G.R. No. L-87672 October 13, 1989
Wise and Co., Inc., petitioner, vs. Wise & Co., Inc. Employees Union-NATU and Honorable Bienvenido G. Laguesma, in his capacity as Voluntary Arbitrator, respondents.

FACTS

Petitioner Wise and Co., Inc. introduced a profit-sharing scheme for its managers and supervisors in April 1987. The respondent union, representing rank-and-file employees covered by the existing Collective Bargaining Agreement (CBA), requested inclusion in this scheme. Management denied the request, citing adherence to the CBA. During early negotiations for a new CBA, petitioner offered to consider including union members in the profit-sharing scheme for 1987, provided negotiations concluded by December 1987. However, negotiations deadlocked on the scope of the bargaining unit.
On March 30, 1988, petitioner distributed the 1987 profit-sharing benefit not only to managers and supervisors but also to all other rank-and-file employees who were specifically excluded from the CBA’s bargaining unit. The union filed a notice of strike, alleging discrimination and unfair labor practice, as its members were denied the benefit. The dispute was submitted to voluntary arbitration, which ruled in favor of the union, ordering the extension of the 1987 profit-sharing benefits to union members.

ISSUE

Whether the grant of profit-sharing benefits exclusively to non-union member employees constitutes unlawful discrimination against union members.

RULING

The Supreme Court granted the petition and reversed the voluntary arbitrator’s award. The legal logic centers on the principle that discrimination per se is not unlawful when the employees concerned are not similarly situated. The CBA in force explicitly defined the bargaining unit to exclude certain regular rank-and-file employees in specific departments (e.g., personnel office, accounting). The profit-sharing benefit was extended precisely to these excluded employees, who do not enjoy the comprehensive terms and conditions negotiated under the CBA.
The Court upheld management’s prerogative to regulate all aspects of employment, provided it is exercised in good faith and not to defeat employees’ rights. Here, the grant of benefits to a distinct class of employees—those outside the CBA’s coverage—was a valid exercise of that prerogative. The union members and the non-union beneficiaries were governed by different sets of rules and benefits; the former derived their rights from the CBA, which constitutes the law between the parties. The Court found no evidence of a malicious intent to discriminate against or discourage union membership, noting that some non-union employees had joined the union even after receiving the benefit. Therefore, absent a showing of bad faith or ulterior motive aimed at circumventing union rights, the selective grant was permissible.