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-Petitioner Pepsi-Cola Products Philippines, Inc. (Pepsi) is a domestic corporation
engaged in the manufacturing, bottling and distribution of soft drink products. In
view of its business, Pepsi operates plants all over the Philippines, one of which is
located in Sto. Nio, Tanauan, Leyte (Tanauan Plant).
Respondents, on the other hand, are members of the Leyte Pepsi-Cola Employees
Union-Associated Labor Union (LEPCEU-ALU), a legitimate labor organization
composed of rank-and-file employees in Pepsi's Tanauan Plant, duly registered with
the Department of Labor and Employment (DOLE)
-In 1999, Pepsi adopted a company-wide retrenchment program denominated as
Corporate Rightsizing Program.7 To commence with its program, it sent a notice of
retrenchment to the DOLE8 as well as individual notices to the affected employees
informing them of their termination from work.9 Subsequently, on July 13, 1999,
Pepsi notified the DOLE of the initial batch of forty-seven (47) workers to be
retrenched. Among these employees were six (6) elected officers and twenty-nine
(29) active members of the LEPCEU-ALU, including herein respondents.11
On July 19, 1999, LEPCEU-ALU filed a Notice of Strike before the National
Conciliation and Mediation Board (NCMB) due to Pepsis alleged acts of union
busting/ULP.12 It claimed that Pepsis adoption of the retrenchment program was
designed solely to bust their union so that come freedom period, Pepsis company
union, the Leyte Pepsi-Cola Employees Union-Union de Obreros de Filipinas #49
(LEPCEU-UOEF#49) which was also the incumbent bargaining union at that time
would garner the majority vote to retain its exclusive bargaining status.13 Hence,
on July 23, 1999, LEPCEU-ALU went on strike.
On July 27, 1999, Pepsi filed before the NLRC a petition to declare the strike illegal
with a prayer for the loss of employment status of union leaders and some union
members.15 On even date, then DOLE Secretary Bienvenido A. Laguesma certified
the labor dispute to the NLRC for compulsory arbitration.16 A return-to-work order
was also issued.17
Incidentally, one of the respondents, respondent Saunder Santiago Remandaban III
(Remandaban), failed to report for work within twenty-four (24) hours from receipt
of the said order. Because of this, he was served with a notice of loss of
employment status (dated July 30, 1999) which he challenged before the NLRC,
asserting that his absence on that day was justified because he had to consult a
physician regarding the persistent and excruciating pain of the inner side of his right
Eventually, Pepsi and LEPCEU-ALU agreed to settle their labor dispute arising from
the companys retrenchment program and thus, executed the Agreement.
Pursuant thereto, respondents signed individual release and quitclaim forms in
September 1999 (September 1999 quitclaims)20 stating that Pepsi would be
released and discharged from any action arising from their employment.

Notwithstanding the foregoing, respondents21 still filed separate complaints for

illegal dismissal with the NLRC.
ISSUE: whether Pepsi committed ULP in the form of union busting.
HELD: NO. Mindful of their nature, the Court finds it difficult to attribute any act of
union busting or ULP on the part of Pepsi considering that it retrenched its
employees in good faith. As earlier discussed, Pepsi tried to sit-down with its
employees to arrive at mutually beneficial criteria which would have been adopted
for their intended retrenchment. In the same vein, Pepsis cooperation during the
NCMB-supervised conciliation conferences can also be gleaned from the records.
Furthermore, the fact that Pepsis rightsizing program was implemented on a
company-wide basis dilutes respondents claim that Pepsis retrenchment scheme
was calculated to stymie its union activities, much less diminish its constituency.
Therefore, absent any perceived threat to LEPCEU-ALUs existence or a violation of
respondents right to self-organization as demonstrated by the foregoing
actuations Pepsi cannot be said to have committed union busting or ULP in this

