Philippine Dairy Products Corporation v. Genilo
REITERATIONFacts
The Antecedents: Individual private respondents, members of the National Organization of Workingmen (NOWM), were laborers supplied to petitioners Philippine Dairy Products Corporation (PDPC) and San Miguel Corporation (SMC) by Skillpower Corporation and Lipercon Services Inc. based on contracts of services. Upon expiration of these contracts, petitioners denied them entry. NOWM and the individual respondents filed separate complaints for illegal dismissal. After consolidation and voluntary arbitration, Voluntary Arbitrator Tito F. Genilo declared the individual private respondents as regular employees of petitioners and ordered their reinstatement with backwages. An order for execution directed the regularization of all complainants, including those still working and those already terminated. Procedural History: Petitioners filed a petition for certiorari with injunction, contending that prior to reinstatement, private respondents should comply with requirements like NBI and police clearances and physical examinations, and that other workers not impleaded in the arbitration case should not be regularized. The Supreme Court dismissed for lack of merit, holding that regularization is a labor benefit applicable to all similarly situated employees and that the clearances and examinations sought were preconditions for reinstatement, not periodic requirements. Entry of judgment was made, and the case was remanded for execution. Private respondents filed a petition to execute the judgment. Petitioners failed to appear at hearings, and the Voluntary Arbitrator approved lists of employees to be reinstated and regularized. Petitioners filed a motion for reconsideration, alleging lack of due process due to non-notification of hearings and that the order was issued arbitrarily without determining if the listed employees were similarly situated. The Voluntary Arbitrator denied the motion, finding that notices were properly sent and that the Supreme Court's resolution applied to all qualified employees similarly situated. He also noted that positions were not abolished as new employees were hired and regularized. The order was modified to require a formal proceeding to determine the legitimacy of claims of "similarly situated" employees. Petitioners filed a manifestation claiming compliance, stating that 88 original complainants were regularized and paid, and that of 232 names in an amended complaint, 100 were regularized or in the process, 70 were part of the original complainants, and 49 could not be reinstated due to labor-saving devices but would be paid monetary benefits. A report computed backwages and wage differentials totaling P18,886,283.05. Petitioners objected to the computation. The Voluntary Arbitrator ordered a recomputation, which resulted in P1,638,324.95 for regularized employees and those terminated due to automation. The Voluntary Arbitrator then addressed two issues: (a) jurisdiction over claims of "similarly situated" individuals not impleaded, and (b) whether respondents could refuse reinstatement due to abolished positions from automation. The Voluntary Arbitrator ruled in favor of private respondent on the first issue, stating the Supreme Court's resolution extended to "similarly situated" employees. Regarding the second issue, he agreed with petitioners that reinstatement could be denied if positions were abolished due to automation, citing Section 4, Book VI of the Implementing Regulations of the Labor Code. He also noted that complainants had not shown proof of their ability to operate new machinery. An order directed petitioners to exert best efforts to find regular positions for workers under a special payroll and approved an agreement for "similarly situated" employees. Petitioners were directed to pay monetary entitlements. A subsequent agreement stipulated that nine employees under the special payroll would be processed for regularization by March 1, 1991, and the rest would be contractuals pending relocation. When this remained unfulfilled, the Voluntary Arbitrator ordered strict compliance. Petitioners later claimed partial compliance. The Voluntary Arbitrator then ordered the reinstatement of nine remaining complainants under the special payroll and those in Annexes 1 and 2, excluding those already regularized or who accepted separation pay. The Petition: Petitioners filed the instant petition charging the Voluntary Arbitrator with grave abuse of discretion for altering the November 12, 1990 Order, which they claimed had become final, and for reconsidering his earlier inhibition.
Issue(s)
Whether the Voluntary Arbitrator committed grave abuse of discretion in altering the November 12, 1990 Order which petitioners claim had become final. Whether the Voluntary Arbitrator committed grave abuse of discretion in reconsidering his earlier order of inhibition.
Ruling
The petition is DISMISSED. The Court found no grave abuse of discretion on the part of the Voluntary Arbitrator. The apparent alteration of the November 12, 1990 Order was justified by petitioners' failure to comply with its "best efforts" mandate, leading to subsequent agreements and orders that necessitated a more direct approach to ensure compliance. The reconsideration of the inhibition was based on an advisory and the fact that the Voluntary Arbitrator was merely implementing a Supreme Court resolution, not prejudging the case.
Ratio Decidendi
On the issue of altering a final order: The Court held that the Voluntary Arbitrator committed no grave abuse of discretion in issuing the March 17, 1992 Order. The apparent alteration of the November 12, 1990 Order was not whimsical but a necessary recourse after petitioners failed to fully comply with the "best efforts" formula. Petitioners' own subsequent agreement on February 8, 1991, which stipulated the regularization of nine employees and contractual status for others pending relocation, effectively altered the November 12, 1990 Order. The continued hiring of contractuals by petitioners, instead of regularizing the complainants, further necessitated the more direct order for reinstatement to ensure compliance with the original mandate. The Court emphasized that the Voluntary Arbitrator's actions were aimed at implementing the Supreme Court's August 30, 1989 Resolution, and his subsequent orders were a logical progression to achieve this goal given the parties' conduct. The argument that the November 12, 1990 Order had become final was deemed without merit as petitioners themselves had entered into agreements that modified it. On the issue of reconsidering inhibition: The Court found no grave abuse of discretion in the Voluntary Arbitrator's act of reconsidering his earlier inhibition. He acted upon an advisory from a higher official and because he was merely tasked with executing the Supreme Court's resolution, not with making a new determination of the case's merits. The assertion of bias was deemed unfounded, as his actions were consistently directed towards implementing the Court's mandate. The Court noted that the motion for inhibition was filed late in the proceedings, and the Voluntary Arbitrator's subsequent chastisement of the respondent union in a later order negated the charge of bias in favor of the complainants. Therefore, it was in the best interest of both parties for him to continue handling the case to its full execution.
Main Doctrine
The regularization of employees is a labor benefit that should apply to all qualified employees similarly situated and may not be denied merely because some employees were not parties to or were not impleaded in the voluntary arbitration case. Furthermore, the refusal to reinstate employees due to the abolition of their positions by reason of automation or labor-saving devices is permissible under law, provided that separation pay is given.