Union of Supervisors (R.B.)- NATU vs. SEc. of Labor

SUBJECT: LABOR RELATIONS UNION OF SUPERVISORS (R.B.)- NATU VS. THE SECRETARY OF LABOR AND REPUBLIC BANK GR NO. L-39889 NOVEMBER 12, 1981 FACTS: Republic Bank provident fund was established pursuant to the collective bargaining agreement between Republic Bank and its employees. Mr. Norberto Luna, the President of Union of Supervisor’s, is one of the member of Provident Fund’s Board of Directors. He also became a fund administrator and secretary of said Fund. During his 3 years of incumbency as administrator, the fund grew from P278,445.27 to P1,779,159.85. However, inasmuch as this Fund grew abundantly, such fate is opposite with that of Republic Bank (RB) which is suffering financial distress for 10 yrs. With the authority granted by Central Bank, as strategy to combat financial distress, RB decided to establish a money market department or to operate a quasi-banking operation. And one of the best thing that they see fit to tie up with the investment money market operation of the RB is for the Management of the RB to have control over the Provident Fund. And this will more likely to happen if there will be reorganization of the member of the Board of the Provident Fund. This proposed reorganization was deliberated by Mr. De Vera, the Asst. VP of the Republic Bank, which is only proxy at that time to one of the original members of the Board. This deliberation is to carry out the instruction from management of the Republic Bank as to planned reorganization. But Mr. Luna, vehemently objected, saying that the Provident Fund does not belong to Republic Bank but to its officers and employees. But despite this objection, the reorganization still move forward by 3 against 2 votes, those 3 are all management appointees. To protect the interest of the fund, Mr. Luna moved that the trust agreement be executed between the trustees and the members of the Fund.

But, it was during the ensuing discussion of Mr. Luna that he was able to make allegedly the libelous remarks as follows: “ The basis of my apprehension is that if Management will run the Provident Fund I feel the management of Republic Bank are EXPERTS IN DISTRESSING the Republic Bank and it is a known fact for the past 10 years… there is no reason why the Provident Fund should be controlled by the Management” “Moreso, Mr. De Vera, the one who proposed reorganization, has been considered by the Board recently as poor credit risk, thus the Board decided not to give loan to him. So how can we expect a person who cannot be given loan and now will have a say in the PF. I don’t think the PF will allow that” (Paraphrase) After more discussion, Luna’s motion was ruled as without merit by Chairman who precided the said Board meeting. Luna, together with Mr. Canizares , who represented the Republic Bank Employees Union, walked out of the meeting. When they were gone, the 3 remaining management appointees Board Member appointed Mr. Mario Galicia as new administrator (he was a management- appointed trustee) Mr. Abad, the Chairman of RB Provident Fund, wrote Memo to Mr. Luna requesting him to transfer all the relevant documents to the new administrator. But Luna, make a response to Memo stating that: a. He is still the administrator because the Board did not make any motion to declare the position of administrator as vacant b. There was no quorum when the new administrator was elected because based on their rules the quorum must have at least one trustee representing the union. Mr. Abad did not make any response or comment about Mr. Luna’s memo-reply. A special meeting of the Board was conducted but Mr. Luna was not able to attend. Because of this, and the previous libelous remarks and the previous walking out scenario during Board meeting, Mr. Luna was reported by Mr. Abad to the Board of Director of Republic Bank recommending disciplinary action against Mr. Luna. Board of Directors suspend Luna as Branch Manager of San Juan Branch pending the investigation of charges contain in Mr. Abad’s Memo. The charges against Mr. Luna are: a. Dereliction of Duties as trustee of Provident Fund and as employee of the Republic Bank b. Making utterly derogatory and libelous remarks against the entire Management of the Republic Bank.

