Case Summary (G.R. No. 116013)
Petitioner’s Factual Background and Grievances
In July 1990 SMC closed certain plants and declared 55 positions redundant: 17 in BLD, 17 in AOC, and 18 in Magnolia‑MBS. The union filed multiple grievances seeking redeployment of the retrenched employees. During the grievance process most employees were redeployed or accepted early retirement; by the time the dispute reached the third level (Step 3) only 17 employees remained. At an October 26, 1990 meeting SMC warned that if those 17 could not be redeployed by October 30 their services would be terminated effective November 2; the meeting adjourned after Mr. Borbon declared there was nothing more to discuss.
Grievance and Arbitration Procedure Under the 1990 CBA
The parties’ 1990 Collective Bargaining Agreement (CBA) provided a three-step grievance procedure (Section 5): Step 1—oral submission to immediate superior and written escalation to Department Manager within 20 working days, who must decide within 10 working days; Step 2—appeal to Plant Manager/Director within 20 working days who may hold grievance meetings and must decide within 10 working days; Step 3—appeal to the Conciliation Board within 15 working days, with the Board having 15 working days to decide. Section 6 provided for a Conciliation Board per Business Unit composed of up to five representatives each from Company and Union. Section 8 allowed submission to arbitration if the aggrieved party served notice within 15 working days after the Conciliation Board’s decision.
Union’s Strike Notice and Employer’s Procedural Moves
On November 7, 1990 the union filed a notice of strike with the National Conciliation and Mediation Board (NCMB) alleging bargaining deadlock, union‑busting, gross CBA violations (including non‑compliance with grievance procedure), failure to provide a list of vacant positions as required by a side agreement, and defiance of a voluntary arbitration award. SMC moved to dismiss the notice of strike, but the NCMB did not act on that motion. On December 21, 1990 SMC filed a complaint with the NLRC seeking dismissal of the strike notice, an order compelling the union to pursue the CBA grievance and arbitration remedies, and recovery of litigation expenses.
NLRC Resolution and Supreme Court Intervention
The NLRC, Second Division, dismissed SMC’s complaint for lack of merit in a minute resolution dated April 16, 1991. SMC elevated the matter to the Supreme Court by a petition for certiorari under Rule 65, contending the NLRC had a positive legal duty to compel arbitration and to enjoin a strike that violated a no‑strike clause and the CBA’s grievance machinery. The Supreme Court issued a temporary restraining order on June 3, 1991 to preserve the status quo pending resolution of the petition.
Applicable Law and Legal Standard
Because the decision date is after 1990, the legal framework includes the 1987 Constitution as the supreme law (as noted by the case administrative instruction) together with the Rules and Regulations Implementing Book V of the Labor Code. The decision relied on Rule XXII, Section 1, which provides that strikes or lockouts are permitted in cases of bargaining deadlocks and unfair labor practices, but that violations of collective bargaining agreements—except for flagrant and/or malicious refusal to comply with their economic provisions—shall not be considered unfair labor practices and are not strikeable; disputes submitted to voluntary or compulsory arbitration are likewise non‑strikeable.
Court’s Analysis on the Alleged Bargaining Deadlock
The Court found no genuine collective bargaining deadlock. The dispute had been brought to the third level of the CBA grievance machinery where a Conciliation Board (with company and union representatives) was specifically charged with resolving such conflicts. The union declared a deadlock instead of allowing the Conciliation Board to perform its function. Because the matter was at a stage designed to resolve disputes—and because issues brought to arbitration or within grievance machinery are non‑strikeable—the Court held the union’s claim of bargaining deadlock was legally untenable.
Court’s Analysis on Alleged CBA Violations and Union Conduct
The Court concluded that the union violated the mandatory provisions of the CBA by abandoning the grievance proceedings and refusing to pursue available remedies. The abolition of departments
...continue readingCase Syllabus (G.R. No. 116013)
Case Caption, Citation, and Composition of the Court
- Full citation: 363 Phil. 377, Third Division, G.R. No. 99266, March 02, 1999.
- Parties: San Miguel Corporation (petitioner) versus National Labor Relations Commission, Second Division, and San Miguel Corporation Employees Union (SMCEU) - PTGWO (respondents).
- Decision authored by Justice Purisima.
- Concurrence noted: Romero (Chairman) and Gonzaga-Reyes, JJ., concur.
