Ramirez vs. Polyson Industries, Inc.

Union officers who instigate a slowdown by inducing or threatening co-employees not to render overtime work, thereby willfully reducing output to compel management to grant their demands, are guilty of an illegal concerted activity constituting a just cause for dismissal, provided the employer complies with the twin-notice requirement of procedural due process.

Respondent Polyson Industries, Inc. is a domestic corporation engaged in manufacturing plastic bags for supermarkets and department stores. Petitioners Errol Ramirez, Julito Apas, Ricky Roselo, and Esteban Mission, Jr. were employees of Polyson and officers of Obrero Pilipino (Obrero), the union of the company's rank-and-file employees. A labor dispute arose between the parties after Obrero sought voluntary recognition as the exclusive bargaining agent, which management refused, opting instead for a certification election. The dispute was certified by the Secretary of Labor and Employment to the NLRC for compulsory arbitration pursuant to Article 263(g) of the Labor Code.

Polyson Industries, Inc. is a domestic corporation primarily engaged in manufacturing plastic bags for supermarkets, department stores, and similar establishments. Petitioners Errol Ramirez, Julito Apas, Ricky Roselo, and Esteban Mission, Jr. were employees of Polyson and officers of Obrero Pilipino, the union representing the company's rank-and-file employees.

On April 28, 2011, Polyson received a notice of hearing from the DOLE regarding Obrero's petition for certification election. On May 31, 2011, Polyson's management met with Obrero's officers, led by union president Ramirez. Obrero asked that it be voluntarily recognized as the exclusive bargaining agent of the rank-and-file employees, but Polyson refused and opted for a certification election. Furious at the refusal, the Obrero officers threatened management that the union would show its collective strength in the coming days.

On June 7, 2011, Polyson received a rush order from a client for the production of 100,000 pieces of plastic bags. Management informed the Cutting Section operators that overtime work would be needed. Consistent with company practice, those willing to work overtime were expected to sign a "time sheet." When supervisors approached the operators, the latter stated they could not work overtime due to other commitments. The supervisors then requested that the operators set aside time the following day. On June 8, 2011, five operators indicated their desire to work overtime; however, after their regular shift, three of the five did not render overtime, resulting in delay and eventual cancellation of the client's order. When management asked the workers who had initially volunteered to explain their failure, two of them — Leuland Visca and Samuel Tuting — gave the same reason: "Ayaw nila/ng iba na mag-OT [overtime] ako."

Management conducted an investigation and hearing on June 9, 2011, where Visca affirmed that petitioners had pressured him to desist from rendering overtime work. On the same date, Tuting executed a written statement claiming that petitioners induced or threatened them not to work overtime. An Incident Report dated June 10, 2011 recounted that when respondent Wilson Yu inquired about the non-rendering of overtime, petitioner Ramirez retorted: "[DI BA] SABI NINYO EIGHT (8) HOURS LANG KAMI. EH DI EIGHT (8) NA LANG. KUNG MAG[-]OOVERTIME KAMI DAPAT LAHAT MAY OVERTIME. AYAW KO MAGKAWATAK WATAK ANG MGA TAO KO." Management then issued notices to petitioners requiring them to explain why no disciplinary action should be taken. Petitioners submitted written explanations denying liability. After evaluation, management terminated petitioners' employment on the ground that they instigated an illegal concerted activity resulting in company losses of ₱290,000.

Petitioners denied the allegations, contending they were terminated not for inducing co-employees but for establishing a union seeking exclusive bargaining status, that their dismissal violated substantive and procedural due process, and that Polyson committed unfair labor practice. On June 29, 2011, Obrero filed a Notice of Strike with the NCMB. On July 21, 2011, the DOLE Secretary certified the dispute to the NLRC for compulsory arbitration, directing the parties to maintain the status quo under Article 263(g) of the Labor Code.

• Grave Abuse of Discretion: Petitioner argued that the Court of Appeals committed grave abuse of discretion in rendering the assailed decisions.
• Misappreciation of Facts: Petitioner maintained that the Court of Appeals misappreciated the actual facts, necessitating review and vacation of the assailed decisions.
• Denial of Liability: Petitioner contended that they were terminated not because they induced or threatened co-employees not to render overtime work, but because they established a union seeking to become the exclusive bargaining agent of the rank-and-file employees.
• Violation of Due Process: Petitioner argued that their termination was undertaken without affording them substantive and procedural due process.
• Unfair Labor Practice: Petitioner asserted that Polyson is guilty of unfair labor practice.
• Credibility of Witnesses: Petitioner questioned the credibility of Tuting and Visca's claims, contending that these are self-serving and were merely used by management to manufacture evidence against them.
• No Illegal Concerted Activity: Petitioner argued they are not guilty of "illegal concerted activity" because the term contemplates "careful planning of a considerable number of participants to insure that the desired result is attained."