2. Bankard, Inc. vs. NLRC

-Bankard Employees Union-AWATU (Union) filed before the National Conciliation and
Mediation Board (NCMB) its first Notice of Strike, alleging commission of unfair labor
practices by petitioner Bankard, Inc. (Bankard), to wit: 1) job contractualization; 2)
outsourcing/contracting-out jobs; 3) manpower rationalizing program; and 4)
-the initial conference was held where the Union clarified the issues cited in the
NOS. On July 5, 2000, the Union held its strike vote balloting where the members
voted in favor of a strike. On July 10, 2000, Bankard asked the Office of the
Secretary of Labor to assume jurisdiction over the labor dispute or to certify the
same to the NLRC for compulsory arbitration which was granted.
-the Union declared a CBA bargaining deadlock. The following day, the Union filed
its second NOS, docketed as NS-07-265-00, alleging bargaining in bad faith on the
part of Bankard. Bankard then again asked the Office of the Secretary of Labor to
assume jurisdiction, which was granted. Thus, the Order, dated August 9, 2000,
certifying the labor dispute to the NLRC, was issued.
The Union, despite the two certification orders issued by the Labor Secretary
enjoining them from conducting a strike or lockout and from committing any act
that would exacerbate the situation, went on strike.
-During the conciliatory conferences, the parties failed to amicably settle their
ISSUE: whether or not Bankard committed acts considered as ULP.
HELD: Contracting out of services is an exercise of business judgment or
management prerogative. Absent any proof that management acted in a malicious
or arbitrary manner, the Court will not interfere with the exercise of judgment by an

employer.Furthermore, bear in mind that ULP is punishable with both civil and/or
criminal sanctions. As such, the party so alleging must necessarily prove it by
substantial evidence. The Union, as earlier noted, failed to do this. Bankard merely
validly exercised its management prerogative. Not shown to have acted maliciously
or arbitrarily, no act of ULP can be imputed against it.


-Petitioners were former union members of Radio Philippines Network Employees
Union (RPNEU), a legitimate labor organization and the sole and exclusive
bargaining agent of the rank and file employees of Radio Philippines Network (RPN),
a government-sequestered corporation involved in commercial radio and television
broadcasting affairs, while the respondents were the unions elected officers and
-on suspicion of union mismanagement, petitioners, together with some other union
members, filed a complaint for impeachment of their union president, Reynato
Siozon, before the executive board of RPN, which was eventually abandoned. They
later re-lodged the impeachment complaint, this time, against all the union officers
and members of RPNEU before the Department of Labor and Employment (DOLE)
-Thereafter, 2 written complaints, dated May 26, 2005 and May 27, 2005, were filed
against petitioners and several others for alleged violation of the unions
Constitution and By Laws.
ISSUE: Whether respondents is guilty of ULP.
HELD: NO. It is well-settled that workers and employers organizations shall have
the right to draw up their constitutions and rules to elect their representatives in full
freedom, to organize their administration and activities and to formulate their
programs.38 In this case, RPNEUs Constitution and By-Laws expressly mandate
that before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed of all the internal remedies within the
organization. Petitioners were found to have violated the provisions of the unions
Constitution and By-Laws when they filed petitions for impeachment against their
union officers and for audit before the DOLE without first exhausting all internal
remedies available within their organization. This act is a ground for expulsion from
union membership. Thus, petitioners expulsion from the union was not a deliberate
attempt to curtail or restrict their right to organize, but was triggered by the
commission of an act, expressly sanctioned by Section 2.5 of Article IX of the
unions Constitution and By- Laws.


-BOMC, which was created pursuant to Central Bank5 Circular No. 1388, Series of
1993 (CBP Circular No. 1388, 1993), and primarily engaged in providing and/or
handling support services for banks and other financial institutions, is a subsidiary
of the Bank of Philippine Islands (BPI) operating and functioning as an entirely
separate and distinct entity.
A service agreement between BPI and BOMC was initially implemented in BPIs
Metro Manila branches. In this agreement, BOMC undertook to provide services such
as check clearing, delivery of bank statements, fund transfers, card production,
operations accounting and control, and cash servicing, conformably with BSP
Circular No. 1388. Not a single BPI employee was displaced and those performing
the functions, which were transferred to BOMC, were given other assignments.
The Manila chapter of BPI Employees Union (BPIEU-Metro ManilaFUBU) then filed a
complaint for unfair labor practice (ULP).
-the service agreement was likewise implemented in Davao City. Later, a merger
between BPI and Far East Bank and Trust Company (FEBTC) took effect on April 10,
2000 with BPI as the surviving corporation. Thereafter, BPIs cashiering function and
FEBTCs cashiering, distribution and bookkeeping functions were handled by BOMC.
Consequently, twelve (12) former FEBTC employees were transferred to BOMC to
complete the latters service complement.

