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PANAY ELECTRIC COMPANY v. NATIONAL LABOR RELATIONS COMMISSION

FACTS:

The petitioner, Panay Electric Company, Inc., filed a petition for certiorari to set aside the resolution of the National Labor Relations Commission (NLRC) in granting separation benefits to Enrique Huyan and Prescilla Napiar and awarding moral and exemplary damages to Huyan. The factual background of the case involves the petitioner posting a notice for a vacant "Report Clerk" position, which was open to any employee with a Pay Class V classification. When no one applied, the EDP/Personnel Manager recommended Enrique Huyan, an Administrative Personnel Assistant and a Vice President of the union. Huyan, however, declined the position citing it as a demotion that would hinder his role as Vice President of the union. Consequently, Huyan received a notice of dismissal on December 3, 1990. The union then filed a notice of strike, which was later lifted on January 25, 1991, with the striking employees, including Huyan, reporting for work. The union argued that Huyan's transfer was a punitive measure for his union activities, while the company claimed it was an act of insubordination. The NLRC ruled that the strike was illegal, resulting in Huyan and Napiar losing their employment status, but they were entitled to separation benefits. Moreover, the NLRC granted moral and exemplary damages to Huyan and issued suspensions to certain union officers and members. The petitioner contested the NLRC's decision regarding the monetary awards and the sanctioning of other union officers and members.

ISSUES:

  1. Whether the transfer of Huyan was done in bad faith and with discrimination.

  2. Whether Huyan's subsequent dismissal was justified.

  3. Whether the dismissal of Enrique Huyan is illegal.

  4. Whether the strike conducted by the union is illegal.

RULING:

  1. The Court found that the transfer of Huyan was made with bad faith and discrimination. The fact that the announcement for the position of Report Clerk was limited to employees in Pay Class V, with only 6 or 7 qualifying out of over a hundred employees, showed that the company had already targeted Huyan for transfer. Furthermore, the EDP/Personnel Manager did not discuss the transfer with Huyan before or after making his recommendation, which demonstrated the company's lack of concern for its employees and supported the arbitrariness of the decision.

  2. The Court ruled that Huyan's refusal to comply with the transfer was justified given the circumstances. There was no official written notice given to Huyan regarding his reassignment, and the company's evidence consisted only of an approved memorandum not addressed to him. The Court also found that Huyan's refusal was not due to defiance, as he had respectfully sought reconsideration, but rather a result of feeling provoked and an affront to his dignity. Therefore, there was no serious misconduct or willful disobedience that would warrant his dismissal.

  3. The dismissal of Enrique Huyan is illegal. While the conduct of the company cannot be strictly considered an unfair labor practice, the exercise of its management prerogative cannot be sustained. However, reinstatement cannot be ordered due to the strained relationship between the parties and Huyan's conduct as a union officer.

  4. The strike conducted by the union is illegal. The strike violated the "no strike, no lock-out" provision in the Collective Bargaining Agreement (CBA). The principal leaders of the strike cannot claim that they were in good faith in their belief that the company was committing unfair labor practice.

PRINCIPLES:

  • Transfer must be done in good faith and without discrimination.

  • Employers have a duty to communicate with and consider the welfare of their employees.

  • Lack of official notice and failure to respond to employee's letter for reconsideration indicate insensitivity by the employer.

  • Justification for refusal to comply with transfer can be found in the context of antecedent circumstances and the employee's sense of dignity.

  • Fair labor practice charges require a specific connection to union membership.

  • The right to strike is not absolute and may be limited by a "no strike, no lock-out" provision in a Collective Bargaining Agreement (CBA). However, this provision does not prevent a strike grounded on unfair labor practice.

  • A strike may be considered illegal if the striking workers are shown to have acted honestly on an impression that the company has committed unfair labor practice and the surrounding circumstances could warrant such a belief in good faith.

  • An employee who knowingly participates in an illegal strike may be declared to have lost their employment status.

  • Suspension may be imposed on union officers who are found guilty of bad faith in taking part in a strike or perpetrating serious disorders during the concerted activity.

  • An employee who is illegally suspended is entitled to back salaries and benefits, as well as moral damages, if the employer's decision to transfer the employee was found to be arbitrary. However, exemplary damages may only be awarded when a person acts in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

  • Underhandedness is required to justify the award of moral and exemplary damages.

  • The Court has the power to modify a decision of the NLRC.