NAGKAKAISANG MANGGAGAWA NG SUPREME – PHILIPPINE METAL WORKERS ALLIANCE (PEMA), PETITIONER, VS. NATIONAL LABOR RELATIONS COMMISSION, SUPREME STEEL PIPE CORPORATION, MR. REGAN C. …
SORONGON, E.D., J.
The Facts
On June 5, 2009, Supreme Steel Pipe Corporation (Company for brevity) and Nagkakaisang Manggagawa ng Supreme – Philippine Metal Workers Alliance (Union for brevity) entered into a Collective Bargaining Agreement (CBA)[2] to be in full force and effect on June 1, 2008 until May 31, 2013.
During the effectivity of the CBA, or on September 2, 2010, the Union filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB), alleging violations of certain provisions of the CBA tantamount to unfair labor practice (ULP). During the proceedings before the NCMB, the parties presented and argued contrasting interpretations of the affected CBA provisions. Unable to meet halfway, the Union submitted to the NCMB the result of the strike vote balloting on January 12, 2011 indicating the desire of its members to hold a strike.
From January 24 to 26, 2011, the Union staged a strike. In an Order[3] dated January 25, 2011, the Secretary of Labor and Employment certified the labor dispute to the NLRC for compulsory arbitration.
The labor dispute pertains to alleged violations of certain CBA provisions tantamount to unfair labor practice committed by the Company against the Union, to wit:
i) ii) iii) iv) v) vi) vii) viii) ix)
For its part, the Company argued, among others, that bona fide efforts were exerted to comply with the CBA and that there was willingness on its part to discuss the proper interpretation of the affected CBA provisions. It explained that the phasing out of contractual employees is a long process and that an agreement was reached on October 13, 2010 where the Company begun hiring directly probationary employees to replace contractual and agency-hired workers as their contracts expire. As to the removal of the Zinc ash facility, it was agreed upon that for the meantime, the workers at Galvanizing II located near the Zinc ash will be transferred to Galvanizing I until the completion of the project for its dumping site outside the production building. The Company also claimed that it had already prepared guidelines for the use of the company car as an emergency vehicle which is already due for implementation. On the entitlement of the 29-day 13th month pay, it stressed that the 5-day absences, other than the bereavement leaves, must be for a valid reason. The Company refused to reimburse Rommel Gamor for the medical expenses he incurred because the illness or injuries he sustained are not work-related. The signing bonus of the workers is also denied because they were not regular employees during the effectivity of the CBA. Vicente Muñoz was not able to claim his resignation benefits because he failed to obtain a clearance nor did he give the required three-day notice prior to his resignation. Elizalde Gale and Victor Villavicencio, on the other hand, are no longer interested in claiming their resignation benefits as they were already abroad and presumably working thereat.
In its July 13, 2011 Decision, the NLRC ruled in favor of the Company and dismissed the complaint filed by herein petitioner for lack of merit. It held that under Art. 261 of the Labor Code, violations of the CBA are no longer treated as unfair labor practice but are considered as grievances which are to be resolved in accordance with the CBA. The NLRC further held that gross violation of the CBA shall mean flagrant and/or malicious refusal to comply with its economic provisions. Consequently, the NLRC ruled only on the alleged violations of the economic provisions of the CBA where it found none.
The Issues
The main issue to be resolved herein is whether or not Supreme Steel Pipe Corporation (petitioner) committed violations of the CBA resulting to unfair labor practice.
The Court’s Ruling
In resolving the questioned CBA provisions, we will be guided by the principles on interpretation of CBA provisions that “A CBA is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate. It covers the whole employment relationship and prescribes the rights and duties of the parties xxx. If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. Xxx. When a CBA may be expected to speak on a matter, but does not, its sentence imports ambiguity on that subject. The VA is not merely to rely on the cold and cryptic words on the face of the CBA but is mandated to discover the intention of the parties. Xxx. Moreover, the CBA must be construed liberally rather than narrowly and technically and the Court must place a practical and realistic construction upon it.”[4]
The Court shall individually rule on the questioned provisions of the CBA, as follows:
1. Art. II, Section 6 of the CBA
on contractual employees
Art. II, Sec. 6 of the CBA provides:
“Thirty (30) days from the signing of this CBA, contractual employees in all departments, except warehouse and packing section, shall be phased out. Those contractual employees who are presently in the workforce of the COMPANY shall no longer be allowed to work after the expiration of their contracts without prejudice to being hired as probationary employees of the COMPANY.”
