Philbag Industrial Manufacturing Corp v Philbag Workers Union-Lakas at Gabay Ng Manggagawang Nagkakaisa

PHILBAG INDUSTRIAL MANUFACTURING CORPORATION v PHILBAG WORKERS UNION-LAKAS AT GABAY NG MANGGAGAWANG NAGKAKAISA June 20, 2012|Brion, J. | Management Prerogatives - Limitations Digester: Lingat, Anna Mickaella N. SUMMARY: Mauricio and Camacho were hired by Philbag Industrial as cutter and circular loom operator, respectively. They were dismissed after incurring demerits based on the company’s rules and regulations. Mauricio was dismissed because he was reported to be idling and wasting company hours while Camacho was dismissed for being on AWOL. SC upheld the ruling of CA, stating that the company failed to prove that the termination was for a valid or authorized cause. It overstepped the bounds of its management prerogative. DOCTRINE: Management prerogative must be exercised in good faith and with due regard to the rights of the workers in the spirit of fairness and with justice in mind. FACTS:  Edwin Mauricio and Zharralyn Camacho were employees of the Philbag Industrial Manufacturing Corporation (company) until their dismissal in second half of 2004. o Mauricio was hired as a cutter while Camacho was a circular loom operator. o They were members of Philbag Workers Union-Lakas at Gabay ng Manggagawang Nagkakaisa (union) – the exclusive bargaining representative of the company’s rankand-file employees. o The union had a collective bargaining agreement with company.  Mauricio and Camacho protested their dismissal. o The union and company convened the CBAs grievance machinery in effort to resolve the matter at plant level but were unable to reach a settlement. o They agreed to resolve the dispute through voluntary arbitration.  Voluntary Arbitration Proceedings: o Mauricio’s case:  Allegedly, on May 24, 2004 (5am): Mauricio was at his turn unwinding the textile fromt he roll. At a distance, the cutting supervisor Reinoso saw that Mauricio was not cutting the textile. She then concluded that Mauricio was not doing his job.

Reinoso reported the incident to the management and then Mauricio received a memorandum directing him to explain why he should not be dismissed for violating Section 3 of company rules and regulations: which states that commission of any offense listed shall be given three demerit points. This includes idling or wasting company working hours or loitering on company time.  Mauricio denied that he committed the violation charged, that he was doing his job on May 24, 2004.  He was given 3 demerit points, amounting to total of 12 demerit points (added 9 demerit points from unauthorized absence and insubordination he committed earlier). According to the company, this warrants his dismissal.  Union questioned the dismissal, contending Reinoso’s report was without basis. o Camacho’s case:  Camacho was terminated because of AWOL for six or more consecutive days (Section E, Rule 1).  She was advised to have a complete rest because she suffered from abdominal pain and slight bleeding (her condition was diagnosed as threatened abortion).  At first she was advised to rest from March 3 to 14, 2004. This was issued with a medical certificate but the company nurse and doctor did not sign it because they wanted to see Camacho first.  She later notified the personal manager, Chona Beth Nieto, and assured her that she would present the medical certificate when she returned to work.  Her physician advised her to take an additional 20-day rest period because of vaginal bleeding.  On May 11, 2004, she was certified fit to work.  On the same day, she was asked to explain why she shouldn’t be dismissed. She replied that because of her illness, she forgot to have her medical certificate countersigned by the company doctor.  She was terminated for incurring 14 demerit points for her AWOL.  Camacho accused company of bad faith, contending that she incurred absences upon advice of her physician to take pregnancy rests. o Answer of company: 

Mauricio was observed idling and wasting company time for two hours.  Camacho failed to follow the proceudre in taking a leave of absence or getting permission from or notifying management and to have her medical certificate countersigned by company doctor. Also, doctor refused to countersign the certificate because it was past Camacho’s sickness period. Voluntary Arbitration Decision:  Dismissal was valid.  VA upheld company’s prerogative to impose disciplinary action on its employees who violate company rules and regulations.  But they should be awarded financial assitance in view of their length of service to the company and for humanitarian consideration: o Mauricio – P20,000 o Camacho – P15,000 

Court of Appeals:  Granted the petition: Mauricio and Camacho were illegally dismissed.  No plausible reason to impose demerit points on Mauricio and Camacho  Reinoso only report the incident a month after its occurence. This is a mere afterthought.  With respect to Camacho, it was not shown that she deliberately disregarded the company rules on the matter.  CA ordered company to pay backwages and separation pay as it considered reinstatement to be no longer viable.  Company filed for an MR contending the case has become academic since it had already ceased operations due to serious business losses. MR denied.

Whether Mauricio and Camacho were illegally dismissed? YES  Company, as the employer, failed to prove that the termination of employement was for a valid or authorized case.  Mauricio’s case: o Company’s submissions failed to establish that he was indeed not doing his job, together with four other employees. He was, as he claimed, unwinding textile from the rolled bulk before cutting it. The cutter deviesd this unwind-and-cut method to make their work easier. This claim was never disputed by the company. o SC also dismissed Reinoso’s report as a mere afterthought. She only filed the report a month after the occurence. She also did not confront Mauricio and the four others she caught idling when she was their supervisor. This raises suspicion on the veracity of her report. o Court stressed that the evidence must be substantial and not arbitrary and founded on clearly established facts to warrant a dismissal.  Camacho’s case: o The circumstances surrounding her absence did not justify her separation from the service. She did not deliberately disregard the company rules. She complied, although quite belatedly. o There was no valid reason for the company doctor not to countersign the medical certificate since it was properly signed by Camacho’s physician. Company doctor could have easily verified the facts stated therein. o Company is deemed informed of Camacho’s illness when they received information through the telephone call.  Company overstepped the bounds of its management prerogative in the dismissal of Mauricio and Camacho. It lost sight of the principle that management prerogative must be exercised in good faith and with due regard to the rights of the workers in the spirit of fairness and with justice in mind.