WISE AND CO., INC., PETITIONER, VS. WISE & CO., INC. EMPLOYEES UNION-NATU AND HONORABLE BIENVENIDO G. LAGUESMA, IN HIS CAPACITY AS VOLUNTARY ARBITRATOR, RESPONDENTS.

The center of controversy in this petition is whether the grant
by management of profit sharing benefits to its non-union member employees is
discriminatory against its workers who are union members.

The facts are undisputed. On April 3, 1987 the management issued a memorandum circular introducing
a profit sharing scheme for its managers and supervisors the initial
distribution of which was to take effect March 31, 1988.

On July 3, 1987 the respondent union wrote petitioner through its
president asking for participation in this scheme. This was denied by petitioner on the ground that it had to adhere
strictly to the Collective Bargaining Agreement (CBA).

In the meantime, talks were underway for early negotiation by the
parties of the CBA which was due to expire on April 30, 1988. The negotiation thus begun earlier than the
freedom period. On November 11, 1987
petitioner wrote respondent union advising the latter that they were prepared
to consider including the employees covered by the CBA in the profit sharing
scheme beginning the year 1987 provided that the ongoing negotiations were
concluded prior to December 1987. However, the collective bargaining negotiations reached a deadlock on
the issue of the scope of the bargaining unit. Conciliation efforts to settle the dispute on 29 March 1988 were made
but no settlement was reached.

On March 30, 1988, petitioner distributed the profit sharing
benefit not only to managers and supervisors but also to all other rank and
file employees not covered by the CBA. This caused the respondent union to file a notice of strike alleging
that petitioner was guilty of unfair labor practice because the union members
were discriminated against in the grant of the profit sharing benefits. Consequently, management refused to proceed
with the CBA negotiations unless the last notice of strike was first
resolved. The union agreed to postpone
discussions on the profit sharing demand until a new CBA was concluded. After a series of conciliation conferences,
the parties agreed to settle the dispute through voluntary arbitration. After the parties submitted their position
papers, a rejoinder and reply, on March 20, 1989 the voluntary arbitrator
issued an award ordering petitioner to likewise extend the benefits of the 1987
profit sharing scheme to the members of respondent union.^[1]
Hence, this petition wherein petitioner alleged the following grounds in
support thereof-

“I

THE HONORABLE VOLUNTARY ARBITRATOR ACTED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN
HE ORDERED THE EXTENSION OF PROFIT SHARING BENEFITS TO THOSE EMPLOYEES COVERED
BY THE CBA DESPITE PATENT LACK OF FACTUAL AND LEGAL BASIS THEREFOR IN THAT –

1.  DISCRIMINATION PER SE IS NOT
UNLAWFUL ESPECIALLY WHEN THE EMPLOYEES ARE NOT SIMILARLY SITUATED.

2.  THE TERMS AND CONDITIONS STIPULATED IN THE CBA
HAVE THE FORCE AND EFFECT OF A LAW BETWEEN THE PARTIES. PRIVATE RESPONDENT, THEREFORE CANNOT DEMAND,
AS A MATTER OF RIGHT, WHAT IS NOT STIPULATED IN THE CBA.

3.  THE ACT OF THE UNION IN NEGOTIATING FOR THE
INCLUSION OF THE PROFIT SHARING BENEFIT IN THE PRESENT CBA IS AN IMPLIED
ADMISSION THAT THEY WERE NOT ENTITLED TO IT IN 1987.

II

THE HONORABLE VOLUNTARY ARBITRATOR
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN HE MADE THE CLEARLY BASELESS CONCLUSION THAT THE PETITIONER WAS MOTIVATED
BY ITS DESIRE TO DEFEAT OR OTHERWISE PREJUDICE THE BASIC RIGHTS OF ITS
EMPLOYEES.”^[2]

The petition is impressed with merit.