BPI Davaos rank and file collective bargaining agent, BPI Employees Union-Davao
City-FUBU (Union), objected to the transfer of the functions and the twelve (12)
personnel to BOMC contending that the functions rightfully belonged to the BPI
employees and that the Union was deprived of membership of former FEBTC
personnel who, by virtue of the merger, would have formed part of the bargaining
unit represented by the Union pursuant to its union shop provision in the CBA.7
The Union then filed a formal protest on June 14, 2000 addressed to BPI Vice
Presidents Claro M. Reyes and Cecil Conanan reiterating its objection. It requested
the BPI management to submit the BOMC issue to the grievance procedure under
the CBA, but BPI did not consider it as "grievable." Instead, BPI proposed a Labor
Management Conference (LMC) between the parties.
During the LMC, BPI invoked management prerogative stating that the creation of
the BOMC was to preserve more jobs and to designate it as an agency to place
employees where they were most needed. On the other hand, the Union charged
that BOMC undermined the existence of the union since it reduced or divided the
bargaining unit.
ISSUE: whether or not the act of BPI to outsource the cashiering, distribution and
bookkeeping functions to BOMC is in conformity with the law and the existing CBA.
HELD: It is to be emphasized that contracting out of services is not illegal
perse.1wphi1 It is an exercise of business judgment or management prerogative.
Absent proof that the management acted in a malicious or arbitrary manner, the
Court will not interfere with the exercise of judgment by an employer.32 In this case,
bad faith cannot be attributed to BPI because its actions were authorized by CBP

Circular No. 1388, Series of 199333 issued by the Monetary Board of the then
Central Bank of the Philippines (now Bangko Sentral ng Pilipinas). The circular
covered amendments in Book I of the Manual of Regulations for Banks and Other
Financial Intermediaries, particularly on the matter of bank service contracts. A
finding of ULP necessarily requires the alleging party to prove it with substantial
evidence. Unfortunately, the Union failed to discharge this burden.
Much has been said about the applicability of D.O. No. 10. Both the NLRC and the
CA agreed with BPI that the said order does not apply. With BPI, as a commercial
bank, its transactions are subject to the rules and regulations of the governing
agency which is the Bangko Sentral ng Pilipinas.34 The Union insists that D.O. No.
10 should prevail.
The Court is of the view, however, that there is no conflict between D.O. No. 10 and
CBP Circular No. 1388. In fact, they complement each other.

-Petitioners were former regular employees of respondent Jardine Pacific Finance,
Inc. (formerly MB Finance) (Jardine). The petitioners were also officers and members
of MB Finance Employees Association-FFW Chapter (the Union), a legitimate labor
union and the sole exclusive bargaining agent of the employees of Jardine. The
table below shows the petitioners previously occupied positions, as well as their
total length of service with Jardine before their dismissal from employment.
-On the claim of financial losses, Jardine decided to reorganize and implement a
redundancy program among its employees. The petitioners were among those
affected by the redundancy program. Jardine thereafter hired contractual employees
to undertake the functions these employees used to perform.
-The Union filed a notice of strike with the National Conciliation and Mediation Board
(NCMB), questioning the termination of employment of the petitioners who were
also union officers. The Union alleged unfair labor practice on the part of Jardine, as
well as discrimination in the dismissal of its officers and members.
Negotiations ensued between the Union and Jardine under the auspices of the
NCMB, and both parties eventually reached an amicable settlement. In the
settlement, the petitioners accepted their redundancy pay without prejudice to their
right to question the legality of their dismissal with the NLRC. Jardine paid the
petitioners a separation package composed of their severance pay, plus their
grossed up transportation allowance.7
-the petitioners and the Union filed a complaint against Jardine with the NLRC for
illegal dismissal and unfair labor practice.
ISSUE: whether Jardine committed an unfair labor practice against the Union.
HELD: based on the guidelines set by the Court in the cases of Golden Thread and
Asian Alcohol, we find that at two levels, Jardine failed to set the required fair and

reasonable criteria in the termination of the petitioners employment, leading to the

conclusion that the termination from the service was arbitrary and in bad faith.
The first level, based on Asian Alcohol, is broader as the case recognized
distinctions on a per position basis. At this level, Jardine failed to explain why among
all of the existing positions in its organization, Jardine chose the petitioners posts as
the ones which have already become redundant and terminable.1wphi1
The second level, derived from Golden Thread, is more specific. Here the distinction
narrows down to the particular employees occupying the same positions which were
already declared to be redundant. At this level, Jardines lapse is shown by its failure
to explain why among all of its employees whose positions were determined to be
redundant, the petitioners were the ones selected to be dismissed from the service.
Notably, the LA and the NLRC also arrived at the same conclusion that the
redundancy program was not valid because Jardine hired contractual employees as
replacements, thus, contradicting underlying reasons of redundancy. The CA
significantly chose to disregard these coherent labor findings without fully justifying
its move. At the very least, this was an indicator that something was wrong
somewhere in these dismissals. It was clear legal error for the CA to recognize grave
abuse of discretion when none occurred.