• Validity of Dismissal: Whether petitioners' dismissal from employment was valid.
• Substantive Due Process: Whether petitioners are guilty of an illegal act constituting a valid ground for termination.
• Procedural Due Process: Whether Polyson complied with the procedural due process requirements in terminating petitioners.

• Validity of Dismissal: Yes. Petitioners' dismissal was valid, having been effected for a just cause — instigation of an illegal slowdown — and in compliance with procedural due process.
• Substantive Due Process: Yes. Petitioners were guilty of instigating a slowdown, an inherently illicit concerted activity, by inducing or threatening co-employees not to render overtime work, resulting in losses to the company.
• Procedural Due Process: Yes. Polyson complied with the twin-notice requirement and afforded petitioners an opportunity to be heard through the administrative hearing and the submission of written explanations.

• Validity of Dismissal: The employer bears the burden of proving with clear, accurate, consistent, and convincing evidence the validity of the dismissal. Both the substantive aspect (valid cause) and the procedural aspect (manner of dismissal) must be satisfied. The NLRC found, and the CA affirmed, that the evidence on record established petitioners' guilt. The Court found no cogent reason to depart from these factual findings, as petitioners failed to show that the NLRC's findings were arbitrary or bereft of rational basis. The findings that petitioners instigated the slowdown on June 8, 2011 are reinforced by substantial evidence.

• Substantive Due Process: A slowdown is defined as a "strike on the installment plan" — a willful reduction in the rate of work by concerted action for the purpose of restricting the employer's output, an activity inherently condemned as illicit and unjustifiable because employees continue working and accepting wages while selectively refusing tasks to the employer's damage. Petitioners engaged in a slowdown when they induced two co-workers to quit scheduled overtime work, accomplishing their purpose when the slowdown resulted in delay and restriction of output. Petitioners' contention that "illegal concerted activity" requires careful planning and a large number of participants was rejected; the essence of a slowdown lies in the willful reduction of work output, not in the number of participants. The affirmative assertions of unbiased witnesses Visca and Tuting, who identified petitioners as those who pressured them, prevailed over petitioners' mere denials. Absent evidence of ulterior motive to fabricate, the witnesses' testimony was accorded full faith and credit. The Incident Report further confirmed that Ramirez was aware of and responsible for the overtime boycott. Under Article 264(a) of the Labor Code, union officers who knowingly participate in illegal acts during a strike may be declared to have lost their employment status. Union officers have a greater responsibility than members, being duty-bound to guide members to respect the law; urging members to violate the law warrants dismissal as a just penalty.

• Procedural Due Process: Procedural due process in termination proceedings consists of the twin requirements of notice and hearing. The employer must furnish two written notices: the first apprising the employee of the particular acts or omissions for which dismissal is sought, and the second informing the employee of the decision to dismiss. The hearing requirement is satisfied by the opportunity to be heard, not necessarily an actual hearing. Polyson established compliance: it issued notices to petitioners requiring explanations, conducted an administrative hearing on June 9, 2011 where petitioners were confronted with the charges, received petitioners' written explanations, and thereafter issued notices of termination. These requirements were sufficiently met.

• Twin-Notice Requirement in Termination — In termination proceedings, the employer must furnish the employee with two written notices: (1) the first apprises the employee of the particular acts or omissions for which dismissal is sought; and (2) the second informs the employee of the employer's decision to dismiss. The hearing requirement is satisfied as long as there was an opportunity to be heard, not necessarily that an actual hearing was conducted. The Court applied this doctrine by finding that Polyson sufficiently complied with both notices and afforded petitioners an opportunity to be heard through the administrative hearing and submission of written explanations.

• Slowdown as an Illegal Concerted Activity — A slowdown is a "strike on the installment plan," defined as a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer. It is inherently and essentially illicit because employees continue to work and accept wages while selectively refusing tasks to the employer's damage — they "work on their own terms." The Court applied this doctrine by holding that petitioners' act of inducing two co-employees to abstain from overtime work, resulting in delay and cancellation of a client's order, constituted a slowdown.

