Lansangan vs. Amkor Technology Philippines, Inc.

577 SCRA 493, G.R. No. 177026 January 30, 2009

Facts:
An anonymous e-mail was sent to the General Manager of Amkor Technology Phil.
(respondent) detailing allegations of malfeasance on the part of its supervisory employees
Lunesa Lansangan and Rosita Cendana (petitioners) for “stealing company time”. Respondent
investigated the matter, requiring petitioners to submit their written explanation. Petitioners
admitted their wrongdoing. Thereupon, respondent terminated petitioners for “extremely serious
offenses” as defined in its Code of Discipline, prompting petitioners to file for a complaint for
illegal dismissal against it.

The LA dismissed the complaint and found petitioners guilty of swiping another employee’s ID
card or requesting another employee to swipe one’s ID card to gain personal advantage and/or
in the interest of cheating, an offense of dishonesty punishable as a serious form of misconduct
and fraud or breach of trust under Art. 282 of the Labor Code, which allows the dismissal of an
employee for a valid cause. The LA, however, ordered the reinstatement of petitioners without
backwages as a measure of equitable and compassionate relief, owing mainly to petitioners’
prior unblemished employment records, and defective monitoring system of respondent.
Respondent assailed the reinstatement aspect of the LA’s order while petitioners moved for the
issuance of a “writ of reinstatement”, without appealing the LA’s finding them guilty of
misconduct. The NLRC granted respondent’s appeal by deleting the reinstatement aspect of the
Arbiter’s decision. On petition for certiorari by petitioners, the CA affirmed the finding that
petitioners were guilty of misconduct and ordered respondent to pay petitioners their
corresponding backwages without qualification and deduction for the date of LA’s decision up to
the date of the NLRC decision. Hence, this petition. Petitioners, citing Roquero vs. PAL, contend
that the payment of backwages should not be computed only up to the promulgation by the
NLRC of its decision.

Issue: W/N petitioners are entitled to full backwages

Ruling: Negative.

The decision of the Arbiter finding that petitioners committed "dishonesty as a form of serious
misconduct and fraud, or breach of trust" had become final, petitioners not having appealed the
same before the NLRC as in fact they even moved for the execution of the reinstatement aspect
of the decision. It bears recalling that it was only respondent which assailed the Arbiter’s
decision to the NLRC – to solely question the propriety of the order for reinstatement, and it
succeeded.

Roquero, as well as Article 223 of the Labor Code on which the appellate court also relied, finds
no application in the present case. Article 223 concerns itself with an interim relief, granted to a
dismissed or separated employee while the case for illegal dismissal is pending appeal, as what
happened in Roquero. It does not apply where there is no finding of illegal dismissal, as in the
present case.
The Arbiter found petitioners’ dismissal to be valid. Such finding had, as stated earlier, become
final, petitioners not having appealed it. Following Article 279 which provides:

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In cases of regular employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his compensation
was withheld from him up to the time of his actual reinstatement (Emphasis,
underscoring and italics supplied),

petitioners are not entitled to full backwages as their dismissal was not found to be illegal.
Agabon v. NLRC so states –– payment of backwages and other benefits is justified only if the
employee was unjustly dismissed.
Contract Bar Rule

Under this rule, a petitioner for certification election cannot be filed when a Collective Bargaining
Agreement (CBA) between the employer and a duly recognized or certified bargaining agent
has been registered with the Bureau of Labor Relations (BLR) in accordance with the Labor
Code. Where the CBA is duly registered, a petition for certification election may be filed only
within the 60-day freedom period prior to its expiry. The purpose of this rule is to ensure stability
in the relationship of the workers and the employer by preventing frequent modifications of any
CBA earlier entered into by them in good faith and for the stipulated original period.

When contract bar rule does NOT apply.

The contract bar rule does not apply in the following cases:
1) Where there is an automatic renewal provision in the CBA but prior to the date
when such automatic renewal became effective, the employer seasonably filed a
manifestation with the Bureau of Labor Relations of its intention to terminate the
said agreement if and when it is established that the bargaining agent does not
represent anymore the majority of the workers in the bargaining unit.
2) Where the CBA, despite its due registration, is found in appropriate proceedings
that: (a) it contains provisions lower than the standards fixed by law; or (b) the
documents supporting its registration are falsified, fraudulent or tainted with
misrepresentation.
3) Where the CBA does not foster industrial stability, such as contracts where the
identity of the representative is in doubt since the employer extended direct
recognition to the union and concluded a CBA therewith less than one (1) year
from the time a certification election was conducted where the “no union” vote
won. This situation obtains in a case where the company entered into a CBA with
the union when its status as exclusive bargaining agent of the employees has not
been established yet.
4) Where the CBA was registered before or during the last sixty (60) days of a
subsisting agreement or during the pendency of a representation case. It is well-
settled that the 60-day freedom period based on the original CBA should not be
affected by any amendment, extension or renewal of the CBA for purposes of
certification election.