-T&H Shopfitters Corporation/ Gin Queen Corporation workers union (THS-GQ Union)
, filed their Complaint for Unfair Labor Practice (ULP) by way of union busting, and
Illegal Lockout, with moral and exemplary damages and attorneys fees, against
T&H Shopfitters Corporation (T&H Shopfitters) and Gin Queen Corporation (Gin
Queen) (collectively referred to as petitioners), before the Labor Arbiter (LA).
Respondents treated T&H Shopfitters and Gin Queen as a single entity and their
sole employer.
-the Department of Labor and Employment (DOLE), Regional Office No. III issued a
certificate of registration in favor of THS-GQ Union.
ISSUE: whether ULP acts were committed by petitioners against respondents in the
case at bench.
In the case of Insular Life Assurance Co., Ltd. Employees Association NATU v.
Insular Life Assurance Co. Ltd., 16 this Court had occasion to lay down the test of

whether an employer has interfered with and coerced employees in the exercise of
their right to self-organization, that is, whether the employer has engaged in
conduct which, it may reasonably be said, tends to interfere with the free exercise
of employees rights; and that it is not necessary that there be direct evidence that
any employee was in fact intimidated or coerced by statements of threats of the
employer if there is a reasonable inference that anti-union conduct of the employer
does have an adverse effect on self-organization and collective bargaining. The
questioned acts of petitioners, namely: 1) sponsoring a field trip to Zambales for its
employees, to the exclusion of union members, before the scheduled certification
election; 2) the active campaign by the sales officer of petitioners against the union
prevailing as a bargaining agent during the field trip; 3) escorting its employees
after the field trip to the polling center; 4) the continuous hiring of subcontractors
performing respondents functions; 5) assigning union members to the Cabangan
site to work as grass cutters; and 6) the enforcement of work on a rotational basis
for union members, all reek of interference on the part of petitioners. Indubitably,
the various acts of petitioners, taken together, reasonably support an inference
that, indeed, such were all orchestrated to restrict respondents free exercise of
their right to self-organization. The Court is of the considered view that petitioners
undisputed actions prior and immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled in the affairs of its employees
in selecting their exclusive bargaining representative. In Holy Child Catholic School
v. Hon. Patricia Sto. Tomas, 17 the Court ruled that a certification election was the
sole concern of the workers, save when the employer itself had to file the petition x
x x, but even after such filing, its role in the certification process ceased and
became merely a bystander. Thus, petitioners had no business persuading and/or
assisting its employees in their legally protected independent process of selecting
their exclusive bargaining representative. The fact and peculiar timing of the field
trip sponsored by petitioners for its employees not affiliated with THS-GQ Union,
although a positive enticement, was undoubtedly extraneous influence designed to
impede respondents in their quest to be certified. This cannot be countenanced.
Not content with achieving a no union vote in the certification election, petitioners
launched a vindictive campaign against union members by assigning work on a
rotational basis while subcontractors performed the latters functions regularly.
Worse, some of the respondents were made to work as grass cutters in an effort to
dissuade them from further collective action. Again, this cannot be countenanced.
More importantly, petitioners' bare denial of some of the complained acts and
unacceptable explanations, a mere afte1ihought at best, cannot prevail over
respondents' detailed narration of the events that transpired. At this juncture, it
bears to emphasize that in labor cases, the quantum of proof necessary is
substantial evidence, 18 or that amount of relevant evidence as a reasonable mind
might accept as adequate to suppoti a conclusion, even if other minds, equally
reasonable, might conceivably opine otherwise. 19 In fine, mindful of the nature of
the charge of ULP, including its civil and/or criminal consequences, the Cou1i finds
that the NLRC, as correctly sustained by the CA, had sufficient factual and legal
bases to support its finding of ULP.