Case Digest: Fulache, et al. v. ABS-CBN

G.R. No. 183810: January 21, 2010




The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File Employees Union executed a collective bargaining agreement (CBA) effective December 11, 1999 to December 10, 2002. When they obtained copies of the agreement, they learned that they had been excluded from its coverage as ABS-CBN considered them temporary and not regular employees, in violation of the Labor Code. They claimed they had already rendered more than a year of service in the company and, therefore, should have been recognized as regular employees entitled to security of tenure and to the privileges and benefits enjoyed by regular employees. They asked that they be paid overtime, night shift differential, holiday, rest day and service incentive leave pay. They also prayed for an award of moral damages and attorneys fees.

Labor Arbiter Rendoque rendered his decisionholding that the petitioners were regular employees of ABS-CBN, not independent contractors, and are entitled to the benefits and privileges of regular employees.

While the appeal before the NLRC was pending, ABS-CBN dismissed Fulache, Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of employment with service contractor Able Services. The four drivers and Atinen responded by filing a complaint for illegal dismissal (illegal dismissal case). In defense, ABS-CBN alleged that even before the labor arbiter rendered his decision of January 17, 2002 in the regularization case, it had already undertaken a comprehensive review of its existing organizational structure to address its operational requirements.

In her April 21, 2003 decision in the illegal dismissal case,Labor Arbiter Rendoque upheld the validity of ABS-CBN's contracting out of certain work or services in its operations. The labor arbiter found that petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been dismissed due to redundancy, an authorized cause under the law.

The NLRC reversed the labor arbiters ruling in the illegal dismissal case; it found that petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed and awarded them backwages and separation pay in lieu of reinstatement. The petitioners moved for reconsideration, contending that Fulache, Jabonero, Castillo and Lagunzad are entitled to reinstatement and full backwages, salary increases and other CBA benefits as well as 13th month pay, cash conversion of sick and vacation leaves, medical and dental allowances, educational benefits and service awards.

ABS-CBN likewise moved for the reconsideration of the decision, reiterating that Fulache, Jabonero, Castillo and Lagunzad were independent contractors. The NLRC stood by the ruling that the petitioners were regular employees entitled to the benefits and privileges of regular employees. On the illegal dismissal case, the petitioners, while recognized as regular employees, were declared dismissed due to redundancy.

Petitioners filed a petition for certiorari before the CA, contending that the NLRC committed grave abuse of discretion in denying them benefits under the CBA. The CA ruled that the petitioners failed to prove their claim to CBA benefits since they never raised the issue in the compulsory arbitration proceedings, and did not appeal the labor arbiters decision which was silent on their entitlement to CBA benefits. On the illegal dismissal issue, the CA upheld the NLRC decision holding that Fulache, Jabonero, Castillo and Lagunzad were not illegally dismissed as their separation from the service was due to redundancy.

The petitioners moved for reconsideration, but the CA denied the motion in a resolution promulgated on July 8, 2008. Hence, the present petition.

Whether or not petitioners are entitled to CBA benefits

Whether or petitioners were illegally dismissed


As regular employees, the petitioners fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract

The LA decision which was affirmed by the NLRC and the CA, finding petitioners to be regular employees and not independent contractors. This declaration unequivocally settled the petitioners employment status: they are ABS-CBNs regular employees entitled to the benefits and privileges of regular employees. These benefits and privileges arise from entitlements under the law (specifically, the Labor Code and its related laws), and from their employment contract as regular ABS-CBN employees, part of which is the CBA if they fall within the coverage of this agreement.

Under these terms, the petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most importantly, the labor arbiters decision of January 17, 2002 affirmed all the way up to the CA level ruled against ABS-CBNs submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBAs express terms and are entitled to its benefits.


The termination of employment of the four drivers occurred under highly questionable circumstances and with plain and unadulterated bad faith.

The records show that the regularization case was in fact the root of the resulting bad faith as this case gave rise and led to the dismissal case.First, the regularization case was filed leading to the labor arbiters decision declaring the petitioners, including Fulache, Jabonero, Castillo and Lagunzad, to be regular employees. ABS-CBN appealed the decision and maintained its position that the petitioners were independent contractors.

In the course of this appeal, ABS-CBN took matters into its own hands and terminated the petitioners services, clearly disregarding its own appeal then pending with the NLRC. Notably, this appeal posited that the petitioners were not employees. To justify the termination of service, the company cited redundancy as its authorized cause but offered no justificatory supporting evidence. It merely claimed that it was contracting out the petitioners activities in the exercise of its management prerogative.

By doing all these, ABS-CBN forgot labor law and its realities.

It forgot that by claiming redundancy as authorized cause for dismissal, it impliedly admitted that the petitioners were regular employees whose services, by law, can only be terminated for the just and authorized causes defined under the Labor Code.

Likewise ABS-CBN forgot that it had an existing CBA with a union, which agreement must be respected in any move affecting the security of tenure of affected employees; otherwise, it ran the risk of committing unfair labor practice both a criminal and an administrative offense. It similarly forgot that an exercise of management prerogative can be valid only if it is undertaken in good faith and with no intent to defeat or circumvent the rights of its employees under the laws or under valid agreements.

Lastly, it forgot that there was a standing labor arbiters decision that, while not yet final because of its own pending appeal, cannot simply be disregarded. By implementing the dismissal action at the time the labor arbiters ruling was under review, the company unilaterally negated the effects of the labor arbiters ruling while at the same time appealing the same ruling to the NLRC. This unilateral move is a direct affront to the NLRCs authority and an abuse of the appeal process.

All these go to show that ABS-CBN acted with patent bad faith.