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INTERPHIL LABORATORIES EMPLOYEES UNION-FFW v. INTERPHIL LABORATORIES

FACTS:

The Interphil Laboratories Employees Union-FFW (petitioner) is the sole and exclusive bargaining agent of the rank-and-file employees of Interphil Laboratories, Inc. They had a Collective Bargaining Agreement (CBA) effective from August 1, 1990, to July 31, 1993.

Prior to the expiration of the CBA, Nestor Ocampo, the union president, and Hernando Clemente, a union director, approached Allesandro G. Salazar, Vice-President-Human Resources Department of respondent company, to inquire about the company's stance on the duration of the CBA. Salazar informed them that it could be discussed during formal negotiations.

In March 1993, Ocampo and Clemente approached Salazar again to inquire about the CBA status and received the same response. In April 1993, Ocampo requested a meeting to discuss the duration and effectivity of the CBA. Salazar agreed, and during the meeting, the union officers asked if the new CBA could be effective for two years starting August 1, 1993. Salazar deemed it premature to discuss the matter and stated that the company could not make a decision at that time.

The following day, on April 16, 1993, all rank-and-file employees refused to follow their regular two-shift work schedule, causing disruption to the company's operations. When Salazar asked about the reason for their refusal, the employees told him to ask the union officers. In an attempt to minimize the damage, Salazar requested a meeting with the union officers, during which the employees stated that they would only return to their normal work schedule if the company agreed to their demands regarding the effectivity and duration of the new CBA. Salazar reiterated that the matter could be better discussed during formal renegotiations. Despite this, the overtime boycott and work slowdown continued, significantly delaying production.

On May 14, 1993, the petitioner union submitted its CBA proposal to the respondent company, who filed a counter-proposal. Subsequently, the respondent company filed a petition with the National Labor Relations Commission (NLRC) to declare the petitioner union's actions, such as the overtime boycott and work slowdown, as an illegal strike. On September 3, 1993, the case was docketed as NLRC-NCR Case No. 00-09-05529-93 and assigned to Labor Arbiter Manuel R. Caday.

Additionally, on October 22, 1993, the respondent company filed an urgent request for preventive mediation with the National Conciliation and Mediation Board (NCMB) to assist in the CBA negotiations. However, no agreement was reached, leading the respondent company to file a petition for the assumption of jurisdiction on November 15, 1993.

On January 24, 1994, the petitioner union filed a Notice of Strike with the NCMB, citing unfair labor practice by the respondent company. On February 12, 1994, the union staged a strike. As a result, Secretary of Labor Nieves Confesor issued an assumption order on February 14, 1994, directing the respondent company to accept all striking workers back to work under the same terms and conditions as before the strike. The order also required the petitioner union to comply with the return-to-work orders. The assumption order subsumed all pending cases related to the labor dispute.

During this time, the case before Labor Arbiter Caday was put on hold due to the petitioner union's motion to consolidate the case with the labor dispute pending before the Secretary of Labor. Despite objections from the respondent company, Labor Arbiter Caday suspended the proceedings. However, on June 6, 1994, Acting Labor Secretary Jose S. Brillantes directed Labor Arbiters Caday and M. Sol del Rosario to proceed with the hearings, as the issues raised would require a formal hearing and presentation of evidence.

On September 5, 1995, Labor Arbiter Caday submitted his recommendation to Secretary of Labor Leonardo A. Quisumbing, who approved and adopted the report in his order dated August 13, 1997.

The case involves a labor dispute between a union and the respondent company. The labor arbiter issued a report declaring the union's "overtime boycott" and "work slowdown" as an illegal strike and finding the union officers involved to have lost their employment status. The labor arbiter also found the respondents guilty of unfair labor practice for violating the existing collective bargaining agreement (CBA). The union filed a motion for reconsideration, but it was denied. The union then filed a petition for certiorari with the Court of Appeals, which dismissed the petition. The union's motion for reconsideration was also denied. The union then filed a petition with the Supreme Court, alleging grave abuse of discretion by the Court of Appeals. The Court of Appeals upheld the jurisdiction of the Secretary of Labor and Employment to rule on the illegal strike case, considering that the issues were intertwined with the labor dispute before the Secretary. The Court also cited a previous case that confirmed the authority of the Secretary of Labor to assume jurisdiction over labor disputes. The Court further stated that the factual findings of the Labor Arbiter should be respected when supported by evidence.

