Case Digest: Bankard v. Buenconsejo

G.R. No. 171664 : March 6, 2013




On June 26, 2000, respondent Bankard Employees Union-AWATU (Union) filed before the National Conciliation and Mediation Board (NCMB) its first Notice of Strike (NOS) alleging commission of unfair labor practices by petitioner Bankard, Inc. (Bankard), to wit: 1) job contractualization; 2) outsourcing/contracting-out jobs; 3) manpower rationalizing program; and 4) discrimination.

On July 3, 2000, the initial conference was held where the Union clarified the issues cited in the NOS. On July 5, 2000, the Union held its strike vote balloting where the members voted in favor of a strike. On July 10, 2000, Bankard asked the Office of the Secretary of Labor to assume jurisdiction over the labor dispute or to certify the same to the NLRC for compulsory arbitration. On July 12, 2000, Secretary Bienvenido Laguesma (Labor Secretary) of the Department of Labor and Employment (DOLE) issued the order certifying the labor dispute to the NLRC.

On July 25, 2000, the Union declared a CBA bargaining deadlock.

The following day, the Union filed its second NOS, alleging bargaining in bad faith on the part of Bankard. Bankard then again asked the Office of the Secretary of Labor to assume jurisdiction, which was granted. Thus, the Order, dated August 9, 2000, certifying the labor dispute to the NLRC, was issued.

The Union, despite the two certification orders issued by the Labor Secretary enjoining them from conducting a strike or lockout and from committing any act that would exacerbate the situation, went on strike.

During the conciliatory conferences, the parties failed to amicably settle their dispute. Consequently, they were asked to submit their respective position papers.

On May 31, 2001, the NLRC issued its Resolution declaring that the management committed acts considered as unfair labor practice (ULP) under Article 248(c) of the Labor Code.

Unsatisfied, both parties filed their respective motions for partial reconsideration. Bankard assailed the NLRC's finding of acts of ULP on its part. The Union, on the other hand, assailed the NLRC ruling on the issue of bad faith bargaining. The NLRC denied both for lack of merit.

On December 28, 2001, Bankard filed a petition for certiorari under Rule 65 with the CA arguing that the NLRC gravely abused its discretion amounting to lack or excess of jurisdiction. The CA dismissed the petition, finding that the NLRC ruling was supported by substantial evidence. Aggrieved, Bankard filed a motion for reconsideration. The CA subsequently denied it for being a mere repetition of the grounds previously raised. Hence, the present petition.

ISSUE: Whether the CA erred in finding that petitioner Bankard, Inc. committed acts of unfair labor practice

HELD: The Court finds merit in the petition.


Well-settled is the rule that factual findings of labor officials, who are deemed to have acquired expertise in matters within their jurisdiction, are generally accorded not only respect but even finality by the courts when supported by substantial evidence. Furthermore, the factual findings of the NLRC, when affirmed by the CA, are generally conclusive on this Court. When the petitioner, however, persuasively alleges that there is insufficient or insubstantial evidence on record to support the factual findings of the tribunal or court a quo, then the Court, exceptionally, may review factual issues raised in a petition under Rule 45 in the exercise of its discretionary appellate jurisdiction.


This case involves determination of whether or not Bankard committed acts considered as ULP. The underlying concept of ULP is found in Article 247 of the Labor Code, to wit:

Article 247. Concept of unfair labor practice and procedure for prosecution thereof. --Unfair labor practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations.

The Court has ruled that the prohibited acts considered as ULP relate to the workers right to self-organization and to the observance of a CBA. It refers to acts that violate the workers right to organize. Without that element, the acts, even if unfair, are not ULP. Thus, an employer may only be held liable for unfair labor practice if it can be shown that his acts affect in whatever manner the right of his employees to self-organize.

In this case, the Union claims that Bankard, in implementing its MRP which eventually reduced the number of employees, clearly violated Article 248(c) of the Labor Code which states that:
Art. 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor practice:
x x x x
(c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;
x x x x
Because of said reduction, Bankard subsequently contracted out the jobs held by former employees to other contractual employees. The Union specifically alleges that there were other departments in Bankard, Inc. which utilized messengers to perform work load considered for regular employees like the Marketing Department, Voice Authorizational Department, Computer Services Department, and Records Retention Department. As a result, the number of union members was reduced, and the number of contractual employees, who were never eligible for union membership for lack of qualification, increased.


The general principle is that the one who makes an allegation has the burden of proving it. While there are exceptions to this general rule, in ULP cases, the alleging party has the burden of proving the ULP; and in order to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the claim. Such principle finds justification in the fact that ULP is punishable with both civil and/or criminal sanctions.

Aside from the bare allegations of the Union, nothing in the records strongly proves that Bankard intended its program, the MRP, as a tool to drastically and deliberately reduce union membership. Contrary to the findings and conclusions of both the NLRC and the CA, there was no proof that the program was meant to encourage the employees to disassociate themselves from the Union or to restrain them from joining any union or organization. There was no showing that it was intentionally implemented to stunt the growth of the Union or that Bankard discriminated, or in any way singled out the union members who had availed of the retirement package under the MRP. True, the program might have affected the number of union membership because of the employees voluntary resignation and availment of the package, but it does not necessarily follow that Bankard indeed purposely sought such result. It must be recalled that the MRP was implemented as a valid cost-cutting measure, well within the ambit of the so-called management prerogatives. Bankard contracted an independent agency to meet business exigencies. In the absence of any showing that Bankard was motivated by ill will, bad faith or malice, or that it was aimed at interfering with its employees right to self-organize, it cannot be said to have committed an act of unfair labor practice.


Substantial evidence is more than a mere scintilla of evidence. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable might conceivably opine otherwise. Unfortunately, the Union, which had the burden of adducing substantial evidence to support its allegations of ULP, failed to discharge such burden.


The employers right to conduct the affairs of its business, according to its own discretion and judgment, is well-recognized. Management has a wide latitude to conduct its own affairs in accordance with the necessities of its business. As the Court once said:

The Court has always respected a company's exercise of its prerogative to devise means to improve its operations. Thus, we have held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of employees, working methods, time, place and manner of work.

This is so because the law on unfair labor practices is not intended to deprive employers of their fundamental right to prescribe and enforce such rules as they honestly believe to be necessary to the proper, productive and profitable operation of their business.

Contracting out of services is an exercise of business judgment or management prerogative. Absent any proof that management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer. Furthermore, bear in mind that ULP is punishable with both civil and/or criminal sanctions. As such, the party so alleging must necessarily prove it by substantial evidence. The Union, as earlier noted, failed to do this. Bankard merely validly exercised its management prerogative. Not shown to have acted maliciously or arbitrarily, no act of ULP can be imputed against it.