and MSGR. MARIANO
T. BALBAGO,
Petitioners, Present:
QUISUMBING, J.,
Chairperson,
-
versus - CARPIO,
CARPIO-MORALES,
TINGA, and
VELASCO, JR., JJ.
EMPLOYEES
(CCSEU),
Respondent.
x------------------------------------------------------------------------------------x
Tinga, J.:
The main issue for resolution hinges
on the validity of a stipulation in a Collective Bargaining Agreement (CBA)
that allows management to retire an employee in its employ for a predetermined
lengthy period but who has not yet reached the minimum compulsory retirement
age provided in the Labor Code. Jurisprudence has answered the question in the
affirmative a number of times and our duty calls for the application of the
principle of stare decisis. As a
consequence, we grant the petition and reverse the Court of Appeals.
Before us
is a petition for review on certiorari under Rule 45 of the Rules of Court,
assailing the Decision[1]
dated 20 August 2001 of the Court of Appeals in CA-G.R. SP No. 50851, which
reversed the Resolutions dated 31 January 1997,[2]
and 30 April 1997[3] of
the National Labor Relations Commission (NLRC), Third Division in NLRC NCR CC
No. L-000028-93 (NLRC RAB-IV-7-6827-94-R), as well as the Resolution[4]
dated
The
antecedent facts follow:
On
ARTICLE IX
DURATION OF AGREEMENT
This Collective Bargaining Agreement shall become effective and binding
upon the parties from
If no new agreement is reached by the parties at the expiration of this agreement, all the provisions of this Agreement shall remain full force and in effect, up to the time a new Agreement shall be executed.[5]
Msgr. Mariano
Balbago (Balbago) was appointed School Director in April 1987. From this time, the
It was only in
On
An employee may be retired, either upon application by the employee himself or by the decision of the Director of the School, upon reaching the age of sixty (60) or after having rendered at
least twenty (20) years of service to the School the last three (3) years of which must be continuous.[7]
Three (3) days later, the
On
On
“WHEREFORE, PREMISES CONSIDERED, this Office hereby certifies the labor
dispute at the
“Accordingly, all striking teachers and employees are directed to return to work within 24 hours from receipt of this Order and the School Administrator to accept all returning employees under the same terms and conditions prevailing prior to the strike.”
“Furthermore, the effects of the termination of Ms. Rosalinda Llagas and Paz A. Javier are hereby suspended. In line with this Order, the School Administration is ordered to reinstate them to their former positions without loss of seniority rights and privileges pending determination of the validity of their dismissal.”
“Both parties are further directed to cease and desist from committing any acts that might aggravate the situation.”
“SO ORDERED.”[8]
On
On
On
Three (3)
issues were passed upon by the NLRC, namely: (1) whether the retirement of
Llagas and Javier is legal; (2) whether the School is guilty of unfair labor
practice; and (3) whether the strike is legal.
The NLRC
ruled that the retirement of Llagas and Javier is legal as the School was
merely exercising an option given to it under the CBA.[10] The NLRC dismissed the unfair labor practice
charge against the School for insufficiency of evidence. Furthermore, it was found that the strike
declared by the
The
Hence, on
On
Pursuant to
the ruling of this Court in St. Martin
Funeral Homes v. NLRC,[12]
the case was referred to the Court of Appeals and re-docketed as CA-G.R. SP No.
50851.
On 20
August 2001, the Court of Appeals rendered a decision giving due course and
granting the petition to annul and set aside the 31 January 1997 and 30 April
1997 Resolutions of the NLRC; while dismissing the petition for contempt for
lack of merit. The decretal portion of
the decision reads:
WHEREFORE, premises considered, the petition to annul and set aside the P10,000.00) and five thousand (P5,000.00),
respectively; 3) to pay Paz Javier, or her heirs: a) unpaid salaries, inclusive
of allowances and other benefits, including death benefits, or their monetary
equivalent from the time her compensation was withheld from her up to the time
of her death; b) separation pay equivalent to one (1) month’s salary for every
year of service; and c) moral and exemplary damages in the amount of ten
thousand pesos (P10,000.00) and five thousand pesos (P5,000.00),
respectively.