Under the CBA between the parties that was in force and effect
from May 1, 1985 to April 30, 1988 it was agreed that the “bargaining
unit” covered by the CBA “consists of all regular or permanent
employees, below the rank of assistant supervisor.”^[3]
Also expressly excluded from the term “appropriate bargaining unit”
are all regular rank and file employees in the office of the president,
vice-president, and the other offices of the company – personnel office,
security office, corporate affairs office, accounting and treasury department.^[4]

It is to this class of employees who were excluded in the
“bargaining unit” and who do not derive benefits from the CBA that
the profit sharing privilege was extended by petitioner.

There can be no discrimination committed by petitioner thereby as
the situation of the union employees are different and distinct from the
non-union employees.^[5]
Indeed, discrimination per se is not unlawful. There can be no discrimination where the
employees concerned are not similarly situated.

Respondent union can not claim that there is grave abuse of
discretion by the petitioner in extending the benefits of profit sharing to the
non-union employees as they are two (2) groups not similarly situated. These non-union employees are not covered by
the CBA. They do not derive and enjoy
the benefits under the CBA.

The contention of the respondent union that the grant to the
non-union employees of the profit sharing benefits was made at a time when
there was a deadlock in the CBA negotiation so that apparently the motive
thereby was to discourage such non-union employees from joining the union is
not borne by the record. Petitioner
denies this accusation and instead points out that inspite of this benefit
extended to them, some non-union workers actually joined the respondent union
thereafter.

Respondent union also decries that no less than the president of
the petitioner agreed to include its members in the coverage of the 1987 profit
sharing benefit provided that they would agree to an earlier negotiation for
the renewal of the CBA which expired in 1988. Be this as it may, since there was actually a deadlock in the
negotiation and it was not resolved and consummated on the period expected,
private respondent can not now claim that petitioner has a duty to extend the
profit sharing benefit to the union members.

The Court holds that it is the prerogative of management to
regulate, according to its discretion and judgment, all aspects of
employment. This flows from the established
rule that labor law does not authorize the substitution of the judgment of the
employer in the conduct of its business.^[6]
Such management prerogative may be availed of without fear of any liability so
long as it is exercised in good faith for the advancement of the employers’
interest and not for the purpose of defeating or circumventing the rights of
employees under special laws or valid agreement and are not exercised in a
malicious, harsh, oppressive, vindictive or wanton manner or out of malice or
spite.^[7]

The grant by petitioner of profit sharing benefits to the
employees outside the “bargaining unit” falls under the ambit of its
managerial prerogative. It appears to
have been done in good faith and without ulterior motive. More so when as in this case there is a
clause in the CBA where the employees are classified into those who are members
of the union and those who are not. In
the case of the union members, they derive their benefits from the terms and
conditions of the CBA contract which constitute the law between the contracting
parties.^[8]
Both the employer and the union members are bound by such agreement.

However, the court serves notice that it will not hesitate to
strike down any act of the employer that tends to be discriminatory against
union members. It is only because of
the peculiar circumstances of this case showing there is no such intention that
this court ruled otherwise.

WHEREFORE, the petition is GRANTED and the award of
respondent Voluntary Arbitrator dated March 20,1989 is hereby REVERSED AND SET
ASIDE being null and void, without pronouncement as to costs.

SO ORDERED.

Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur .

^[1]
Pages 32-34, Rollo.

^[2]
Pages 11-12, Rollo.

^[3]
Article 1, Section 1, CBA; page 4, Rollo.

^[4]
Pages 4-5, Rollo.

^[5]
Caltex Phils. vs. Phil. Labor Organization, Caltex Chapter, 92 Phil.
1014, 1018 (1953).

^[6]
NLU vs. Insular-Yebana Tobacco Corporation, 2 SCRA 924, 931 (1961);
Republic Savings Bank vs. CIR, 21 SCRA 226, 235-236 (1967).

^[7]
PRC vs. Garcia, 18 SCRA 107, 110 (1966); and LVN vs. LVN
Employees Association 35 SCRA 147, 156 (1970).

^[8]
Mactan Workers Union vs. Aboitiz 45 SCRA 577, 581-582 (1977).