Case Summary (G.R. No. 151021)
Facts and Background
The controversy arose from the retirement of two prominent union officers, Rosalinda Llagas (Union President and Dean of Student Affairs) and Paz Javier (Union Vice-President and Subject Area Coordinator), by Cainta Catholic School pursuant to a stipulation in the Collective Bargaining Agreement (CBA). The CBA allowed management to retire an employee who has either reached 60 years of age or has rendered at least 20 years of service with the last three years continuous, even if the employee had not attained the compulsory retirement age. Following their forced retirement in 1993, the Union initiated a strike, which led to intervention by the Secretary of Labor who certified the dispute to the NLRC and ordered the reinstatement of the employees pending resolution.
Issues Presented
- Whether the School’s retirement of Llagas and Javier constituted unfair labor practice or was a valid exercise of management prerogative under the CBA and the Labor Code;
- The legality of the strike conducted by the Union in response to the retirements;
- The entitlement of certain union officers to reinstatement and backwages.
NLRC Resolution
The National Labor Relations Commission ruled in favor of the School, holding that the retirement was legal and an exercise of a right under the CBA. The NLRC dismissed charges of unfair labor practice against the School and declared the strike illegal, resulting in the loss of employment status for the union officers. The NLRC justified Llagas's retirement on the ground that her managerial position created divided loyalties conflicting with union leadership, and Javier’s retirement was based on alleged poor performance and conduct issues.
Court of Appeals Ruling
The Court of Appeals reversed the NLRC, finding the retirement was a pretext to neutralize assertive union leaders and constituted unfair labor practice. It emphasized the union-busting motive, characterizing Llagas and Javier as militant union leaders whose removal was designed to "nip the union in the bud." The appellate court declared the strike legal, reasoning the no-strike clause was not violated, and dismissed the petition for contempt filed by the School.
Supreme Court Issues for Resolution
The Supreme Court was tasked with determining:
- The legality of the retirements under the CBA and Labor Code;
- The validity of the strike;
- Whether dismissed union officers are entitled to backwages.
Legal Analysis: Validity of Retirement
The Supreme Court reaffirmed the principle of management’s prerogative to retire employees as stipulated in the CBA and consistent with Article 287 of the Labor Code, which allows retirement at an age established in the CBA or after a certain number of years in service. The Court emphasized that retirement differs fundamentally from dismissal for cause and does not require justification aside from meeting the agreed criteria. The CBA provision allowing retirement after 20 years of service is valid and enforceable, as long as it complies with Labor Code minimum benefits.
The Court relied heavily on precedents such as Pantranco North Express, Inc. v. NLRC and Progressive Development Corporation v. NLRC, which upheld similar provisions permitting earlier retirement than the statutory age. The right to retire under agreed terms is a bilateral, voluntary agreement, and union members who ratify the CBA must abide by the terms, including early retirement clauses.
Rejection of Union’s Union-Busting Claim
The Court distinguished this case from unfair labor practice claims related to dismissal for union activities, as the retirement prerogative involves objective criteria less susceptible to subjective disputes. While the law protects union organizing rights and prohibits union-busting, this protection does not exempt union officers from retirement under a valid CBA provision. The Court noted that invalidating retirements based solely on the employee’s union position would create unfair exemptions and potentially promote entrenched union leadership.
The cited American case NLRB v. Ace Comb, Co. was found inapposite since it dealt with dismissal for cause rather than retirement. Moreover, under Philippine law, the prerogative to retire validly exercised under the CBA is not an unfair labor practice despite the employee’s union involvement.
Classification of Employees and Union Membership
The Court agreed with NLRC findings that Llagas was a managerial employee and Javier a supervisory employee based on their functions and job descriptions. Under the Labor Code, managerial employees are prohibited from union membership, and supervisory employees may only join unions composed of supervisors. Their union membership and leadership roles were therefore improper and invalidated. Consequently, the Union’s position to call a strike to defend their
Case Syllabus (G.R. No. 151021)
Facts and Background
- On March 6, 1986, Cainta Catholic School (the School) entered into a Collective Bargaining Agreement (CBA) with Cainta Catholic School Employees Union (the Union), effective January 1, 1986 until May 31, 1989, with a clause providing continuation if no new agreement was reached.
- Msgr. Mariano T. Balbago was appointed School Director in April 1987; following his appointment, the Union became inactive until it held elections on September 10, 1993, electing Rosalina Llagas as President and Paz Javier as Vice-President among other officers.
- On October 15, 1993, the School retired Llagas and Javier, each having over twenty (20) years of continuous service, invoking Section 2, Article X of the CBA permitting retirement upon either reaching age 60 or after 20 years of service with the last 3 years continuous.
- The Union responded with a strike starting November 8, 1993, which led the Secretary of Labor Ma. Nieves R. Confesor to certify the labor dispute to the National Labor Relations Commission (NLRC) for compulsory arbitration and ordering suspension of the retirements and reinstatement of Llagas and Javier pending further determination.
- On December 20, 1993, the School sought declaration of the strike as illegal; meanwhile, the Union filed an unfair labor practice charge which was subsequently consolidated with the certified case before the NLRC.
Issues for Resolution
- Whether the retirement of Llagas and Javier pursuant to the CBA was legal and valid under management prerogative.
- Whether the School committed an unfair labor practice in retiring these union officers.
- Whether the strike staged by the Union from November 8-12, 1993 was lawful.
- Whether certain union officers ordered dismissed were entitled to reinstatement and backwages.
- Whether Llagas and Javier, due to their positions, were managerial and supervisory employees, affecting their union membership and the legality of the strike.
NLRC Ruling and Court of Appeals Decision
- The NLRC on January 31, 1997, ruled the retirement as legal, being an exercise of the option granted management under the CBA, dismissed the unfair labor practice charge for lack of evidence, and declared the strike illegal resulting in loss of employment status for union officers including those retired.
- The Court of Appeals, on August 20, 2001, reversed the NLRC ruling, declaring the retirement of Llagas and Javier was an unfair labor practice aimed at union busting, based on their roles as militant, assertive leaders significantly involved in union activities and opposition to school management.
- The appellate court recognized anti-union bias from the School and ruled the strike legal, rejecting claims of pervasive violence during the strike and thus reinstating union officers except for some who were granted separation pay or declared deceased.
- The petition for contempt filed by the Union was dismissed by the Court of Appeals for lack of merit.
Petitioners' Arguments in the Supreme Court
- The School argued that the retirement complied with a clear right under the CBA, relying on prior Supreme Court rulings, including Pantranco North Express, Inc. v. NLRC and Bulletin Publishing Corporation v. Sanchez, which validated retirement pursuant to management prerogative under an agreed CBA.
- The School also contended that Llagas and Javier were managerial and supervisory employees respectively, thus ineligible for union membership under the Labor Code, further rendering issues of the strike and union repr