De La Salle University vs. De La Salle University Employees Association

An employer commits unfair labor practice when, during an intra-union dispute, it unilaterally withholds union dues and suspends normal relations with the incumbent union officers, because pending final resolution of the dispute, those officers remain duly authorized in a hold-over capacity and the employer is bound to comply with the terms of the existing collective bargaining agreement governing union dues and representation.

De La Salle University (DLSU) is the employer, and the De La Salle University Employees Association (DLSUEA-NAFTEU) is the exclusive bargaining agent of its rank-and-file employees. A collective bargaining agreement was executed between the parties on March 30, 2000. An intra-union dispute arose when a splinter group led by Belen Aliazas petitioned the DOLE for the conduct of union elections, alleging that no regular election had been held since 1985, while the incumbent officers claimed hold-over tenure approved by the general membership pending the conclusion of CBA negotiations. The tension between these two factions, and the regulatory interventions by the DOLE and the Bureau of Labor Relations, set the stage for the employer's challenged conduct.

In 2001, a splinter group of the De La Salle University Employees Association (DLSUEA-NAFTEU), led by Belen Aliazas, filed a petition with the Department of Labor and Employment (DOLE) for the conduct of union elections, alleging that the incumbent officers had failed to call a regular election since 1985. The incumbent officers disputed this, claiming that an election was conducted in 1987 and that, by virtue of Republic Act 6715, their term was extended to five years or until 1992, during which a general assembly affirmed their hold-over tenure until the termination of collective bargaining negotiations. A collective bargaining agreement was eventually executed on March 30, 2000.

Acting on the Aliazas group's petition, the DOLE-NCR held by Decision of March 19, 2001 that the holdover authority of the incumbent officers had been extinguished by the execution of the CBA, and ordered the conduct of elections under the supervision of its Labor Relations Division, subject to pre-election conferences. Notwithstanding these conditions, the incumbent officers called for a regular election on July 9, 2001, without prior notice to the DOLE and without pre-election conferences. The Aliazas group filed an urgent motion for intervention with the Bureau of Labor Relations, which granted the motion on July 6, 2001 and directed the cease and desist from holding the election until further ordered.

Thereafter, the Aliazas group wrote to the President of DLSU on August 7, 2001, requesting that the university place all union dues and agency fees in escrow pending the holding of a valid election. DLSU, through its Executive Vice President Dr. Carmelita I. Quebengco, responded by letter of August 16, 2001, citing the DOLE and BLR orders, and advised the union that it would establish a savings account for the union where all collected dues and fees would be deposited and held in trust, and that it would discontinue normal relations with any group within the union, including the incumbent officers, until the DOLE declared the validly elected officers. The university stated that this was the only way it could maintain neutrality in the intra-union dispute.

The union filed a complaint for unfair labor practice against DLSU, claiming that the university unduly interfered with its internal affairs and discriminated against its members. The complaint was docketed as NLRC-NCR Case No. S-30-08-03757-01. While the ULP complaint was pending, the union filed a Notice of Strike with the Office of the Secretary of Labor, charging gross violation of the CBA and bargaining in bad faith. The notice was certified for compulsory arbitration to the NLRC and raffled to the NLRC Third Division. The union then moved before the NLRC Third Division to have its ULP complaint — then pending appeal before the NLRC Second Division — and four other cases "subsumed" under the certified case. The NLRC Third Division granted the motion by Order of April 30, 2003.

Meanwhile, Labor Arbiter Felipe Pati dismissed the ULP complaint by Decision of July 12, 2002. The union appealed to the NLRC, and the appeal was lodged at the NLRC Second Division, which affirmed the dismissal by Decision of June 26, 2003 and denied reconsideration on September 30, 2003. DLSU elevated the NLRC Third Division's consolidation order to the Court of Appeals (CA-G.R. No. SP-79798), which was raffled to the CA Tenth Division. By Decision of June 17, 2004, the CA Tenth Division reversed the consolidation order insofar as it subsumed the ULP complaint, holding that the complaint had already been dismissed by the Labor Arbiter and was pending appeal before the NLRC Second Division when the consolidation order was issued. This decision became final on July 11, 2004. The union separately elevated the NLRC Second Division's affirmance of the ULP dismissal to the CA (CA-G.R. No. SP No. 81220), raffled to the CA First Division, which by Decision of September 16, 2005 set aside the NLRC Second Division's orders and directed the transmittal of the ULP records to the NLRC Third Division. DLSU filed the present petition for review on certiorari.

