G.R. No. 85086 September 24, 1991
Arsenio P. Buenaventura Enterprises, petitioner, vs. National Labor Relations Commission and General Mess Food Service Workers Union, respondents.

FACTS

Petitioner Arsenio P. Buenaventura Enterprises, a sole proprietorship supplying manpower services, assumed the mess services contract at the U.S. Naval Facility in Subic on April 1, 1987. The members of respondent General Mess Food Service Workers Union were previously employed by the outgoing contractor, Rizal Maintenance and Service Corporation (RMSC). Petitioner rehired 148 of RMSC’s 220 employees and hired 45 new workers. The union filed a Notice of Strike and staged a work stoppage on April 1, 1987, charging petitioner with unfair labor practice and union busting for not hiring certain union officers and members. The case was elevated for compulsory arbitration.
The union argued that its members were protected by the RP-US Bases Labor Agreement of 1968, which it interpreted as obliging the incoming contractor to absorb the employees of the outgoing contractor. The Labor Arbiter dismissed the complaint, ruling that the Agreement and relevant jurisprudence only required “priority consideration,” not automatic employment, and noted that the unhired workers failed to apply for employment with the petitioner. The NLRC reversed this decision on appeal, ordering petitioner to employ the bona fide union members who were not absorbed, provided they pass the same hiring standards.

ISSUE

Whether or not the petitioner is legally obligated to employ the bona fide members of the respondent union who were not hired after the service contract was transferred.

RULING

The Supreme Court granted the petition and reinstated the Labor Arbiter’s decision. The Court clarified the application of the RP-US Bases Labor Agreement, specifically Article I, Paragraph 6, on “Security of Employment.” This provision mandates that when activities are contracted out, the United States Armed Forces shall require the incoming contractor “to give priority consideration to affected employees for employment.”
The Court, citing Guerrero’s Transport Services, Inc. vs. Blaylock, emphasized that this clause does not provide for automatic absorption or guarantee security of tenure to employees of contractors. The right granted is merely to “priority consideration.” This right is contingent on the employees signifying their intent to be reemployed by applying with the new contractor. The Court found that the NLRC’s decision lacked a clear factual finding to rebut the Labor Arbiter’s conclusion that the unhired workers did not file applications. Without such an application, there is no duty on the part of the incoming contractor to process or hire them. Therefore, petitioner was not legally bound to employ the union members who failed to apply for work. While the law leans towards the welfare of labor, it cannot disregard the employer’s rights where the employees did not take the necessary step to invoke their right to priority consideration.