Title
Manggagawa ng Komunikasyon sa Pilipinas vs. Philippine Long Distance Telephone Co., Inc.
Case
G.R. No. 190389
Decision Date
Apr 19, 2017
PLDT's 2002 redundancy program, upheld as valid due to technological shifts, required adjusted separation pay for long-term employees, rendering return-to-work orders moot.
labor organization
unfair labor practices
redundancy program

Case Summary (G.R. No. 190389)

Factual Background: Notices of Strike and the Alleged Unfair Labor Practices

On June 27, 2002, MKP filed a notice of strike with the National Conciliation and Mediation Board, accusing PLDT of unfair labor practice for transferring employees of its Provisioning Support Division to Bicutan, Taguig. MKP amended this first notice of strike twice. In the second amendment dated November 4, 2002 (docketed as NCMB-NCR-NS No. 11-405-02), MKP alleged unfair labor practices in three connected respects. First, MKP alleged PLDT’s purported abolition of the Provisioning Support Division and asserted that this, together with consequential redundancy and the farming out of jobs to casuals and contractuals, violated the duty to bargain collectively in good faith. Second, MKP alleged PLDT’s refusal to honor commitments to provide MKP with comprehensive plans for personnel downsizing, reorganization, and closure of exchanges violated the duty to bargain collectively in good faith. Third, MKP alleged PLDT’s continued hiring of contractual, temporary, project, and casual employees for regular jobs performed by union members allegedly decimated union membership and denied the right to self-organization.

While the first notice of strike was still pending, MKP filed a second notice of strike on November 11, 2002 (docketed as NCMB-NCR-NS No. 11-412-02). In this second notice, MKP accused PLDT of restructuring its Greater Metropolitan Manila Operation Services with an effective date of December 31, 2002, and of closing its traffic operations at several operator services locations—Batangas, Calamba, Davao, Iloilo, Lucena, Malolos, and Tarlac—also effective December 31, 2002. MKP contended that these moves imperiled the job security of 503 of MKP’s members and would substantially decimate the bargaining unit, and that the alleged closure and restructuring were treacherous and thus violative of PLDT’s duty to bargain collectively in good faith. MKP further emphasized PLDT’s supposed prior commitments regarding plans for downsizing and closures, including that PLDT had declared that the Davao operator services would not be closed, which MKP treated as inconsistent with the alleged closure and restructuring.

Strike and PLDT’s Redundancy Declaration

MKP went on strike on December 23, 2002. On December 31, 2002, PLDT declared that only 323 employees were redundant because it was able to redeploy 180 of the 503 affected employees to other positions. On January 2, 2003, the Secretary of Labor and Employment certified the labor dispute for compulsory arbitration pursuant to Article 263(g) of the Labor Code, as amended, and issued an order enjoining the strike. The Secretary’s order required striking workers to return to work within twenty-four (24) hours from receipt, with an exception for those terminated due to redundancy, and it directed the employer to accept the striking workers under the same terms and conditions prevailing prior to the strike.

MKP challenged the Secretary’s return-to-work order before the Court of Appeals via CA-G.R. SP No. 76262, arguing that the order created an improper distinction among striking workers as to who should return to work.

Appellate Review of the Return-to-Work Order and PLDT’s Subsequent NLRC Case

The Court of Appeals granted MKP’s petition on November 25, 2003, setting aside the Secretary’s assailed order. PLDT appealed to the Supreme Court in G.R. No. 162783. On July 14, 2005, the Supreme Court upheld the Court of Appeals decision and directed PLDT to readmit all striking workers under the same terms and conditions prevailing before the strike. The Supreme Court reasoned that Article 263(g) was clear and unequivocal in requiring ALL striking or locked out employees to immediately return to work and for the employer to resume operations and readmit ALL workers under the same terms and conditions prevailing before the strike or lockout.

After the strike and during the compulsory arbitration process, the NLRC resolved MKP’s unfair labor practice charges against PLDT. On October 28, 2005, the NLRC dismissed MKP’s charges. It ruled that PLDT’s 2002 redundancy program was valid and did not constitute unfair labor practice. The NLRC grounded its conclusion on evidence that PLDT experienced a decline in subscribers for long distance calls and in fixed line services, which it associated with technological advances in communications. It held that the termination of employees due to redundancy was therefore legal. On January 31, 2006, the NLRC denied MKP’s motion for reconsideration.

Court of Appeals Proceedings: CA-G.R. SP Nos. 94365 and 98975

MKP then filed a Petition for Certiorari before the Court of Appeals on May 8, 2006, docketed as CA-G.R. SP No. 94365, assailing NLRC resolutions that upheld PLDT’s redundancy program.