• Burden of Proof on Employer in Dismissal Cases — The employer has the onus of proving with clear, accurate, consistent, and convincing evidence the validity of the dismissal. The Court found that Polyson discharged this burden through the testimony of Visca and Tuting, the Cutting Section Overtime Sheet, the Administrative Hearing record, and the Incident Report.

• Union Officers' Duty to Guide Members — Union officers are duty-bound to guide their members to respect the law. If officers urge members to violate the law and defy duly-constituted authorities, dismissal is a just penalty. Their responsibility is greater than that of ordinary members. The Court applied this principle to uphold the dismissal of petitioners as union officers who instigated the illegal slowdown.

• No Fixed Number Required for Concerted Activity — Nothing in the law requires that a slowdown be carefully planned or participated in by a large number of workers. The essence lies in the willful reduction of work output to restrict or delay production. There is no fundamental difference in principle whether one or more persons cease work, and no fixed number of employees is necessary to constitute a strike or slowdown.

• "a 'strike on the installment plan;' as a willful reduction in the rate of work by concerted action of workers for the purpose of restricting the output of the employer, in relation to a labor dispute; as an activity by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands." — This passage provides the canonical definition of a slowdown, which the Court adopted and applied to characterize petitioners' conduct as an illegal concerted activity.

• "such a slowdown is generally condemned as inherently illicit and unjustifiable, because while the employees 'continue to work and remain at their positions and accept the wages paid to them,' they at the same time 'select what part of their allotted tasks they care to perform of their own volition or refuse openly or secretly, to the employer's damage, to do other work;' in other words, they 'work on their own terms." — This articulates the rationale for condemning slowdowns as illegal, distinguishing them from lawful strikes by highlighting the employees' continued acceptance of wages while deliberately restricting output.

• "union officers are duty-bound to guide their members to respect the law. Contrarily, if the officers urge the members to violate the law and defy the duly-constituted authorities, their dismissal from the service is a just penalty or sanction for their unlawful acts." — This states the heightened responsibility of union officers and the justification for imposing the penalty of dismissal on those who lead members into illegal activities.

• King of Kings Transport, Inc. vs. Mamac, 553 Phil. 108 (2007) — Cited for the principle that due process under the Labor Code involves two aspects: substantive (valid and authorized causes) and procedural (manner of dismissal).
• Aliling vs. Feliciano, 686 Phil. 889 (2012) — Cited for the complementary principle that the employer bears the onus of proving the validity of dismissal with clear, accurate, consistent, and convincing evidence.
• Toyota Motors Phil. Corp. Workers Association (TMPCWA) vs. NLRC, 562 Phil. 759 (2007) — Cited for the rule that the Court is not duty-bound to delve into the accuracy of the NLRC's factual findings absent a clear showing that they were arbitrary and bereft of rational basis, and for the principle that union officers are duty-bound to guide members to respect the law.
• Ilaw at Buklod ng Manggagawa (IBM) vs. NLRC, 275 Phil. 635 (1991) — Cited for the proposition that a slowdown is inherently and essentially illegal even in the absence of a no-strike clause, statute, or rule.
• Interphil Laboratories Employees Union-FFW vs. Interphil Laboratories, Inc., 423 Phil. 948 (2001) — Cited for the definition of a slowdown as a "strike on the installment plan" and the condemnation of slowdowns as inherently illicit.
• Arboleda vs. NLRC, 362 Phil. 383 (1999) — Cited for the principle that absent convincing evidence of any cogent reason why a witness should testify falsely, his testimony may be accorded full faith and credit, and that affirmative assertions prevail over general denials.
• New Puerto Commercial vs. Lopez, 639 Phil. 437 (2010) — Cited for the twin-notice requirement and the rule that the hearing requirement is satisfied by the opportunity to be heard.
• Pilipino Telephone Corporation vs. Pilipino Telephone Employees Association (PILTEA), 552 Phil. 432 (2007) — Cited for the principle that strike is the most preeminent economic weapon of workers but imposes the supreme penalty of dismissal on union officers who irresponsibly participate in an illegal strike, and that the State does not tolerate actions directed at destabilization of the social order.

• Article 264(a), Labor Code — Provides that any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status. Applied to uphold the dismissal of petitioners as union officers who instigated an illegal slowdown.
• Article 263(g), Labor Code — Authorizes the Secretary of Labor to certify a labor dispute to the NLRC for compulsory arbitration, directing parties to maintain the status quo. Applied when the DOLE Secretary certified the dispute on July 21, 2011.

Velasco, Jr. (Chairperson), Perez, Reyes, and Jardeleza, JJ., concurred.