This case involves a dispute between petitioner union and respondent company regarding the interpretation of the working hours stated in their collective bargaining agreement (CBA). The Labor Arbiter, Labor Secretary, and Court of Appeals all adopted and affirmed the report and recommendation of Labor Arbiter Caday, which was unfavorable to the petitioner. The petitioner argues that the lower courts disregarded the parol evidence rule in upholding the respondent's claim that the work schedule was from 6:00 a.m. to 6:00 p.m. and from 6:00 p.m. to 6:00 a.m. The petitioner contends that the provisions of the CBA clearly state the normal working hours.

ISSUES:

  1. Whether the Labor Arbiter and the Court of Appeals erred in disregarding the parol evidence rule when they admitted evidence contrary to what was stated in the CBA.

  2. Whether the respondents engaged in an illegal strike through the "overtime boycott" and "work slowdown".

  3. Whether the respondents' actions of engaging in an overtime boycott and work slowdown constituted an illegal strike.

  4. Whether the respondents' denial of involvement in the work slowdown was credible.

  5. Whether the respondents engaged in a strike on an installment basis through their concerted activities of "overtime boycott" and "work slowdown"

  6. Whether the "overtime boycott" or "work slowdown" constituted a violation of the collective bargaining agreement (CBA)

RULING:

  1. The Labor Arbiter and the Court of Appeals did not err in admitting evidence contrary to what was stated in the CBA. In labor cases, the rules of evidence prevailing in courts of law or equity are not controlling. The Labor Arbiter has the discretion to accept and evaluate evidence other than what is stated in the CBA.

  2. The "overtime boycott" and "work slowdown" committed by the respondents amounted to an illegal strike.

  3. The Court held that the respondents' actions amounted to an illegal strike. The undisputed testimonies of the company's Vice-President-Human Resources Department and other Department Managers, as well as the testimony of a union member, established that the union officers instigated and orchestrated the overtime boycott and work slowdown. These actions caused considerable delay in production and complaints from clients/customers, which constituted a disruption of the company's operations. Therefore, the respondents' actions qualified as an illegal strike.

  4. The Court found the respondents' denial of involvement in the work slowdown unreliable. The witness presented by the respondents, M. Theresa Montejo, admitted that she prepared productivity reports during a period when she was on union leave and had no personal knowledge of the reports. This undermined the credibility of the respondents' claim that there was no change in work efficiency.

  5. Yes, the respondents engaged in a strike on an installment basis through their concerted activities of "overtime boycott" and "work slowdown". The respondents' unjustified unilateral alteration of the work schedule, which resulted in financial losses to the company and damage to its business reputation, can be classified as a strike on an installment basis.

  6. Yes, the "overtime boycott" or "work slowdown" constituted a violation of the CBA. The CBA explicitly prohibits the union or employees from staging a strike or engaging in slowdown or interruption of work.

PRINCIPLES:

  • Labor cases are not bound by rigid and technical application of rules of procedure and evidence.

  • The discretion to accept and evaluate evidence in labor cases lies with the Labor Arbiter.

  • The "parol evidence rule" is not strictly applied in labor cases.

  • Factual findings of the Labor Arbiter, when supported by sufficient evidence, are accorded due respect by the Supreme Court.

  • Employees can be deemed to have waived certain provisions of the CBA if they adhere to a different arrangement without question or complaint.

  • A strike on an installment basis refers to willful reduction in the rate of work by workers through concerted action to restrict the output of the employer, with the purpose of compelling management to grant their demands.

  • A slowdown is generally condemned as inherently illicit and unjustifiable as it allows employees to work on their own terms, selecting what part of their allotted tasks they care to perform or refusing openly or secretly to do other work, to the employer's damage.

  • The extension of substantial separation benefits by the company to some union officers during the pendency of the case does not condone the illegal acts they committed and should not be viewed as punishment to the company.