GR 171664; (March, 2013) (Digest)
G.R. No. 171664 ; March 6, 2013
BANKARD, INC., Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION-FIRST DIVISION, PAULO BUENCONSEJO, BANKARD EMPLOYEES UNION-AWATU, Respondents.
FACTS
Respondent Bankard Employees Union-AWATU filed a Notice of Strike against petitioner Bankard, Inc., alleging unfair labor practices (ULP) related to job contractualization, outsourcing, a manpower rationalization program (MRP), and discrimination. The Secretary of Labor certified the dispute to the NLRC for compulsory arbitration. Despite certification orders prohibiting a strike, the Union went on strike. The parties later agreed to submit two issues: whether job contractualization constituted ULP, and whether Bankard bargained in bad faith. Bankard defended the MRP and subsequent contracting-out as a legitimate management prerogative to enhance efficiency, offering voluntary resignation with separation pay. The Union contended these actions were a scheme to reduce regular unionized employees and replace them with non-union contractual workers, thereby weakening the Union.
ISSUE
Whether Bankard’s implementation of a manpower rationalization program and subsequent contracting-out of services constituted unfair labor practice under Article 248(c) of the Labor Code.
RULING
Yes, the Supreme Court affirmed the findings of the NLRC and the Court of Appeals that Bankard committed unfair labor practice. The legal logic centers on the interpretation of Article 248(c), which prohibits an employer from contracting out services being performed by union members when such action interferes with, restrains, or coerces employees in their right to self-organization. While management has the prerogative to adopt policies for efficiency, this right is not absolute and must be exercised in good faith and without intent to circumvent the employees’ right to collective bargaining and security of tenure.
The Court found that Bankard’s MRP, which induced the resignation of a majority of employees in certain divisions, followed immediately by contracting the same functions to an independent agency, had the clear effect of reducing the number of regular union members. This scheme effectively prevented the growth of the Union and restrained the employees’ right to self-organization. The timing and consequence of the action demonstrated that the contractualization was not a mere exercise of business judgment but an act calculated to interfere with union rights. The act of replacing union members with contractual workers who are ineligible for union membership constitutes a violation under Article 248(c). The Court upheld the factual findings of the NLRC, which are accorded respect and finality when supported by substantial evidence, as in this case.