Case Summary (G.R. No. 123938)
Petitioner and Respondent
Petitioners seek review by certiorari of the NLRC’s resolution affirming the Labor Arbiter’s dismissal of their unfair labor practice, illegal lockout/dismissal, collective bargaining violation, underpayment of wages, and damages claims. Respondents NLRC and Empire Food Products defend the lower bodies’ factual findings and legal conclusions.
Key Dates
• October 23, 1990 – Memorandum of Agreement recognizing LCP as exclusive bargaining agent.
• January 23, 1991 – Petitioners filed NLRC Case No. RAB-III-01-1964-91.
• April 14, 1992 – Labor Arbiter’s decision directing reinstatement.
• July 27, 1994 – Labor Arbiter’s decision dismissing petitioners.
• March 29, 1995 – NLRC resolution affirming dismissal.
• May 21, 1998 – Decision date of this Court.
Applicable Law
1987 Philippine Constitution (Sec. 3, Art. 13: right to self-organization, security of tenure, protection to labor) and Labor Code (as amended by R.A. No. 6715; Omnibus Rules Implementing the Labor Code; Rules and Regulations on 13th Month Pay and holiday pay).
Procedural Background
Petitioners initially filed money and labor standards claims and sought direct certification of LCP. They entered a certified Memorandum of Agreement with Empire Food Products, agreed to provisional withdrawal of one NLRC case, and recognized LCP as exclusive bargaining agent. Subsequent negotiations stalled, prompting petitioners to file unfair labor practice and related complaints.
Labor Arbiter’s First Decision and Reinstatement
In April 1992, the Labor Arbiter, noting respondent’s failure to maintain payroll records, ordered the reinstatement of all complainants (except those who resigned or executed quitclaims) but did not resolve substantive issues.
NLRC’s 1992 Resolution and Remand
The NLRC found grave abuse of discretion, procedural and factual errors in the Arbiter’s decision, and remanded for further proceedings. It criticized the Arbiter for overlooking petitioner testimony and lacking a dispositive fallo.
Labor Arbiter’s Second Decision Dismissing Complaint
On July 27, 1994, after remand, the Arbiter dismissed petitioners’ complaint for “utter lack of merit.” He ruled:
– No prima facie proof of unfair labor practice or union busting;
– Memorandum of Agreement provisions were resolutory conditions outside NLRC jurisdiction;
– Underpayment claims failed because petitioners were piece‐rate workers paid above minimum wage;
– Moral and exemplary damages unsupported by malice or fraud.
NLRC’s Affirmation on March 29, 1995
The NLRC affirmed the Arbiter, upholding factual findings and legal conclusions on absence of unfair labor practice, invalidity of using the MOA as an obligation, and lack of wage underpayment.
Issues in the Certiorari Petition
- Whether the NLRC gravely abused discretion by ignoring favorable evidence, jurisprudence, and due process.
- Whether petitioners’ rights to self-organization, security of tenure, protection to labor, humane conditions, and due process were violated.
- Whether petitioners were illegally or constructively dismissed.
- Entitlement to reinstatement with backwages, benefits, damages, and attorneys’ fees.
Court’s Analysis on Factual Findings and Grave Abuse
The Court refuses to defer to NLRC findings where the Arbiter’s reversal from reinstatement to dismissal lacked explanation and the NLRC’s resolution failed to discuss the record under the substantial evidence standard. Both bodies ignored prior remand instructions and overlooked critical testimony and documentary evidence.
Abandonment, Security of Tenure, and Due Process
The Court holds that petitioners did not abandon their work by missing one day’s shift and immediately filing unfair labor practice claims two days later. Precedent requires a clear, deliberate, and unjustified refusal to resume employment. Respondents failed to prove just cause and did not serve the required written notice of dismissal for abandonment, violating security of tenure and procedural due process.
Separation Pay in Lieu of Reinstatement and Back Wages
Given the impracticality of reinstatement—due to elapsed time and strained relations—petitioners are entitled to separation pay at one month’s salary per year of service (fractions of six months counted as one year) and full back wages. The NLRC must compute individual back wages, days worked, and production levels for piece‐rate employees.
Regular Employee Status and Fringe Benefits
Despite piece‐rate compensation, petitioners are regular employees:
• Their repacking work is necessary to the business.
• They worked year-round, not project-based.
• They served for extended pe
Case Syllabus (G.R. No. 123938)
Facts of the Case
- Ninety-nine rank-and-file employees of Empire Food Products were organized under the Labor Congress of the Philippines (LCP).
- Petitioners filed:
• A money-claim and labor standards complaint (NLRC Case No. RAB-III-10-1817-90).
• A petition for direct certification of LCP as sole bargaining agent (Case No. R0300-9010-RU-005). - On October 23, 1990, LCP (through President Navarro) and Empire Food Products (through Gonzalo and Evelyn Kehyeng) executed a Memorandum of Agreement recognizing LCP as exclusive bargaining agent and setting terms on wage adjustment, union dues deductions, grievance procedure, and provisional withdrawal of NLRC case.
- On October 24, 1990, Mediator-Arbiter Cortez approved the agreement and certified LCP as the bargaining agent.
- Petitioners submitted a collective bargaining proposal on November 9, 1990.
- On January 23, 1991, petitioners filed NLRC Case No. RAB-III-01-1964-91 against private respondents for:
• Illegal lockout and/or dismissal (unfair labor practice).
• Union busting (harassment, threats, interference).
• Violation of the Memorandum of Agreement.
• Underpayment of wages under R.A. No. 6640 and R.A. No. 6727.
• Actual, moral, and exemplary damages.
Initial Labor Arbiter Decision and Reinstatement (April 14, 1992)
- After hearings and position papers, Labor Arbiter Santos:
• Dismissed all substantive charges for lack of merit.
• Directed reinstatement of individual complainants (except those who resigned or signified quitclaims) due to respondent’s failure to maintain accurate payroll records.
• Warned against any harassment or retaliation upon reinstatement.
NLRC First Resolution and Remand (July 21, 1992)
- NLRC vacated the April 14, 1992 decision and remanded for further proceedings, finding:
• Complainants did present witnesses (Navarro Jr., individual employees) whose testimonies the Arbiter overlooked.
• The decision lacked a proper dispositive portion (fallo) executable by courts.
• Need for the Arbiter to consider all issues of fact and law and render a complete decision.
Subsequent Labor Arbiter Decision (July 27, 1994)
- Labor Arbiter Santos concluded:
• Petitioners failed to prove unfair labor practices, lockout, dismissal, harassment, or threats with definiteness and clarity—mere generalizations in position papers were insufficient.
• Illegal lockout charge failed because witnesses testified that employees simply refused to report on January 21, 1991, amounting to job abandonment.
• No binding obligation under the Memorandum of Agreement to discuss pending NLRC case issues during CBA negotiation, as the clause was a resolutory condition.
• Underpayment claims unsubstantiated because petitioners were piece-rate workers who received at least the minimum wage.
• Moral and exemplary damages unproven in absence of malice, bad faith, or fraud. - Result: Complaint dismissed for utter lack of merit.