• Finality of the CA Tenth Division Decision: Petitioners contended that the CA First Division disregarded the ruling of the appellate court's Tenth Division, which had set aside the NLRC Third Division's order subsuming the ULP complaint under the certified case. They argued that when the NLRC Second Division rendered its June 26, 2003 resolution affirming the dismissal of the ULP complaint, the NLRC Third Division's consolidation order of April 30, 2003 had not yet attained finality.
• Failure to Take Cognizance: Petitioners faulted the CA First Division for not taking cognizance of the CA Tenth Division's June 17, 2004 decision annulling and setting aside the NLRC Third Division's consolidation order.
• Good Faith and Neutrality: Petitioners argued that the NLRC Second Division did not gravely abuse its discretion in holding that they were not guilty of unfair labor practice, considering that the temporary measures implemented by the university — placing union dues in escrow and discontinuing normal relations with the incumbent officers — were undertaken in good faith and only to maintain neutrality amid the intra-union dispute.

• Interference with Internal Affairs: Respondent claimed that petitioners unduly interfered with its internal affairs by unilaterally withholding union dues and agency fees and discontinuing normal relations with the incumbent set of officers.
• Discrimination Against Members: Respondent asserted that petitioners' acts discriminated against its members, constituting unfair labor practice.
• Grave Abuse of Discretion by NLRC Second Division: Respondent maintained that the NLRC Second Division committed grave abuse of discretion in ignoring the NLRC Third Division's order declaring the ULP complaint subsumed under the certified case.

• Finality and Transmittal of Records: Whether the CA First Division erred in ordering the NLRC Second Division to transmit the records of the ULP complaint to the NLRC Third Division, notwithstanding the finality of the CA Tenth Division's decision nullifying the consolidation order.
• Unfair Labor Practice: Whether petitioners committed unfair labor practice by placing union dues and agency fees in escrow and discontinuing normal relations with the incumbent union officers during the intra-union dispute.

• Finality and Transmittal of Records: Yes. The CA First Division's order directing the transmittal of the ULP records to the NLRC Third Division was rendered moot, the CA Tenth Division's decision nullifying the consolidation order having become final on July 11, 2004. To transmit the already-resolved ULP complaint to the NLRC Third Division would lead to absurd consequences.
• Unfair Labor Practice: Yes. Petitioners were found liable for unfair labor practice. Pending the final resolution of the intra-union dispute, the incumbent officers remained duly authorized in a hold-over capacity, and the existing CBA mandated compliance with its terms on union dues and representation.

• Finality and Transmittal of Records: The CA Tenth Division's June 17, 2004 decision annulling the NLRC Third Division's order subsuming the ULP complaint under the certified case became final and executory on July 11, 2004. The challenged CA First Division decision, promulgated on September 16, 2005, ordered the NLRC Second Division to transmit the ULP records to the NLRC Third Division — a directive that could no longer be effected because the CA Tenth Division had already ruled with finality that the ULP complaint could not be subsumed under the certified case. The ULP complaint had been dismissed by the Labor Arbiter and was pending appeal before the NLRC Second Division when the consolidation order was issued; the NLRC had already exhausted its jurisdiction over the ULP appeal. To still transmit the records to the NLRC Third Division would lead to absurd consequences, as the appellate court's Tenth Division ruling had conclusively settled that the ULP complaint was not properly before the NLRC Third Division.

• Unfair Labor Practice: Pending the final resolution of the intra-union dispute, the incumbent union officers remained duly authorized to conduct union affairs. The BLR Director's clarification letter of May 16, 2003 stated that there was no void in the DLSUEA leadership and that the incumbent officers continued in a hold-over capacity until their successors had been elected and qualified. At the time petitioners adopted their questioned measures, a valid and existing CBA had been entered between the parties, and it behooved petitioners to observe the terms and conditions thereof bearing on union dues and representation. A CBA entered into by a legitimate labor organization and an employer becomes the law between the parties, compliance with which is mandated by express policy of the law. Petitioners' unilateral withholding of union dues and suspension of normal relations with the incumbent officers constituted interference with the union's internal affairs and the employees' right to self-organization. As to damages, respondent prayed for exemplary, nominal, and attorney's fees. Exemplary damages were denied because respondent failed to show proof of entitlement to moral, temperate, or compensatory damages. Nominal damages were awarded under Article 2221 of the Civil Code to vindicate the violated right, and attorney's fees under Article 2208(2) because respondent was compelled to litigate to protect its interest.

