INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO v. CALICA

FACTS:

The petitioner, Indophil Textile Mill Workers Union-PTGWO, seeks the nullification of an award issued by Voluntary Arbitrator Teodorico P. Calica. The award states that a provision in the Collective Bargaining Agreement (CBA) does not extend to the employees of Indophil Acrylic Manufacturing Corporation. The petitioner is the legitimate labor organization and exclusive bargaining agent of the rank-and-file employees of Indophil Textile Mills, Inc. Meanwhile, Indophil Textile Mills, Inc. is a corporation engaged in the manufacture, sale, and export of yarns and materials. In 1987, the petitioner and private respondent executed a collective bargaining agreement. Subsequently, Indophil Acrylic Manufacturing Corporation was formed and registered, and it began operations in 1988, hiring its own workers. The workers of Acrylic unionized in July 1989 and executed a separate collective bargaining agreement. The petitioner argues that the facilities of Acrylic should be considered as an extension or expansion of the private respondent, while the private respondent argues that Acrylic is a separate entity with a legitimate business purpose. The dispute was submitted to the respondent Voluntary Arbitrator, who rendered an award stating that the CBA provision does not extend to the employees of Acrylic. The petitioner raises four issues in the petition, one of which is whether the operations in Indophil Acrylic Corporation are an extension or expansion of the private respondent, and whether the rank-and-file employees at Acrylic should be recognized as part of the bargaining unit. The petitioner claims that the creation of Acrylic is a device to evade the application of the CBA. On the other hand, the respondent argues that Acrylic has a separate legitimate business purpose.

ISSUES:

  1. Whether or not the respondent arbitrator erred in interpreting Section 1(c), Article I of the CBA between petitioner union and respondent company.

  2. Whether or not Indophil Acrylic is a separate and distinct entity from respondent company for purposes of union representation.

  3. Whether or not the respondent arbitrator gravely abused his discretion amounting to lack or excess of jurisdiction.

  4. Whether or not the respondent arbitrator violated petitioner union's cardinal primary right to due process.

RULING:

  1. The Voluntary Arbitrator interpreted Section 1(c), Article I of the CBA and found that it does not extend to the employees of Indophil Acrylic Manufacturing Corporation as an extension or expansion of Indophil Textile Mills, Inc. The award stated that it would be a strained interpretation of the CBA provision to include the employees of Acrylic within the coverage of the CBA. The court did not provide a ruling on the other issues raised by the petitioner.

PRINCIPLES:

  • The interpretation of the provisions of a CBA is within the purview of the Voluntary Arbitrator.

  • Separate and distinct entities may have separate legitimate business purposes and cannot be considered alter egos or business conduits of each other.