G.R. No. 107302 & 107306 and G.R. Nos. 108559-60 June 10, 1997
Industrial Timber Corporation, petitioner, vs. National Labor Relations Commission (5th Division), ITC Butuan Logs Labor Union-WATU, Oscar Monteroso and Dodong Mordeno, respondents.
FACTS
Industrial Timber Corporation (ITC) operated two plants in a single compound: the Butuan Logs Plant (veneer processing) and the Stanply Plant (veneer and plywood). Each plant had a separate bargaining unit and collective bargaining agreement (CBA). In November 1989, ITC notified its employees and the DOLE of the permanent closure of the Butuan Logs Plant effective December 10, 1989, citing impending heavy financial losses due to high production costs, erratic raw material supply, and depressed market conditions. The ITC Butuan Logs Workers Union-WATU objected. Conciliation proceedings failed. ITC notified the Union of available separation pay and CBA benefits; 63 employees availed of these. The Union filed a notice of strike, and after a failed conciliation and a strike vote (62 out of 173 members in favor), operations ceased as scheduled on December 10, 1989. On January 14, 1990, the Union staged a strike at the common gate of the closed Butuan Logs Plant and the operational Stanply Plant. The Union filed a complaint for illegal shutdown. ITC filed a complaint for illegal strike. The Labor Arbiter consolidated the cases, dismissing the illegal shutdown complaint but ordering ITC to pay separation pay and CBA benefits to employees who did not opt to receive them, and declaring the strike illegal. The NLRC reversed the Labor Arbiter, declaring the shutdown illegal and the strike valid, and ordering ITC to pay backwages, salary differentials, separation pay, CBA benefits, and attorney’s fees. ITC’s motion for reconsideration was denied.
ISSUE
1. Whether the closure of the Butuan Logs Plant was illegal.
2. Whether the strike staged by the Union was illegal.
3. Whether money claims should be awarded to the Union members.
RULING
1. The closure was NOT illegal. The Supreme Court found that ITC’s decision to close the Butuan Logs Plant was a legitimate exercise of management prerogative due to serious business losses. The Court upheld the certification from an independent CPA detailing manufacturing costs exceeding selling prices, resulting in substantial daily losses. The closure was due to causes beyond ITC’s control and not motivated by union animosity, as the Stanply Plant, with its own separate union, continued operations.
2. The strike WAS illegal. The Supreme Court found that the Union failed to obtain the required majority vote in the strike ballot (62 out of 173 members is less than the majority needed). Furthermore, the strike was staged at the common gate, necessarily obstructing the operations of the separate and distinct Stanply Plant, which was not a party to the labor dispute. This made the strike illegal from its inception.
3. The monetary awards granted by the NLRC were SET ASIDE. The Supreme Court reinstated the Labor Arbiter’s decision, which ordered ITC to pay separation pay and CBA benefits only to those employees of the Butuan Logs Plant who did not opt to receive them initially. The case was remanded to the NLRC to determine which employees had executed quitclaims and which remaining employees were entitled to these benefits. The claims for backwages and salary differentials under R.A. 6727 were dismissed.