Private respondents are also ordered to pay petitioner union attorney’s fees equivalent to five percent (5%) of the total judgment award.
The petition for contempt, however, is DISMISSED for lack of merit.
No pronouncement as to costs.
SO ORDERED.[13]
In
reversing the decision of the NLRC, the Court of Appeals construed the
retirement of Llagas and Javier as an act amounting to unfair labor practice
when viewed against the backdrop of the relevant circumstances obtaining in the
case. The appellate court pointed out,
thus:
The two happened to be the most vocal, dynamic and influential of all union officers and members and they held considerable suasion over the other employees. Rosalinda Llagas objected to the signing of the prepared form distributed by the school, as a consequence of which, no one accomplished the form, and opposed the formation of the high school faculty club as the teachers already had sufficient representation through the union. Paz Javier, on the other hand, demanded that she be given the floor during the faculty club organizational meeting and went on to win the presidency of the faculty club, conclusively showing that she enjoyed the support of the high school teachers. They were therefore a new and different breed of union leaders – assertive, militant and independent – the exact opposite of former union president Victor Javier who seemed to be passive, cooperative and pacific. The school saw the two as threats which it could not control, and faced with a very uncomfortable situation of having to contend with an aggressive union which just dominated the high school faculty club (except for Joel Javeniar, all of the faculty club’s officers were union members; Rollo, p. 418), the school decided to “nip in the bud” the reactivated union by retiring its most prominent leaders.
x x x x
It is not difficult to see the anti-union bias of the school. One of the first acts of private respondent Msgr. Balbago immediately after his assumption of office as school director was to ask for a moratorium on all union activities. With the union in inactive status, the school felt secure and comfortable but when the union reactivated, the school became apprehensive and reacted by retiring the union’s two topmost officers by invoking the provisions of the CBA. When the union furnished the school, through counsel, a copy of a proposed CBA on 3 November 1993, the school in a cavalier fashion ignored it on the pretext that the union no longer enjoyed the majority status among the employees x x x[14]
The appellate
court concluded that the retirement of the two (2) union officers was clearly
to bust the reactivated union.
Having established that the School
committed unfair labor practice, the Court of Appeals declared that the
“no-strike, no-lockout clause” in the CBA was not violated when the union
members staged a strike from 8 to
We studied carefully the available records and found that the existence of force during the strike was certainly not pervasive and widespread, or consistently and deliberately resorted to as a matter of policy, so as to stamp the strike with illegality, or to cause the loss of employment of the guilty party x x x [16]
The motion for reconsideration
subsequently filed by the School was denied in a Resolution dated 6 December
2001, save in case of some union officers where the appellate court modified
its ruling granting them separation pay instead of reinstatement because of
their retirement or death.[17]
Thereafter, petitioners filed this
petition for review on certiorari raising three main issues, summarized as: (1)
whether the School’s decision to retire Llagas and Javier constitutes unfair
labor practice; (2) whether the strike was legal; and (3) whether some union
officers ordered dismissed are entitled to backwages.[18]
The School
avers that the retirement of Llagas and Javier was clearly in accordance with a
specific right granted under the CBA.
The School justifies its actions by invoking our rulings in Pantranco North Express, Inc. v. NLRC[19]
and Bulletin Publishing Corporation v.
Sanchez[20]
that no unfair labor practice is committed by management if the retirement was
made in accord with management prerogative or in case of voluntary retirement,
upon approval of management.
The
The NLRC, however, gave another
justification to sustain the validity of the two union officers’ forcible
retirement, viz:
The retirement of Rosalinda Llagas has become inevitable because, being a managerial employee by reason of her position as Dean of Student Affairs, she accepted the Union presidency. She lost the trust and confidence on her by the SCHOOL as she occupied a managerial position as Dean of Student Affairs. . . Being also the union president, she has allowed her loyalties to be divided between the administration and the union.
As to Paz Javier, her retirement was decided upon after an evaluation shows that she was not performing well as her students were complaining about her brusque attitude and bad language, aside from being habitually absent and late. [23]
At the outset, only questions of law
are entertained by this Court through a petition for review on certiorari. There are, however, well-recognized
exceptions such as in this case when the factual findings of the NLRC and the
Court of Appeals are contradictory.[24] A re-evaluation of the records of this case
is necessary for its proper resolution.