Separately, MKP filed a petition in CA-G.R. SP No. 98975, challenging the Secretary’s August 11, 2006 dismissal of MKP’s motion for execution and the Secretary’s March 16, 2007 order denying reconsideration. These were tied to MKP’s effort to implement the Supreme Court directive that striking workers be readmitted under the terms prevailing before the strike, despite the NLRC’s dismissal of the unfair labor practice charges.

The Court of Appeals consolidated CA-G.R. SP No. 94365 and CA-G.R. SP No. 98975, and dismissed MKP’s appeals on August 28, 2008, later denying reconsideration on November 24, 2009.

For CA-G.R. SP No. 94365, the Court of Appeals held that the NLRC did not commit grave abuse of discretion when it found PLDT’s redundancy declaration justified and supported by substantial evidence. The Court of Appeals observed that PLDT’s redundancy program was transparent and forthright in its implementation and that PLDT had redeployed 180 of the 503 affected employees.

For CA-G.R. SP No. 98975, the Court of Appeals confirmed that the Secretary’s reinstatement order, as understood from the earlier return-to-work direction, indicated that all employees—including those separated effective December 31, 2002—should be reinstated pendente lite. However, it ruled that this reinstatement direction became moot because the NLRC had upheld the validity of the redundancy dismissals. The Court of Appeals also denied MKP’s prayer for salary payments for the period from January 3, 2003 to April 29, 2006, explaining that the situation was not analogous to a case of illegal dismissal later reversed on appeal in a way that would justify those wages.

The Parties’ Contentions Before the Supreme Court

MKP pursued review on certiorari, presenting two main issues. First, it asserted that the Court of Appeals erred in upholding the validity of PLDT’s 2002 redundancy program. MKP maintained that employees in both the Provisioning Support Division and in the Operator Services Section were declared redundant in 2002. It claimed that the total number of rank-and-file positions actually declared redundant was 538—35 in the Provisioning Support Division and 503 in the Operator Services Section—and it argued that PLDT failed to submit evidence to support the redundancy of the 35 Provisioning Support Division employees. It pointed out that PLDT allegedly only notified the Department of Labor and Employment of closure of traffic operations in the Regional Operator Services affecting 392 employees, and of restructuring of Greater Metropolitan Manila Operator Services affecting 111 employees, asserting that no notice was given regarding the closure or redundancy of the Provisioning Support Division.

MKP also contended that the NLRC committed grave abuse of discretion when it disallowed written interrogatories MKP submitted. Second, regarding the return-to-work order, MKP argued that the order’s practical effect should not be treated as moot because the employees affected by redundancy should still be entitled to reinstatement or backwages for the period from the Secretary’s January 2, 2003 directive up to the time when the NLRC decision became final and executory, citing Garcia v. Philippine Airlines, Inc.

PLDT countered that the validity of redundancy for the Provisioning Support Division employees was raised by MKP only for the first time on appeal. It insisted that the core issue was whether PLDT was obliged to transfer Provisioning Support Division employees, not whether redundancies were valid. It also asserted that affected Provisioning Support personnel had the opportunity to apply for another division but did not do so. On procedural matters, PLDT argued that discovery proceedings were not allowed in the NLRC under its rules, so interrogatories could not be treated as a procedural right. As to execution and wages, PLDT argued that the Court of Appeals and the Supreme Court set aside the Secretary’s January 2, 2003 order but did not directly order reinstatement; it emphasized that what controls execution is the dispositive or decretal statement. It further argued that the reinstatement claims were moot because the NLRC upheld redundancy. Finally, PLDT maintained that Garcia was inapplicable because the case did not involve a Labor Arbiter’s reinstatement award later reversed.

Supreme Court’s Approach to Review: Rule 45 and Grave Abuse of Discretion

The Supreme Court held that the Petition for Review on Certiorari under Rule 45 limited it to questions of law, and that in labor cases such review could prosper only if the Court of Appeals failed to correctly determine whether the NLRC committed grave abuse of discretion. It reiterated doctrinal parameters for grave abuse of discretion, defining it as capricious and whimsical action that is equivalent to lack of jurisdiction, and requiring that the abuse be so flagrant as to amount to a refusal to perform duty or act as provided by law.

The Court adopted a framework distinguishing Rule 45 review (correctness of the Court of Appeals action for jurisdictional error) from review on the merits of the NLRC decision. It therefore focused its evaluation on whether the Cour

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