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”.

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:

Whether or not 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.
PHILIPPINE PHOSPHATE FERTILIZER CORPORATION, petitioner, vs. HON. RUBEN D. TORRES, Secretary of Labor
and Employment, HON. RODOLFO S. MILADO, Department of Labor and Employment Mediator-Arbiter for
Region VIII, Tacloban, City, and PHILPHOS MOVEMENT FOR PROGRESS, INC. (PMPI), respondents.

Facts:

Respondent, PHILPHOS Movement for Progress, Inc. (PMPI), filed with the Department of Labor and
Employment a petition for certification election among the supervisory employees of petitioner, alleging that as a
supervisory union duly registered with the Department of Labor and Employment it was seeking to represent the
supervisory employees of Philippine Phosphate Fertilizer Corporation. It was not opposed by petitioner, PHILPHOS,
but submitted a position paper with the Mediator-Arbiter stating that its management welcomed the creation of
supervisory employees union provide the necessary requisites of law were properly observed and prayed for the
exclusion of its superintendents and professional/technical employees from the PMPI supervisory union.

Respondent, Mediator-Arbiter Rodolfo S. Milado issued an order directing the holding of a certification
election among the supervisory employees of petitioner, excluding therefrom the superintendents and the
professional and technical employees. PMPI then filed an amended petition with the Mediator-Arbiter wherein it
sought to represent not only the supervisory employees of petitioner but also its professional/technical and
confidential employees.

The parties therein agreed to submit their respective position papers and to consider the amended
petition submitted for decision on the basis thereof and related documents. MediatorArbiter Milado issued an
order granting the petition and directing the holding of a certification election among the supervisory,
professional, technical, and confidential employees. PHILPHOS appealed the order to the Secretary of Labor and
Employment who rendered a decision through Undersecretary Bienvenido Laguesma dismissing the appeal.
PHILPHOS moved for reconsideration but the same was denied. Hence, this petition.

Issue:

Whether or not that PHILPHOS was denied due process in the proceedings before respondent Mediator-
Arbiter.

Ruling:

The Supreme Court ruled that there was no denial of due process. The essence of due process is simply an
opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain one's side or an
opportunity to seek a reconsideration of the action or ruling complained of. Where, as in the instant case,
petitioner PHILPHOS agreed to file its position paper with the Mediator-Arbiter and to consider the case submitted
for decision on the basis of the position papers filed by the parties, there was sufficient compliance with the
requirement of due process, as petitioner was afforded reasonable opportunity to present its side. Moreover,
petitioner could have, if it so desired, insisted on a hearing to confront and examine the witnesses of the other
party. But it did not, instead, it opted to submit its position paper with the Mediator-Arbiter. Besides, petitioner
had all the opportunity to ventilate its arguments in its appeal to the Secretary of Labor.