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REN TRANSPORT CORP. AND REYNALDO PAZCOGUIN III v. NLRC

FACTS:

Samahan ng Manggagawa sa Ren Transport (SMART) was a registered union with a collective bargaining agreement (CBA) with Ren Transport Corp. The CBA was set to expire on December 31, 2004. After the 60-day freedom period passed without a challenge to SMART's majority status as the bargaining agent, SMART expressed its willingness to bargain with Ren Transport and sent bargaining proposals. However, Ren Transport failed to reply to the demand.

Later, two members of SMART wrote to the Department of Labor and Employment - National Capital Region (DOLE-NCR) informing them that a majority of SMART members had decided to disaffiliate from their mother federation and form another union called Ren Transport Employees Association (RTEA). SMART contested the alleged disaffiliation through a letter dated April 4, 2005.

During the pendency of the disaffiliation dispute at the DOLE-NCR, Ren Transport stopped remitting the union dues to SMART that were previously checked off from the salaries of union workers as provided under the CBA. On April 19, 2005, Ren Transport voluntarily recognized RTEA as the sole and exclusive bargaining agent of its rank-and-file employees.

Subsequently, SMART filed a complaint for unfair labor practice against Ren Transport on July 6, 2005. The labor arbiter ruled that Ren Transport was guilty of acts of unfair labor practice, explaining that since the disaffiliation issue was still pending, SMART continued to be the certified collective bargaining agent. The labor arbiter also held that Ren Transport's refusal to send a counter-proposal to SMART, failure to remit the union dues, and voluntary recognition of RTEA were clear indications of interference with the employees' right to self-organize.

Both parties elevated the case to the National Labor Relations Commission (NLRC), with SMART only contesting the failure of the labor arbiter to award damages. Ren Transport challenged the entire decision of the labor arbiter. The NLRC affirmed the labor arbiter's finding of unfair labor practice and ordered the remittance of union dues to SMART. It also awarded moral damages to SMART, stating that Ren Transport's refusal to bargain was inspired by malice or bad faith.

Ren Transport filed a motion for reconsideration, alleging that the NLRC did not resolve all the arguments raised in its memorandum of appeal. The NLRC denied the motion, prompting Ren Transport to file a Rule 65 petition with the Court of Appeals (CA). The CA partially granted the petition, deleting the award of moral damages to SMART but affirming the NLRC decision on all other matters. The CA found that SMART, as a corporation, was not entitled to moral damages. Both parties appealed to the Supreme Court.

ISSUES:

  1. Whether Ren Transport committed acts of unfair labor practice.

  2. Whether the decision rendered by the NLRC is valid on account of its failure to pass upon all the errors assigned by Ren Transport.

  3. Whether SMART is entitled to moral damages.

RULING:

  1. Yes, Ren Transport committed acts of unfair labor practice. The labor arbiter and the NLRC both found that Ren Transport's refusal to send a counter-proposal to SMART and the voluntary recognition of another union despite the pendency of the disaffiliation dispute amounted to interference with the employees' right to self-organize.

  2. No, the decision rendered by the NLRC is valid. The Court of Appeals found that the NLRC had passed upon the principal issue of unfair labor practice, which was the main argument raised by Ren Transport.

  3. Yes, SMART is entitled to moral damages. The NLRC awarded moral damages to SMART, finding that Ren Transport's refusal to bargain and the precipitate recognition of the other union were done with malice or bad faith. However, the Court of Appeals deleted the award of moral damages to SMART on the ground that a corporation is not entitled to such damages.

PRINCIPLES:

  • Acts of unfair labor practice, such as interference with the employees' right to self-organize, can lead to liability for the employer.

  • The NLRC's decision is valid as long as it addresses the principal issue raised in the case, even if it does not resolve all the errors assigned by the parties.

  • Moral damages may be awarded for unfair labor practices, but a corporation may not be entitled to such damages.