The Union contends that the Company has been violating the above quoted provision by persisting to employ contractual workers in all departments up to the time of the filing of the notice of strike in 2010 where the company had about 116 contractual workers in the production area as against only 72 regular employees therein. The Union further argues that said contractual employees are re-hired by the Company repeatedly as contractual, or sometimes as probationary employees despite having rendered several months of satisfactory service, thereby worsening the violation. Thus, the Union concludes that such practice is done by the Company solely to prevent the workers from joining the Union.
The Company, on the other hand, avers that during the proceedings before the NCMB, it already explained that the phasing out contractual employees is a lengthy process and still an on-going endeavor. In fact, during the hearing before the NCMB on October 13, 2010, the parties agreed that the company will “begin hiring probationary employees to replace contractual and agency-hired as their contracts expired”. Thus, this subsequent agreement before the NCMB, which was reflected in the minutes of the proceedings during the said hearing, should be treated as akin to amending the CBA thus entitling the Company to be given reasonable time to comply with this provision.
We rule in favor of the Company’s stance. As can be gleaned from the minutes of the hearing[5] before the NCMB on October 13, 2010, the Company, through its representative, agreed to hire as probationary employees the contractual workers in its employ upon the expiration of their respective contracts. It can be said then that the proceedings conducted before the NCMB are binding between the Union and the Company and have the effect of an agreement between them. Besides, there is no violation of the CBA provision even if we follow the Union’s position that some contractual employees whose contracts expired were re-hired as probationary employees because this is exactly what the CBA provision provides. By way of exception, Art. II Sec. 6 of the CBA states that contractual employees “shall no longer be allowed to work after the expiration of their contracts without prejudice to being hired as probationary employees of the company”.
Likewise, it is understandable if the Company hires additional working hands or manpower on contractual capacity at times when immediate and unforeseen event so requires, such as when there is high demand in the Company’s products. The above CBA provision does not totally remove from the Company the exercise of management prerogative, especially if such exercise is for the purpose of meeting the demands of its clients. This fact finds support in Section 1 Article V of the CBA[6] providing:
Section 1. Management Prerogative. The UNION recognizes that the management of the business of the COMPANY and the direction of its personnel, subject to the terms of this agreement, are the sole prerogative of the COMPANY. xxx the management of the COMPANY and the direction of the work force, the right to hire, schedule, promote, transfer, demote, discipline, suspend, or discharge for any just and sufficient cause, and to prescribe working hours, the right to introduce or install new or improved time and money saving methods, facilities or devices, the right to plan, schedule, curtail or control factory operations xxx the right to designate the work to the employee or employees to perform it xxx are vested solely in the COMPANY. xxx
The Company’s reason in contracting out seasonal contractual employees is that the demand for their product is not constant, determined only by an increase in orders coming from foreign countries. Under such a circumstance, it is allowed to engage additional manpower, conditioned only on the premise that this additional workforce does not violate the employment rights of the union members.
Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice.[7]
Here, we do not see any malice nor ill motive on the part of the Company in engaging contractual employees to meet the demand of its clients vis-a-vis the increase in demand of production at a given period.
2. Art. VIII, Section 4 of the
CBA on medical care
The questioned provision on medical care specifically provides:
“Section 4. Medical Care and Cost of Medicine – The Company agrees to provide first aid medicine and first aid service and consultation free of charge to all its employees.
The company shall provide transportation to and from the hospital when the accident/illness happens during working hours. If confinement in a hospital is not necessary, the company shall reimburse the cost of the prescribed medicines after presentation of official receipts.[8]”
The Union argues that the above provision covers reimbursement of medicines as long as official receipts are presented. It cited the case of two (2) of its members, Rommel Gomon and Darius Dioquino, who were refused reimbursement of costs of medicines.
For its part, the Company posits that it is liable to reimburse medicines which were used only for illness or injuries which are work related.
Again, we concur with the position of the Company. Read in its entirety, the provision on reimbursement of medicines is incorporated in the provision requiring the Company to provide first aid medicines and first aid services and consultation in the workplace. The essence of the entire provision is the giving of immediate medical attention and assistance to any union member when they incur injury or sickness in the workplace and at the time of work, not at any time. Meaning, the medical expense has to be work related, meaning, the illness is sustained while in the performance of duty. Had the intention of the parties been to provide financial assistance on any and all medical expenses, the same should have been contained in a separate provision, not merely incorporated in the same provision for first aid medicines and services.