Effect of CBA Registration

The registration of the CBA will bar a certification election except within the last sixty days
(freedom period) before the expiration of the five-year CBA.

Automatic Renewal Clause/ Hold-Over Principle

Pending the renewal of the CBA, the parties are bound to keep the status quo and to treat the
terms and conditions embodied therein still in full force and effect during the 60-day freedom
period and/or until a new agreement is negotiated and ultimately concluded and reached by the
parties. This principle is otherwise known as the “automatic renewal clause” which is mandated
by law and therefore deemed incorporated in all CBAs.
For its part, the employer cannot discontinue the grant of the benefits embodied in the CBA
which just expired as it is duty-bound to maintain the status quo by continuing to give the same
benefits until a renewal thereof as reached by the parties. On the part of the union, it has to
observe and continue to abide by its undertakings and commitments under the expired CBA
until the same is renewed.

Legitimate Labor Organization vs. Labor Organization

Labor organization means any union or association of employees which exists in whole or in
part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment.

Legitimate labor organization means any labor organization duly registered with the Department
of Labor and Employment, and includes any branch or local thereof.

Requirements for Registrations of a Legitimate Labor Organization

ART. 240. [234] Requirements of registration. – Any applicant labor organization, association or
group of unions or workers shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements.
a) Fifty pesos (P50.00) registration fee;
b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;
c) The names of all its members comprising at least twenty percent (20%) of all the
employees in the bargaining unit where it seeks to operate; 
d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports; and
e) Four (4) copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it.

ART. 241. [234-A] Chartering and Creation of a Local Chapter. –

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The chapter shall be entitled to all other rights and privileges of a legitimate labor organization
only upon the submission of the following documents, in addition to its charter certificate:
a) The names of the chapter’s officers, their addresses, and the principal office of the
chapter; and
b) The chapter’s constitution and by-laws: Provided, that were the chapter’s constitution
and by-laws are the same as that of the federation or the national union, this fact shall
be indicated accordingly.

The additional supporting requirements shall be certified under oath by the secretary or
treasurer of the chapter and attested by its president.

Union Security Clause

Under this clause, the bargaining union can demand from the employer the dismissal of an
employee who commits a breach of union security arrangement, such as failure to join the union
or to maintain his membership in good standing therein. The same union can also demand the
dismissal of a member who commits an act of disloyalty against it, such as when the member
organizes a rival union.

Grounds for Cancellation of Union Registration

ART. 247. [239] Grounds for Cancellation of Union Registration. – The following may constitute
grounds for cancellation of union registration:
a) Misrepresentation, false statement or fraud in connection with the adoption or ratification
of the constitution and by-laws or amendments thereto, the minutes of ratification, and
the list of members who took part in the ratification;
b) Misrepresentation, false statements or fraud in connection with the election of officers,
minutes of the election of officers, and the list of voters;
c) Voluntary dissolution by the members.

Mixed Membership

The Labor Code has made it a statutory policy to prevent supervisory employees from joining
labor organizations consisting of rank-and-file employees as the concerns which involve
members of either group are normally disparate and contradictory.

ART. 255. [245] Ineligibility of Managerial Employees to Join Any Labor Organization;
Right of Supervisory Employees. -- Managerial Employees are not eligible to join, assist
or form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join, assist
or form separate labor organizations of their own. The rank and file union and the
supervisors’ union operating within the same establishment may join the same
federation or national union.

Clearly, based on this provision, a labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a
legitimate labor organization. Not being one, an organization which carries a mixture of rank-
and-file and supervisory employees cannot possess any of the rights of a legitimate labor
organization, including the right to file a petition for certification election for the purpose of
collective bargaining. (Toyota Motor Philippines Corporation vs. Toyota Motor Philippines
Corporation Labor Union, 268 SCRA 573, G.R. No. 121084 February 19, 1997)

Effect of Mixed Membership

ART. 256. [245-A] Effect of Inclusion as Members of Employees Outside the Bargaining
Unit. – The inclusion as union members of employees outside the bargaining unit shall
not be a ground for the cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said union.

Doctrine of Necessary Implication

Under the confidential employee rule, a rank-and-file employee or a supervisory employee, is
elevated to the position of a managerial employee, under another doctrine called the
DOCTRINE OF NECESSARY IMPLICATION, hence, he is treated as if he is a managerial
employee because of his access to confidential information related to labor relations. THE
DOCTRINE OF NECESSARY IMPLICATION IS THEREFORE THE LEGAL BASIS FOR
INELIGIBILITY OF CONFIDENTIAL EMPLOYEE TO JOIN A UNION.

For example, not all secretaries to top officials of the company may be considered as
confidential
employees, unless they have access to confidential information related to labor relations, such
as when they transcribe or type/encode the counter-proposals of management on the proposals
of the SEBA in a CBA negotiation. That access to such counter-proposals is the type of access
contemplated under this rule.