- Administrative notes: Justice Vitug was abroad on official business; Justice Panganiban was on leave.
Relief Sought and Procedural Vehicle
- Petition filed: Petition for Certiorari under Rule 65 of the Revised Rules of Court.
- Reliefs sought in the NLRC complaint (and underlying petition): (1) dismissal of the notice of strike; (2) an order compelling the respondent union to submit to the grievance and arbitration provisions of the parties' Collective Bargaining Agreement (CBA); (3) recovery of expenses of litigation; and in the petition to the Supreme Court, prayer for temporary restraining order.
- Interim relief: On June 3, 1991, the Court issued a Resolution granting petitioner’s prayer for issuance of a Temporary Restraining Order to preserve the status quo.
Antecedent Facts — Retrenchment and Redeployment
- Date and corporate action: In July 1990, San Miguel Corporation, alleging the need to streamline operations due to financial losses, shut down some plants and declared 55 positions redundant.
- Distribution of declared redundant positions: 17 employees in the Business Logistics Division (BLD); 17 in the Ayala Operations Center (AOC); 18 in the Magnolia-Manila Buying Station (Magnolia-MBS).
- Union response: The San Miguel Corporation Employees Union filed several grievance cases seeking redeployment of the retrenched employees to other divisions.
- Grievance progression and attrition: During grievance proceedings most employees were redeployed and others accepted early retirement, leaving only 17 employees remaining when the parties reached the third level (Step 3) of the grievance procedure.
Events Leading to the Notice of Strike
- October 26, 1990 meeting: Petitioner informed the union that, if by October 30, 1990 the remaining 17 employees could not be redeployed, their services would be terminated on November 2, 1990.
- Status of meeting: The meeting adjourned when Mr. Daniel S. L. Borbon II, a union representative, declared there was nothing more to discuss due to a declared deadlock.
- November 7, 1990 action by the union: The private respondent union filed a notice of strike with the National Conciliation and Mediation Board (NCMB) of the DOLE.
Grounds Asserted in the Notice of Strike
- Grounds explicitly asserted in the union’s notice of strike (as pleaded in the record):
- a) bargaining deadlock;
- b) union busting;
- c) gross violation of the Collective Bargaining Agreement, specifically non-compliance with the grievance procedure;
- d) failure to provide the union with a list of vacant positions pursuant to a side agreement appended to the 1990 CBA;
- e) defiance of a voluntary arbitration award.
Petitioner’s Procedural Efforts and NLRC Proceedings
- Petitioner’s motion before NCMB: Petitioner moved to dismiss the notice of strike; the NCMB failed to act on that motion.
- December 21, 1990 filing: Petitioner filed a complaint with the National Labor Relations Commission (NLRC) seeking dismissal of the notice of strike, compelling the union to submit to the grievance and arbitration procedures, and recovery of litigation expenses.
- NLRC resolution: On April 16, 1991, the NLRC Second Division issued a minute resolution dismissing the complaint for lack of merit, after considering allegations, evidence, the union’s Answer, and petitioner’s memorandum in support of injunction.
Collective Bargaining Agreement Provisions Governing Grievance and Arbitration (as quoted in the record)
- Section 5 — Processing of Grievance:
- Step 1: Oral presentation to immediate superior; if unresolved, written grievance to Department Manager within 20 working days; Department Manager to decide within 10 working days; copy to Plant Personnel Officer.
- Step 2: Appeal in writing to Plant Manager/Director within 20 working days of Step 1 decision; Plant Manager/Director and Plant Personnel Officer may hold grievance meetings; grievance meetings in every plant/office scheduled at least twice a month; Plant Manager to issue written decision within 10 working days after receipt/submission; copy to Employee Relations Directorate.
- Step 3: Appeal to the Conciliation Board within 15 working days from receipt of Plant Manager decision; Conciliation Board meetings scheduled at least once a month; Conciliation Board to decide within 15 working days from submission.
- Section 6 — Conciliation Board:
- There shall be a Conciliation Board per Business Unit or Division.
- Composition: not more than five representatives each from the Company and the Union; parties may be assisted by legal counsels.
- Board member nominations submitted annually not later than January; members act for one year until removed.
- Section 8 — Submission to Arbitration:
- If dissatisfied with Conciliation Board decision, employee or union must serve notice of intention