G.R. No. 200499. October 4, 2017.
San Fernando Coca-Cola Rank-and-File Union (SACORU), represented by its President, Alfredo R. Marañon, Petitioner, vs. Coca-Cola Bottlers Philippines, Inc. (CCBPI), Respondent.
FACTS
Respondent CCBPI terminated twenty-seven regular union members on the ground of redundancy, effective June 30, 2009. This resulted from a business reorganization where CCBPI ceded out its Conventional Route System and Mini Bodega System to Market Execution Partners (MEPs), a dealership system. The affected employees were placed on paid leave and offered separation packages, which most accepted under protest. Petitioner SACORU filed a Notice of Strike for unfair labor practice, alleging the reorganization was a circumvention of the CBA’s prohibition on contracting out and constituted union busting. The DOLE Secretary assumed jurisdiction, certified the dispute to the NLRC for compulsory arbitration, and enjoined any strike or acts exacerbating the situation. SACORU filed a motion to stop the dismissals, arguing they violated the certification order, but the NLRC deferred resolution, treating it as part of the main case.
CCBPI defended the reorganization as a valid management prerogative to adopt a cost-effective distribution system, rendering the employees’ positions redundant. It argued the MEP scheme was a contract of sale, not labor contracting, and that fair criteria were used, with separation benefits paid. SACORU countered that the jobs were merely outsourced, not abolished, and that the move drastically reduced union membership, undermining collective bargaining. The NLRC dismissed the complaint, upholding the redundancy dismissals. The Court of Appeals affirmed the NLRC’s decision.
ISSUE
Whether the Court of Appeals erred in affirming the NLRC’s ruling that: (1) the termination of the 27 union members was a valid redundancy program and not an unfair labor practice; and (2) the implementation of the termination did not violate the DOLE Secretary’s certification order which enjoined acts exacerbating the labor dispute.
RULING
The Supreme Court denied the petition and affirmed the CA and NLRC rulings. On the first issue, the termination was a valid exercise of management prerogative. Redundancy exists when a position is rendered superfluous by a number of factors, such as overhiring, decreased volume of business, or the phasing out of a service. The Court found CCBPI’s reorganization, aimed at improving efficiency and cost-effectiveness by adopting a simplified dealership system, was done in good faith. The fact that the distribution function continued through a different business model (a contract of sale with MEPs) does not invalidate the redundancy. The company demonstrated that the specific positions of the affected employees were no longer necessary. The payment of separation benefits and the application of fair criteria further supported the good faith implementation. The claim of unfair labor practice was not substantiated, as there was no evidence that the redundancy was a pretext for union busting.
On the second issue, the implementation of the redundancy program did not violate the DOLE Secretary’s certification order. The order enjoined acts that would “exacerbate the situation,” which primarily refers to acts that would escalate the conflict, such as a strike or retaliatory measures. The termination, being a separate management action implemented pursuant to a bona fide redundancy program initiated prior to the certification, was not covered by the injunction. The certification order did not automatically suspend all management prerogatives or render the redundancy illegal. The Court distinguished between acts that are inherently exacerbating and legitimate business decisions carried out in the normal course of operations. Therefore, the NLRC correctly deferred the motion on the termination, consolidating it with the main case for arbitration, as the validity of the redundancy was the very subject of the certified labor dispute.