Wise and Co., Inc. v. Wise & Co., Inc. Employees Union-National Association of Trade Unions
REITERATIONFacts
The Antecedents: Petitioner, Wise & Co., Inc., issued a memorandum circular on April 3, 1987, introducing a profit sharing scheme for its managers and supervisors, with initial distribution set for March 31, 1988. The respondent union, Wise & Co., Inc. Employees Union-NATU, requested participation in this scheme on July 3, 1987, but was denied by petitioner, citing adherence to the Collective Bargaining Agreement (CBA). Negotiations for an early renewal of the CBA, due to expire on April 30, 1988, were ongoing. Petitioner proposed on November 11, 1987, to consider including CBA-covered employees in the profit sharing scheme starting 1987, contingent on the conclusion of negotiations before December 1987. However, the negotiations reached a deadlock over the scope of the bargaining unit, and conciliation efforts on March 29, 1988, failed. On March 30, 1988, petitioner distributed profit sharing benefits not only to managers and supervisors but also to all other rank-and-file employees not covered by the CBA. This led the respondent union to file a notice of strike, alleging unfair labor practice due to discrimination in the grant of benefits. Petitioner refused to continue CBA negotiations until the strike notice was resolved. The union agreed to postpone discussions on profit sharing until a new CBA was concluded. Following conciliation, the parties agreed to voluntary arbitration. Procedural History: On March 20, 1989, the voluntary arbitrator issued an award ordering petitioner to extend the 1987 profit sharing scheme benefits to the members of the respondent union. The Petition: Petitioner filed a petition for certiorari, alleging grave abuse of discretion by the voluntary arbitrator in ordering the extension of profit sharing benefits to CBA-covered employees, arguing that discrimination per se is not unlawful when employees are not similarly situated, that CBA terms are binding, and that the union's negotiation for inclusion implied they were not entitled to it in 1987. Petitioner also alleged the arbitrator made a baseless conclusion that petitioner was motivated to defeat employee rights.
Issue(s)
Whether the grant of profit sharing benefits by management to non-union member employees is discriminatory against union member employees. Whether the petitioner was motivated by a desire to defeat or prejudice the basic rights of its employees. Whether the Voluntary Arbitrator acted with grave abuse of discretion amounting to lack or excess of jurisdiction in ordering the extension of profit sharing benefits to employees covered by the CBA.
Ruling
The petition is granted. The award of the respondent Voluntary Arbitrator dated March 20, 1989, is reversed and set aside, being null and void.
Ratio Decidendi
On the issue of discrimination and management prerogative: The Court held that the grant of profit sharing benefits to employees outside the "bargaining unit" falls under management prerogative. The CBA in force from May 1, 1985, to April 30, 1988, defined the bargaining unit as "all regular or permanent employees, below the rank of assistant supervisor," with specific exclusions for certain rank-and-file employees in administrative offices. The profit sharing privilege was extended to these excluded employees who were not covered by the CBA and did not derive benefits from it. Therefore, there was no discrimination because the union employees and non-union employees were not similarly situated. Discrimination per se is not unlawful when the employees concerned are not similarly situated. The Court reiterated that labor law does not authorize interference with the employer's conduct of business, provided management prerogative is exercised in good faith, for the employer's interest, and not for the purpose of defeating or circumventing employee rights under special laws or agreements, nor exercised maliciously, harshly, oppressively, vindictively, or out of malice or spite. The grant of benefits to employees outside the bargaining unit was deemed done in good faith and without ulterior motive, especially given the CBA's classification of employees. On the motive of the petitioner: The Court found no basis in the record for the respondent union's contention that the grant of benefits was intended to discourage non-union employees from joining the union. Petitioner denied this, pointing out that some non-union workers joined the union despite receiving the benefit. The Court also noted that while petitioner had agreed to consider including its members in the profit sharing scheme provided negotiations for CBA renewal were concluded earlier, a deadlock occurred, and the expected resolution period passed. Consequently, petitioner could not be held to have a duty to extend the benefit to union members under those circumstances. On the Voluntary Arbitrator's award: The Court found that the Voluntary Arbitrator acted with grave abuse of discretion. The arbitrator's order to extend the profit sharing benefits to union members was deemed baseless because the non-union employees receiving the benefit were not similarly situated to the union members, and the grant was a valid exercise of management prerogative. The terms of the CBA, which constitute the law between the parties, did not entitle union members to this specific profit sharing benefit in 1987. The union's act of negotiating for its inclusion in the CBA was considered an implied admission that they were not entitled to it as a matter of right in 1987.
Main Doctrine
The grant of profit sharing benefits to employees not covered by a Collective Bargaining Agreement (CBA) does not constitute discrimination against union members covered by the CBA, provided such grant is exercised in good faith and within the bounds of management prerogative, especially when the CBA itself classifies employees and delineates benefits.