Case Summary (G.R. No. 85985)
Factual Background
On March 15, 1985, PAL unilaterally issued a revised Code of Discipline, superseding its 1966 version. Limited copies were distributed, and certain employees were disciplined under the new rules. PALEA protested that the Code was penal in nature, arbitrarily implemented without adequate notice or discussion, and thus constituted an unfair labor practice.
Procedural History
• August 20, 1985: PALEA filed ULP Complaint No. NCR-7-2051-85 before the NLRC, invoking Articles 249(E), 253 of the Labor Code.
• PAL moved to dismiss, invoking its management prerogative and existing CBA.
• November 7, 1986: Labor Arbiter ruled no ULP but found Sections 1 and 7 of the Code unreasonable and ordered PAL to furnish copies, reconsider disciplined cases, and negotiate disputed provisions with PALEA.
• August 19, 1988: NLRC affirmed dismissal of the ULP charge but modified relief to require review and discussion of the Code with PALEA, issuance of copies to all employees, and reconsideration of pending cases.
• August 13, 1993: Supreme Court resolution of PAL’s certiorari petition.
Issue
Whether an employer’s prerogative to formulate and implement a Code of Discipline may be exercised unilaterally or must be shared with the union under the 1987 Constitution and prevailing labor policy.
Applicable Law
• 1987 Philippine Constitution: State policy to promote labor–management cooperation and worker participation in decision-making.
• Labor Code (P.D. 442), Articles 249(E), 253, Article 211 (as amended by R.A. 6715, March 2, 1989).
• CBA clause recognizing management rights “to make and enforce…rules and regulations” subject to “just, reasonable, humane and/or lawful manner.”
• Jurisprudence: Cruz v. Medina, San Miguel Brewery Sales Force Union v. Ople, University of Sto. Tomas v. NLRC, Abbott Laboratories v. NLRC, Callanta v. Carnation Philippines, Employees Association of Phil. American Life v. NLRC.
Supreme Court Analysis
- Management prerogatives, though substantial, are circumscribed by law, CBA, and principles of fair play (U. Sto. Tomas v. NLRC; Abbott Laboratories v. NLRC).
- The disputed provisions (Sections 1, 2 & 7) of PAL’s Code affect employees’ security of tenure and property rights (Callanta v. Carnation).
- The 1987 Constitution and R.A. 6715 establish a policy favoring transparency and employee par
Case Syllabus (G.R. No. 85985)
Facts
- On March 15, 1985, Philippine Airlines, Inc. (PAL) completely revised its 1966 Code of Discipline, circulated it among employees, and immediately implemented its provisions.
- Several employees were subjected to disciplinary measures under the new Code without prior notice, discussion, or concurrence of the Philippine Airlines Employees Association (PALEA).
- On August 20, 1985, PALEA filed an unfair labor practice complaint (Case No. NCR-7-2051-85) before the National Labor Relations Commission (NLRC), alleging arbitrary and oppressive implementation of the new Code.
- PALEA invoked Paragraphs E and G of Article 249 and Article 253 of the Labor Code, arguing that the penal nature of the Code required sufficient publication and that certain provisions were arbitrary, oppressive, and violative of employees’ rights.
- PALEA’s prayers included:
- Suspending the implementation of the new Code of Discipline;
- Mandatory discussion of the Code’s substance with PALEA;
- Reinstatement and further hearing for dismissed employees;
- Declaration of unfair labor practice and payment of damages.
Contentions of Petitioner (PAL)
- As employer, PAL asserted its managerial prerogative to prescribe rules and regulations governing employee conduct, and maintained it had not violated any provision of the collective bargaining agreement (CBA) or the Labor Code.
- PAL contended that Article 253 of the Labor Code, cited by PALEA, pertains only to collective bargaining negotiations and was inapplicable to its unilateral implementation of the Code.
- PAL claimed to have circulated copies of the new Code to all employees and disputed PALEA’s allegations of insufficient publication.
Contentions of Respondent Union (PALEA)
- PALEA maintained that PAL’s unilateral adoption and implementation of the Code violated Articles 249(E) and (G) and Article 253 of the Labor Code.
- It challenged:
- Section 2 (Non-exclusivity), for being overly broad and penal in nature without adequate notice;
- Section 7 (Cumulative Record), for violating the prohibition against double jeopardy by allowing cumu