• Hold-over capacity of union officers — When the terms of office of duly elected union officers expire and no successors have been elected and qualified, the incumbent officers continue in a hold-over capacity and remain duly authorized to conduct union affairs. The Court relied on the BLR Director's clarification that the DOLE-NCR decision calling for elections did not automatically terminate the incumbent officers' tenure; they continued to enjoy the rights and privileges of their positions until their successors were elected and qualified. An employer cannot unilaterally treat the union leadership as vacant and withhold remittances based on its own assessment of the intra-union dispute.

• CBA as law between the parties — A collective bargaining agreement entered into by a legitimate labor organization and an employer becomes the law between the parties, compliance with which is mandated by express policy of the law. The Court applied this doctrine to hold that DLSU was bound to observe the CBA's terms bearing on union dues and representation, and could not unilaterally deviate from those terms by placing dues in escrow, even if it claimed to act in good faith and neutrality.

• Employer interference as unfair labor practice — An employer's unilateral act of withholding union dues and suspending normal relations with the incumbent union officers during an intra-union dispute constitutes interference with the employees' right to self-organization and amounts to unfair labor practice, regardless of the employer's professed motive of maintaining neutrality.

• "To still transmit to the NLRC Third Division respondent's ULP complaint on appeal which has already been resolved by the NLRC Second Division would lead to absurd consequences." — This passage states the ratio decidendi on the transmittal issue: the finality of the CA Tenth Division's nullification of the consolidation order precluded any further transmittal of the ULP records to the NLRC Third Division.

• "Pending the final resolution of the intra-union dispute, respondent's officers remained duly authorized to conduct union affairs." — This sentence articulates the controlling principle on hold-over capacity, establishing that the incumbent officers retained authority notwithstanding the DOLE-NCR's call for new elections, and that the employer could not unilaterally treat the leadership as vacant.

• "It is axiomatic in labor relations that a CBA entered into by a legitimate labor organization and an employer becomes the law between the parties, compliance with which is mandated by express policy of the law." — This formulation of the CBA-as-law doctrine was the basis for holding that DLSU's unilateral deviation from the CBA's check-off provisions constituted unfair labor practice.

• TSPIC Corporation vs. TSPIC Employees Union (FFW), G.R. No. 163419, February 13, 2008 — Followed for the proposition that a CBA becomes the law between the parties and compliance is mandated by express policy of the law. The Court cited this case (which in turn cited Honda Phils. Inc. vs. Samahan ng Malayang Manggagawa sa Honda) to support its holding that DLSU was bound to observe the CBA's terms on union dues and representation.

• Article 2221, Civil Code — Defines nominal damages as adjudicated to vindicate or recognize a right of the plaintiff that has been violated or invaded by the defendant, not for indemnifying any loss. Applied to award nominal damages of ₱250,000 to respondent for the violation of its right to self-organization.

• Article 2208(2), Civil Code — Authorizes the award of attorney's fees when the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. Applied to award attorney's fees of ₱50,000 to respondent.

• Article 248(a), Labor Code — Defines unfair labor practice for employers, specifically interference with, restraint, or coercion of employees in the exercise of their right to self-organization. Referenced in the dissenting opinion's discussion of the ULP charge's statutory basis.

Leonardo A. Quisumbing (Chairman), Dante O. Tinga, Presbitero J. Velasco, Jr., and Arturo D. Brion. Justice Brion concurred with the ponencia's nullification of the CA First Division's transmittal order but dissented on the finding of unfair labor practice.

• Arturo D. Brion — Justice Brion concurred with the ponencia on the transmittal issue, separately reasoning that the NLRC divisions are co-equal bodies and one division cannot order another with binding effect, and that only the Secretary of Labor — not the NLRC or any of its divisions — has the power to certify cases for compulsory arbitration and to order consolidation. He dissented on the ULP finding for two reasons. First, on procedural and jurisdictional grounds, he argued that the sole issue before the Court was the legal correctness of the CA First Division's ruling on transmittal; the merits of the ULP charge were never ruled upon by the CA First Division and the NLRC Second Division's affirmance of the dismissal had long lapsed into finality, so the Court acted outside its jurisdiction in ruling on the ULP merits. Second, on the substantive merits, he argued that DLSU's escrow arrangement was undertaken in good faith, without anti-union animus, and in response to a legitimate request from the Aliazas group; that the act preserved the integrity of union funds pending resolution of the leadership dispute; that the employer's management prerogative to maintain stable school operations must be balanced against labor-law constraints; and that the BLR Director's clarification letter could not authoritatively resolve a matter already being arbitrated before the NLRC. He voted to grant the petition in full.