The key issue remains whether the
forced retirement of Llagas and Javier was a valid exercise of management
prerogative. Undoubtedly, the retirement of the two (2) union officers
triggered the declaration of strike by the
We are impelled to reverse the Court
of Appeals and affirm the validity of the termination of employment of Llagas
and Javier, arising as it did from a management prerogative granted by the
mutually-negotiated CBA between the School and the
Pursuant to
the existing CBA,[25]
the School has the option to retire an employee upon reaching the age limit of
sixty (60) or after having rendered at least twenty (20) years of service to
the School, the last three (3) years of which must be continuous. Retirement is
a different specie of termination of employment from dismissal for just or
authorized causes under Articles 282 and 283 of the Labor Code. While in all
three cases, the employee to be terminated may be unwilling to part from
service, there are eminently higher standards to be met by the employer validly
exercising the prerogative to dismiss for just or authorized causes. In those
two instances, it is indispensable that the employer establish the existence of
just or authorized causes for dismissal as spelled out in the Labor Code. Retirement,
on the other hand, is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee whereby the latter after
reaching a certain age agrees and/or consents to sever his employment with the
former.[26]
Article 287
of the Labor Code, as amended, governs retirement of employees, stating:
ART. 287. Retirement. –
Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employee’s retirement benefits under any collective bargaining agreement and other agreements shall not be less than those provided herein.
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year.
The CBA in
the case at bar established 60 as the compulsory retirement age. However, it is not alleged that either Javier
or Llagas had reached the compulsory retirement age of 60 years, but instead
that they had rendered at least 20 years of service in the School, the last
three (3) years continuous. Clearly, the CBA provision allows the employee to
be retired by the School even before reaching the age of 60, provided that
he/she had rendered 20 years of service. Would such a stipulation be valid?
Jurisprudence affirms the position of the School.
Pantranco North Express, Inc. v. NLRC, cited by
petitioners, finds direct application in this case. The CBA involved in Pantranco allowed the employee to be
compulsorily retired upon reaching the age of 60 “or upon completing [25] years
of service to [Pantranco].” On the basis of the CBA, private respondent was
compulsorily retired by Pantranco at the age of 52, after 25 years of service.
Interpreting Article 287, the Court ruled that the Labor Code permitted
employers and employees to fix the applicable retirement age at below 60 years
of age. Moreover, the Court also held
that there was no illegal dismissal since it was the CBA itself that
incorporated the agreement reached between the employer and the bargaining
agent with respect to the terms and conditions of employment; hence, when the
private respondent ratified the CBA with his union, he concurrently agreed to
conform to and abide by its provisions. Thus, the Court asserted, “[p]roviding
in a CBA for compulsory retirement of employees after twenty-five (25) years of
service is legal and enforceable so long as the parties agree to be governed by
such CBA.”[27]
A similar
set of facts informed our decision in Progressive
Development Corporation v. NLRC.[28] The CBA therein stipulated that an employee
“with [20] years of service, regardless of age, may be retired at his option or
at the option of the company.” The
stipulation was used by management to compulsorily retire two employees with
more than 20 years of service, at the ages of 45 and 38. The Court affirmed the
validity of the stipulation on retirement as consistent with Article 287 of the
Labor Code.
Philippine Airlines, Inc. v. Airline Pilots
Association of the Phils.[29] further
bolsters the School’s position. At contention therein was a provision of the
PAL-ALPAP Retirement Plan, the Plan having subsequently been misquoted in the
CBA mutually negotiated by the parties. The Plan authorized PAL to exercise the
option of retirement over pilots who had chosen not to retire after completing
20 years of service or logging over 20,000 hours for PAL. After PAL exercised
such option over a pilot, ALPAP charged PAL with illegal dismissal and
union-busting. While the Secretary of Labor upheld the unilateral retirement,
it nonetheless ruled that PAL should first consult with the pilot to be retired
before it could exercise such option. The Court struck down that proviso,
ruling that “the requirement to consult the pilots prior to their retirement
defeats the exercise by management of its option to retire the said employees,
[giving] the pilot concerned an undue prerogative to assail the decision of
management.”
