Case Digest: General Santos Coca-Cola Plant Free Workers Union – TUPAS vs Coca-Cola Bottlers Philippines., Inc., CA and NLRC, G.R. No. 178647

 

General Santos Coca-Cola Plant Free Workers Union – TUPAS vs Coca-Cola Bottlers Philippines., Inc., CA and NLRC, G.R. No. 178647, February 13, 2009

Subject: Labor Law 

FACTS

In the late 1990s, CCBPI experienced a significant decline in profitability due to the Asian economic crisis, hence, it implemented three (3) waves of an Early Retirement Program. An inter-office memorandum was sent to all of CCBPI’s Plant Human Resources Managers/Personnel Officers, including those of the CCBPI General Santos Plant (CCBPI Gen San) mandating them to put on hold "all requests for hiring to fill in vacancies in both regular and temporary positions in [the] Head Office and in the Plants." Because several employees availed of the early retirement program, vacancies were created in some departments, including the production department of CCBPI Gen San, where members of petitioner Union worked. This prompted petitioner to negotiate with the Labor Management Committee for filling up the vacancies with permanent employees. 

Faced with the "freeze hiring" directive, CCBPI Gen San engaged the services of JLBP Services Corporation (JLBP), a company in the business of providing labor and manpower services, including janitorial services, messengers, and office workers to various private and government offices.

In 2002, petitioner filed with the NCMB, a Notice of Strike on the ground of alleged unfair labor practice committed by CCBPI Gen San for contracting-out services regularly performed by union members ("union busting"). After conciliation and mediation proceedings before the NCMB, the parties failed to come to an amicable settlement. Hence, CCBPI filed a Petition for Assumption of Jurisdiction with the Office of the Secretary of Labor and Employment. The Secretary of Labor issued an Order enjoining the threatened strike and certifying the dispute to the NLRC for compulsory arbitration.

In 2003, the NLRC ruled that CCBPI was not guilty of unfair labor practice for contracting out jobs to JLBP. The NLRC anchored its ruling on the validity of the "Going-to-the-Market" (GTM) system implemented by the company, which called for restructuring its selling and distribution system, leading to the closure of certain sales offices and the elimination of conventional sales routes. CA affirmed NLRC’s decision that CCBPI did not commit unfair labor practice. Hence, this petition for review.

ISSUE

Whether or not JLBP is an independent contractor, whether or not CCBPI’s contracting-out of jobs to JLBP amounted to unfair labor practice, and whether or not such action was a valid exercise of management prerogative, call for a re-examination of evidence, which is not within the ambit of this Court’s jurisdiction.

RULING

Yes, JLBP is an independent Contractor. No, CCBPI’s contracting out of jobs to JLBP does not amount to unfair labor practice. Yes, it is a valid exercise of management prerogative.

Under the law, it shall be unlawful for an employer to commit any of the following unfair labor practices: (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to self-organization.

In this case, SC held that 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. Without that element, the acts, even if unfair, are not unfair labor practices. It is true that the NLRC erroneously concluded that the contracting- out of jobs in CCBPI Gen San was due to the GTM system, which actually affected CCBPI’s sales and marketing departments, and had nothing to do with petitioner’s complaint. However, this does not diminish the NLRC’s finding that JLBP was a legitimate, independent contractor and that CCBPI Gen San engaged the services of JLBP to meet business exigencies created by the freeze-hiring directive of the CCBPI Head Office. CCBPI did not engage in labor-only contracting and, therefore, was not guilty of unfair labor practice. SC held that the company’s action to contract-out the services and functions performed by Union members did not constitute unfair labor practice as this was not directed at the members’ right to self-organization. Both the NLRC and the CA found that petitioner was unable to prove its charge of unfair labor practice. It was the Union that had the burden of adducing substantial evidence to support its allegations of unfair labor practice, which burden it failed to discharge.