This conclusion is strengthened by the related provisions of the same Article, notably Sections 1 and 5, covering instances when hospitalization is required, thus:
“Section 1. The COMPANY agrees to extend financial assistance to regular employees/workers who are required to undergo hospitalization upon proper certification by the COMPANY Physician except in emergency cases which do not require physician’s certification. xxx xxx xxx[9]
xxx xxx xxx
Section 5. In case of hospital confinement, the COMPANY shall assist the employee concerned with the necessary requirements for obtaining sickness benefits from the Social Security System (SSS) in order to avoid delay of benefits. xxx xxx xxx[10]”
Under Section 1, if hospitalization is required, the Company is liable to give financial assistance, while Section 5 provides that the company will assist the worker concerned in providing the necessary requirements to avail the benefits of the Social Security System (SSS). Nowhere is it provided in the said sections that the company is liable to reimburse any expense incurred by the employee for medication. To our mind, this is an indication that the intention of the parties is to limit the liability of the Company only to the injury or illness which are work related.
3. Art. VIII, Section 7 of the CBA
on removal of Zinc Ash facility
The assailed provision reads:
“Section 7. Zinc Ash – The COMPANY shall remove Zinc Ash out from the working area and shall also provide dumping site somewhere outside production building to promote a healthy and safe working condition.[11]”
The Union posits that it is only by removing the Zinc Ash facility outside of the worker’s working area will the health and safety of the workers be assured, thus the above provision.
The Company does not dispute such position of the Union but it explains that it is already in the process of complying with this provision by providing a dumping facility. The minutes of the hearing[12] before the NCMB disclosed that the parties agreed to have the workers at Galvanizing II located near the Zinc ash be transferred to Galvanizing I pending the completion of the project for the dumping site of Zinc ash outside the production building. This provision having been already addressed by the Company, the same is no longer an issue herein.
4. Art. VIII, Section 9 of the CBA
requiring company service vehicle
Art. VIII, Section 9 states:
“Section 9. The COMPANY undertakes to provide a company service vehicle with driver during working hours.[13]”
The Union asserts that this provision obligates the Company to provide a company vehicle with driver solely devoted to worker’s use 24 hours a day because work in the premises is continuous and round the clock. The Union complains that the Company vehicle is not available at all times as the same is also used for other purposes, such as delivery and service for managerial employees.
To this the Company counters that it has already prepared the guidelines for the use of company vehicle and is already subject for implementation.
The CBA provision is clear and categorical that the company is required to provide such service vehicle with driver. It cannot in any way be interpreted otherwise, thus the Company must comply with this mandate of the CBA. But inasmuch as the Company is already in the process of implementing this provision of the CBA, this matter is equally no longer an issue between the parties.
5. Art. XI, Section 1 of the CBA
requiring payment of 29 days worth
of 13th month pay.
This provision of the CBA reads:
“Section 1. The COMPANY agrees to grant to all covered employees a 29-day equivalent thirteenth (13th) month pay computed on the employees present salary on the condition that he/she has a perfect attendance in a year. However, the ten (10) day allowable absences which shall not reduce the 13th month pay in its equivalent shall be allowed by the COMPANY provided the five (5) days of the allowable absences are bereavement leaves under Article XIII, Section 2 of this agreement, and the other 5 days absences due to causes, provided unpaid. Prolonged absences by reason of work connected illness or injuries shall likewise not be considered absences.[14]”
The Union interprets the ten 10-day absences allowed a worker to still avail of the twenty-nine (29) day pay in this manner: five (5) days bereavement and five (5) days “due to causes” without further qualification. The Company, on the other hand, submits that the “due to causes” proviso requires that there must be a valid reason for the five 5-day absences, otherwise, the worker will not be considered to have been in perfect attendance to qualify for the benefit.
It is apparent from the tenor of the provision that it is intended and designed to entice and encourage workers to work, rather than be absent, for no reason. Thus, by way of an incentive, a worker with perfect attendance is given this benefit. By way of an exception to the perfect attendance rule, the workers’ attendance will still be treated as “perfect” even if he has in fact not reported for work for ten (10) days divided into five (5) days bereavement and five (5) days for cause. Necessarily therefore, the “for cause” proviso in the provision must be read in the light of the intention of giving workers incentive if they have attained “perfect attendance”. Being absent for no valid reason will run counter to this intention and effectively negate the true intention of the contracting parties.