By their
acceptance of the CBA, the
It should
not be taken to mean that retirement provisions agreed upon in the CBA are
absolutely beyond the ambit of judicial review and nullification. A CBA, as a
labor contract, is not merely contractual in nature but impressed with public
interest. If the retirement provisions in the CBA run contrary to law, public
morals, or public policy, such provisions may very well be voided. Certainly, a
CBA provision or employment contract that would allow management to subvert
security of tenure and allow it to unilaterally “retire” employees after one
month of service cannot be upheld. Neither will the Court sustain a retirement
clause that entitles the retiring employee to benefits less than what is
guaranteed under Article 287 of the Labor Code, pursuant to the provision’s
express proviso thereto in the provision.
Yet the CBA
in the case at bar contains no such infirmities which must be stricken down.
There is no essential difference between the CBA provision in this case and
those we affirmed in Pantranco and Progressive. Twenty years is a more than ideal length of
service an employee can render to one employer. Under ordinary contemplation, a
CBA provision entitling an employee to retire after 20 years of service and
accordingly collect retirement benefits is “reward for services rendered since
it enables an employee to reap the fruits of his labor — particularly
retirement benefits, whether lump-sum or otherwise — at an earlier age, when
said employee, in presumably better physical and mental condition, can enjoy
them better and longer.”[30]
We affirm
the continued validity of Pantranco and
its kindred cases, and thus reiterate that under Article 287 of the Labor Code,
a CBA may validly accord management the prerogative to optionally retire an
employee under the terms and conditions mutually agreed upon by management and
the bargaining union, even if such agreement allows for retirement at an age
lower than the optional retirement age or the compulsory retirement age. The
Court of Appeals gravely erred in refusing to consider this case from the
perspective of Pantranco, or from the
settled doctrine enunciated therein.
What the
Court of Appeals did instead was to favorably consider the claim of the
case of NLRB v. Ace Comb, Co.,[31]
which in turn was taken from a popular local labor law textbook. The citation
stated that “[f]or the purpose of determining whether or not a discharge is
discriminatory, it is necessary that the underlying reason for the discharge be
established. The fact that a lawful cause for discharge is available is not a
defense where the employee is actually discharged because of his union
activities.”[32]
Reliance on
NLRB v. Ace Comb, Co. was grossly inapropos. The case did not involve an
employee sought to be retired, but one who cited for termination from
employment for cause, particularly for violating Section 8(a)(3) of the
National Labor Relations Act, or for insubordination. Moreover, the United
States Court of Appeals Eighth Circuit, which decided the case, ultimately
concluded that “here the evidence abounds that there was a justifiable cause for [the employee’s]
discharge,”[33] his union
activities notwithstanding. Certainly,
the
Nonetheless, the premise warrants considering whether management may be precluded from retiring an employee whom it is entitled to retire upon a determination that the true cause for compulsory retirement is the employee’s union activities.
The law and this Court frowns upon
unfair labor practices by management, including so-called union-busting. Such
illegal practices will not be sustained by the Court, even if guised under
ostensibly legal premises. But with respect to an active unionized employee who
claims having lost his/her job for union activities, there are different
considerations presented if the termination is justified under just or
authorized cause under the Labor Code; and if separation from service is effected
through the exercise of a duly accorded management prerogative to retire an
employee. There is perhaps a greater imperative to recognize the management
prerogative on retirement than the prerogative to dismiss employees for just or
authorized causes. For one, there is a greater subjectivity, not to mention
factual dispute, attached to the concepts of just or authorized cause than
retirement which normally contemplates merely the attainment of a certain age
or a certain number of years in the service. It would be easier for management
desirous to eliminate pesky union members to abuse the prerogative of
termination for such purpose since the determination of just or authorized
cause is rarely a simplistic question, but involves facts highly prone to dispute
and subjective interpretation.
On the other hand, the exercise by
management of its retirement prerogative is less susceptible to dubitability as
to the question whether an employee could be validly retired. The only factual
matter to consider then is whether the employee concerned had attained the
requisite age or number of years in service pursuant to the CBA or employment
agreement, or if none, pursuant to Article 287 of the Labor Code. In fact, the
question of the amount of retirement benefits is more likely to be questioned
than the retirement itself. Evidently, it more clearly emerges in the case of
retirement that management would anyway have the right to retire an employee,
no matter the degree of involvement of said employee in union activities.