Mr. Luna answered the charges as follows: a. Provident Fund is a different entity from RB because it has its own Rules and Regulations, name and own sources of income. b. There is no dereliction of duties on his part by merely not attending the special meeting, nor by walking out during meeting and even not by refusing to turn over the records as requested by Mr. Abad because: 1. He was not duly notified about the special meeting and besides he has the right not to attend a meeting. 2. He walked out of the meeting because he felt disgusted by the rather highhanded attitude of the management trustees. Besides trustee also has a right to walk out of any meeting, this has already done before by Mr. Abad. 3. He did not turnover the records for the reasons that he is still the administrator as stated in his previous memo response to Mr. Abad. Since Mr. Abad did not pursue the matter further, he concluded that he agreed to the contents of his letter. c. No libelous remarks was made. It is not true that he says “the management of RB is expert in distressing the RB”, what he said is that “the Management of the RB are not expert to run the Provident Fund, and it is a known fact that for the past 10 yrs. RB has been in distress, thus PF should not be controlled by Management”. The stenographic notes of the Board are not the exact account of what was said, it is not accurate since the one who made it is not a court stenographer. The investigation of charges was held, and meanwhile Mr. Luna was prevented from attending the regular meeting of the Provident Fund Board of Trustees. Investigating Committee submitted its report which became the basis of the BOD to dismiss Mr. Luna for cause effective upon receipt of clearance from Secretary of Labor. Secretary of Labor give clearance for the dismissal of Mr. Luna.

ISSUE: W/N the Republic Bank’s Management is guilty of unfair labor practice for the unjustified harassment and dismissal of Norberto Luna on account of his union activities

RULING: As the SC review the event prior to the ouster of Mr. Luna as branch manager of respondent bank and trustee those series of events unmistakably show that the Respondent Bank had wanted to do away with Luna even before the event of meeting where Mr. Luna and his colleague walked out. The angry reaction and statement Luna

made during that Board, became a convenient tool for the management to use it in its desire for Luna’s ouster- and its eventful control of the PF. The following circumstances is seen by the SC as basis that there is an unfair labor practice committed by RB’s Management against Mr. Luna. 1. There is nothing in the records to indicate that Luna has been changed as secretary; the minutes should have been signed by him before being officially released. Without such signature, no credibility or probative value could be accorded to such minutes; for the one who signed it Abad, is also the accuser of , and therefor biased against Luna. 2. As to the alleged derogatory remarks, out of 7 witnesses, only 3 testified as to the alleged derogatory statements. This is understandable considering those 3 are the accuser, successor and prime mover of Luna’s ouster. Also, had the alleged derogatory statements been substantially established, still the same would not justify Luna’s dismissal 3. Luna’s remark at the meeting of an official board are privileged in nature as a valid exercise of constitutional freedom of expression. His protest can also be treated as union activity by the Industrial Peace Act, which assures the employee’s right “to self-organization and to form, join or assist labor organizations of their own choosing and to engage in concerted activities for the purpose of collective bargaining and other mutual aid and protection. Luna was therefor acting out his role as protector of his constituents when he voiced out his apprehension and protests over the plan of management. It matters not than he acted singly or individually. What is important is that he had been selected by the supervisors of respondent bank to be their President and representative in the PF board of Trustees. His actuations as such should therefore be considered as legitimate exercise of the employee’s righ to selforganization and as an acitivity for their mutual aid and protection. 4. The other basis of dismissal- insubordination- appears to be likewise without jusfiable ground. Charge of subordination for failure to turn over the records of the PF is without justifiable ground where employee explained his posture and management failed to take it up through the grievance machinery under the CBA. 5. Management tried to maneuver employee’s ouster by the fact that the testimonies of witnesses- who were not given under oath- were taken without notice to Luna and without giving him a chance to cross-examine them. On the very day that report of investigating committee is made, BOD of Republic Bank immediately filed charges of suspensions and termination against Luna, were it not for the filing of Luna’s complaint, he could be boosted out of office without due process.

6. The fact that another employee-officer (eg. Canizares) of the Union were not dismissed even if they were guilty of substantially the same act of alleged insubordination, etc. as Luna, especially where latter appears to be more militant than the others constitute an unfair labor practice. Thus, Luna’s discharge is discriminatory and constituted an unfair labor practice.