6. Art. XIV, Section 2 of the
CBA on signing bonus
The subject provision states:
“Section 2. Signing Bonus. Parties agreed that management shall give P1,600.00 signing bonus to each covered employee upon signing of this Agreement. An additional P2,400.00 shall also be paid to each covered employee to cover backwages, overtime pay, holiday pay and rest day pay from June 01, 2008 to March 31, 2009.
The Union claims that it has three (3) employees, namely, Rommel Gomon, John Michael dela Cruz and Pepito Veliganio who were denied this bonus. The Company, on the other hand, argues that the said benefit pertains only to “covered employees” or those who were already regular employees on the effectivity date of the CBA. The three union members are not eligible to receive this bonus because they were not regular employees at the time of effectivity of the CBA.
To our mind, the interpretation of the Company is more in accord with the intentions of the CBA. The provision is clear in indicating the said bonus is limited only to “covered employees” and not all workers. It was purposely included to limit the coverage of the same only to regular employees, not to all workers who may be of different status.
7. Art. XVII, Section 2 of the CBA on resignation benefits.
Art. XVII Section 2 reads:
“Section 2. Voluntary resignation- The COMPANY agrees to grant resignation pay equivalent to twenty one (21) days salary for every year of service based on the employee’s latest/current salary with nine (9) years and above continuous service to the COMPANY.
Under this condition, no limits to resigning employee’s are required by the COMPANY, provided, resigning employee/s shall first acquire clearance and approval of the UNION.
xxx xxx xxx.[15]“
The Union complains that it has resigning workers, namely, Jun Vicente Munoz, Elizalde Gale, and Victor Villavicencio who were denied this benefit. But the Company maintains its stand as to Jun Vicente Munoz’ non entitlement and eligibility thereof for lack of the required clearance from the Union. As to Elizalde Gale and Victor Villavicencio, the Company argues that it was informed that said employees are already out of the country, presumably working and apparently not interested in their resignation benefit.
We accord approval to the stand of the Company. Indeed, having failed to comply with the requirements set by the CBA in granting this benefit, Jun Vicente Munoz cannot be entitled to the resignation benefit alluded to in the CBA. With regard to Elizalde Gale and Victor Villavicencio, there is no proof that they have complied with the prescribed requirements because as herein earlier stated the duo is already out of the country.
Anent the other aspects of the CBA supposedly violated by the Company, this Court notes that the Union miserably failed to put forward evidence and substantiate its allegations. Thus, the same deserves scant consideration. Besides, while the Union insists that the Company has repeatedly violated the above quoted provisions of the CBA, a closer interpretation of the said provisions show otherwise.
In sum, it bears reiterating that not all violations of CBA provisions is tantamount to unfair labor practice. Unfair labor practice refers to acts that violate the workers’ right to organize. The prohibited acts are related to the workers’ right to self-organization and to the observance of a CBA. For a charge of unfair labor practice to prosper, it must be shown that the act was motivated by ill will, “bad faith, or fraud, or was oppressive to labor, or done in a manner contrary to morals, good customs, or public policy, and, of course, that social humiliation, wounded feelings or grave anxiety resulted therefrom.[16] This is not so in the instant case.
WHEREFORE, the instant petition for certiorari is DENIED. The assailed Decision dated July 13, 2011 of the National Labor Relations Commission is accordingly UPHELD.
SO ORDERED.
Reyes, Jr., A.B., Chairman, and Rosario, R.R., JJ., concur.
[1] Decision dated July 13, 2011, rollo, pp. 22-33
[2] Rollo, pp. 37-63.
[3] Ibid, pp.71-72.
[4] United Kimberly-Clark Employees Union – Philippine Transport General Workers’ Organization (UKCEU-PTGWO) vs. Kimberly – Clark Philippines, Inc. G.R. No. 162957, March 6, 2006
[5] Ibid, p. 103.
[6] Ibid, p. 42.
[7] Peckson vs. Robinsons Supermarket Corporations, G.R. No. 198534, July 3, 2013.
[8] Rollo, pp. 44-45.
[9] Ibid, p. 48.
[10] Ibid, p. 45.
[11] Ibid, p. 45.
[12] Supra at note no. 6.
[13] Rollo, p. 46.
[14] Rollo, p. 52.
[15] Rollo. p. 56.
[16] Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010.