR ruling. The Court further noted that the matter had become largely academic because the Reyes group eventually effected a valid disaffiliation and thereafter would not be required to share future dues with ALU.
Attorney’s Fees: Nature of the Agreement and Statutory Limits
A resolution ratified by certain union signatories engaged Atty. Lacsina as counsel and authorized payment of five percent (5%) of total economic benefits for the first year of the new CBA to be checked off from lump-sum benefits and turned over to counsel. A Labor Arbiter ordered BPI to check off such amounts from employees who signed authorization. Petitioners challenged the deductions as contrary to Article 222 of the Labor Code, which generally prohibits imposing attorney’s or negotiation fees on individual union members and provides that attorney’s fees may be charged against union funds by agreement.
Court’s Analysis and Holding on Check-Offs to Counsel
The Court distinguished between forced, unauthorized deductions and voluntary individual authorizations: Article 222 bars compelled imposition of attorney’s fees on
...continue readingCase Syllabus (G.R. No. 167474)
Procedural Posture and Consolidation
- Three interrelated cases involving employee-employer relations between the Bank of the Philippine Islands (BPI) and its personnel were consolidated because they concerned the same parties and overlapping controversies.
- The consolidated matters appear in multiple G.R. dockets identified in the source: G.R. Nos. 69746-47, 76842-44, and 76916-17, all with the March 31, 1989 decision date.
- The Court recites a seven-year factual and procedural history leading to the consolidated resolution rendered by Justice Cruz, with concurrence by Justices Narvasa, Gancayco, Grino-Aquino, and Medialdea.
- The ultimate disposition in all the consolidated petitions was dismissal, with costs against the respective petitioners.
Parties
- Petitioners and contending factions:
- Bank of the Philippine Islands Employees Union-Metro Manila (BPIEU-Metro Manila), with internal factions led by Carlito Reyes (Reyes group) and Rolando Valdez (Valdez group).
- Associated Labor Unions (ALU), the mother federation.
- Bank of the Philippine Islands (BPI), the employer/respondent.
- Attorney Ignacio P. Lacsina, private respondent and counsel claiming attorney’s lien.
- Governmental and administrative bodies involved:
- National Labor Relations Commission (NLRC), which issued decisions and orders regarding bargaining and other labor issues.
- Bureau of Labor Relations (BLR), which adjudicated the validity of the disaffiliation and the right to direct certification.
- Minister of Labor, who in an intervening role sustained a transfer and issued a return-to-work order.
Factual Background — Negotiations, Disaffiliation and Certification
- The parties were negotiating a new collective bargaining agreement (CBA) to replace the one expiring March 31, 1982.
- Serious differences arose between BPIEU-Metro Manila and ALU during negotiations; BPIEU-Metro Manila manifested it would negotiate independently of ALU.
- ALU suspended all elective officers of BPIEU-Metro Manila led by President Carlito Reyes, who was replaced by Rolando Valdez as acting president.
- In retaliation, Reyes and his followers formally disaffiliated from ALU on November 16, 1982, claiming to be the legal and sole representatives of BPIEU-Metro Manila.
- Because no agreement could be reached on various economic issues, the dispute was certified by the Minister of Labor for compulsory arbitration and docketed in the NLRC as Certified Cases Nos. 0279 and 0281; these were later consolidated with BPI’s Manifestation and Motion for Interpleader and to Consign Union Dues due to conflicting claims for union dues by the Reyes and Valdez factions.
NLRC Decision of March 22–23, 1983 and BLR Jurisdictional Determinations
- On March 22, 1983, the NLRC fixed wage increases and other economic benefits and ordered them to be embodied in a new collective bargaining agreement to be concluded by “BPIEU-Metro Manila and ALU with BPI.”
- The NLRC explicitly did not decide the intra-union (Reyes vs. Valdez) dispute, holding that such intra-union matters fell under the original jurisdiction of the med-arbiter and the exclusive appellate jurisdiction of the Bureau of Labor Relations.
- The Reyes group sought direct certification from the BLR on the basis of their claimed disaffiliation; BLR Director Cresenciano Trajano denied the petition in a decision dated June 13, 1983, holding that the disaffiliation was invalid because it was done beyond the freedom period (within sixty days before expiration of the CBA on March 31, 1982).
- BLR disposition directed BPI to sign jointly with the BPIEU petitioner and ALU the collective agreement decreed by the Commission for the metropolitan Manila offices, with administration at the account of BPIEU and continuation of the dues-sharing scheme.
Judicial Proceedings, TRO, and Mootness Findings
- The Reyes group filed a petition for certiorari with a prayer for a temporary restraining order (TRO), which the Court issued on July 11, 1983 to prevent enforcement of the BLR decision.
- The Court eventually dismissed the Reyes petition for lack of merit and lifted the TRO on February 16, 1985, later denying reconsideration on March 27, 1985.
- The Valdez group filed a petition for certiorari and injunction (G.R. No. 69746) on February 1, 1985, seeking enforcement of the NLRC decision of March 22, 1983; they alleged grave abuse of discretion by NLRC in not enforcing the decision.
- The Court held it was proper for NLRC to abide by the TRO even if it strictly named only certain parties, reasoning that enforcement of the NLRC decision required prior resolution of which faction legitimately represented the employees; NLRC lacked jurisdiction to resolve that intra-union question.
- The Court noted the BLR’s June 13, 1983 disapproval of the Reyes disaffiliation as decisive at that time, but also observed that subsequent events rendered certain issues moot because a later valid disaffiliation produced a new CBA and those agreements had since expired (CBA expired March 31, 1985; later agreement expired March 31, 1988).
Second Issue — Employee Transfers, Strike, and Return-to-Work Orders
- Background: Following BPI’s 1981 merger with Commercial Bank and Trust Company, a COMTRUST branch in Davao City was closed and transferred to General Santos City. Seven employees absorbed by BPI were transferred to the General Santos branch pursuant to an earlier understanding; three employees (Glenna Ongkiko, Arturo Napales, and Gregorio Gito) refused to move and were dismissed by BPI.
- The refusal and dismissal triggered a strike by the Davao Chapter of BPIEU-ALU, followed by sympathy strikes from other local chapters.
- On October 19, 1983, the Minister of Labor sustained the transfers and issued a return-to-work order; the strikers ignored this and continued to challenge the transfers.
- The NLRC issued another return-to-work order which the strikers obeyed after BPI admitted the three recalcitrant employees to their original stations in Davao City pending opening of the General Santos branch.
- Upon inauguration of the General Santos City branch, BPI filed a motion to transfer the employees there as earlier sanctioned by the Minister; the NLRC granted the motion in its decision dated December 5, 1984.
- Napales and Gito agreed to move, while Ongkiko and Lennie Aninon (the latter initially agreed but later insisted on remaining in Davao) remained adamant and resisted transfer.
Legal Principle — Management’s Right to Transfer and Its Limitations
- The Court states the general rule: an employer has the right to transfer employees in the interest of the efficient and economic operation of its business; this is a management prerogative.
- The only limitation recognized is where the exercise of that right is vitiated by mala fides — i.e., an improper motive or a disguised attempt to remove or punish the employee sought to be transferred.
- On the record, mala fides was not established: the transfer was necessitated by the closure of the COMTRUST Davao branch because it was located across the street from the BPI branch after the merger; maintaining two branches was unjustified.
- The transfer involved only lateral reassignment and did not involve demotion in rank, salary, or other benefits.
- The operative CBA then in force expressly recognized management’s prerogatives, and provided a geographic limitation for permanent transfers within specified areas including the Southern Mindanao area; General Santos City was not disputed to be within Southern Mindanao.