There is another point that militates
against the
We can thus
can comfortably uphold the principle, as reiterated in Philippine Airlines,[34]
that the exercise by the employer of a valid and duly established prerogative
to retire an employee does not constitute unfair labor practice.
There are
other arguments raised by petitioners. We need to discuss them only in brief,
as they are no longer central to the resolution of this case.
The School
insisted that Llagas and Javier were actually managerial employees, and it was
illegal for the
Article
212(m) of the Labor Code defines a managerial employee as "one who is
vested with powers or prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees, or to effectively recommend such managerial
actions." The functions of the Dean of Student Affairs, as occupied by
Llagas, are enumerated in the Faculty Manual.
The salient portions are hereby enumerated:
a. Manages the High School Department with the Registrar and Guidance Counselors (acting as a COLLEGIAL BODY) in the absence of the Director or Principal.
b. Enforces the school rules and regulations governing students to maintain discipline.
x x x x
g. Plans with the Guidance Counselors student leadership training programs to encourage dynamic and responsible leadership among the students and submits the same for the approval of the Principal/Director.
x x x x
i. Studies proposals on extra-curricular or co-curricular activities and projects proposed by teachers and students and recommends to the Principal/Director the necessary approval.
j. Implements and supervises activities and projects approved by the Principal/Director so that the activities and projects follow faithfully the conditions set forth by the Principal/Director in the approval.
k. Assists in the planning, supervising and evaluating of programs of co-curricular activities in line with the philosophy and objectives of the School for the total development of the students.
l. Recommends to the Principal policies and rules to serve as guides to effective implementation of the student activity program.[36]
x x x x
It is fairly obvious from a perusal of
the list that the Dean of Student Affairs exercises managerial functions,
thereby classifying Llagas as a managerial employee.
Javier was occupying the position of
Subject Area Coordinator. Her duties and
responsibilities include:
1. Recommends to the principal’s consideration the appointment of faculty members in the department, their promotion, discipline and even termination;
2. Recommends advisory responsibilities of faculty members;
3. Recommends to the principal curricular changes, purchase the books and periodicals, supplies and equipment for the growth of the school;
4.
Recommends his/her colleagues and serves as
channel between teachers in the department the principal and/or director.[37]
Supervisory
employees, as defined in Article 212(m) are those who, in the interest of the
employer, effectively recommend such managerial actions if the exercise of such
authority is not merely routinary or clerical in nature but requires the use of
independent judgment.
In the same
vein, a reading of the above functions leads us to conclude that Javier was a
supervisory employee. Verily, Javier
made recommendations as to what actions to take in hiring, termination,
disciplinary actions, and management policies, among others.
We can
concede, as the Court of Appeals noted, that such job descriptions or
appellations are meaningless should it be established that the actual duties
performed by the employees concerned are neither managerial nor supervisory in
nature. Yet on this point, we defer to the factual finding of the NLRC, the
proximate trier of facts, that Llagas and Javier were indeed managerial and
supervisory employees, respectively.
Having
established that Llagas is a managerial employee, she is proscribed from
joining a labor union,[38]
more so being elected as union officer.
In the case of Javier, a supervisory employee, she may join a labor
union composed only of supervisory employees.[39] Finding both union officers to be employees
not belonging to the rank-and-file, their membership in the
Since the
strike has been declared as illegal based on the foregoing discussion, we need
not dwell on its legality with respect to the means employed by the
Finally,
there is neither legal nor factual justification in awarding backwages to some
union officers who have lost their employment status, in light of our finding
that the strike is illegal. The ruling of the NLRC is thus upheld on this
point. We are also satisfied with the disposition of the NLRC that mandates
that Llagas and Javier (or her heirs) receive their retirement benefits.
WHEREFORE, the petition is
GRANTED. The Resolution dated
SO ORDERED.
DANTE O. TINGA
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA
CARPIO MORALES
Associate
Justice Associate
Justice