Republic of the Philippines

Province of Cebu
University Of Cebu- Banilad Campus
College of Law

A Position Paper Assignment

Presented to the
Faculty of the College of Law
University of Cebu-Banilad Campus
Cebu City, Philippines

As Partial Fulfillment of the

Requirements for the the Legal Research
and Thesis Writing Subject of
Atty. Carlo Vincent E. Gimena

By:

DANN MARR P. ANDRINO

JD 1
 Republic of the Philippines
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
Regional Arbitration Branch (RAB) No. 7
Cebu City

CEBU AGRIVENTURES
EMPLOYEES ASSOCIATION (CAEA),
JOHN REY B. MANATAD, ET. AL.,
Plaintiff,

- versus - NLRC RAB Case No. 012467-a

CEBU AGRIVENTURES, INC.

Defendant.
x--------------------------------------x

POSITION PAPER FOR THE DEFENDANT

The Defendant CEBU AGRIVENTURES, INC. assisted by Counsel

come to this Honorable Court and respectfully avers that:

-A-

PREFATORY STATEMENT

The employers right to conduct the affairs of its business, according

to its own discretion and judgment is well-recognized. Management has a
wide latitude to conduct its own affairs in accordance with the necessities of
its business. Needless to state, however, that the defendant understand that
the exercise of management prerogative is never absolute. It is subject to the
limitations imposed by law, employment contract, employer policy or
practice and general principles of fair play and justice.1

The employers are subject to abuse in the hands of entitled employees

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1
!The Philippine American Life and General Insurance Co. vs. Gramaje, G. R. No. 156963, Nov. 11, 2004
!

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in the guise of unions with vested interests. The law, in protecting the rights
of the laborer, authorizes neither oppression nor self-destruction of the
employer. While the Constitution is committed to the policy of social justice
and the protection of the working class, it should not be supposed that every
labor dispute will be automatically decided in favor of labor.2 Management
also has its own rights which, as such, are entitled to respect and
enforcement in the interest of simple fair play. There is, indeed, a
compelling reason for the Honorable Court, en banc, to consider this plea.

-B-

PARTIES

The parties involved are the following, to wit:

1. CEBU AGRIVENTURES EMPLOYEES ASSOCIATION,

represented by its Union President John Rey B. Manatad, 36,
Married and a resident of Nashville Subdivision, Nasipit,
Talamban, Cebu City, Plaintiff; and

2. CEBU AGRIVENTURES, INC., a holding company engaged

in the food industry with an address at 42 E. Osmea
Street, Cebu City, Cebu as the Defendant represented by its
Chief Executive Officer, Richard T. Gokongwei, 45, Married
and a resident of Box E, Apple One Suites, Fuente Osmena, 22
J. Llorente St, Cebu City, Cebu.

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2
!Sime Darby Pilipinas, Inc. vs. NLRC, 119205, April 15, 1998
!

! 3!
 -C-

STATEMENT OF FACTS

On June 20, 2016, Cebu Agriventures, Inc., a holding company

engaged in the food industry, announced the centralization of support group
of several of its companies including Foodstuff Inc. to further enhance its
efficiency and be more competitive in the food industry dubbed as Human
Resource Rationalization Program (HRRP) through an issuance of an office
memorandum, a copy of which is hereto attached and labeled as Annex A.

The HRRP was an invitation to the employees to tender their

voluntary resignation, with entitlement to separation pay equivalent to at
least two (2) months salary for every year of service. Those eligible under
the companys retirement plan would still receive additional pay. In
pursuance of this company initiative, employees from the Information
Technology (IT) and Accounting Department were given the choice of
transferring to Cebu Agriventures, Inc. or to be declared redundant and
terminated with benefits.

Considering the lower amount of compensation and benefits offered

in the new positions, most of the employees of Foodstuff Inc. were forced to
choose to be severed from the company. Thereafter, majority of the
employees from those departments availed of the HRRP. Of the 121
employees, only 86 employees chose to take advantage of the offer made by
Cebu Agriventures, Inc. A copy of the certification issued last July 4, 2016
made by the companys Human Resource and Management Officer Maria
Anabella T. Alila-Ceballos is hereto attached and labeled as Annex B.
Because of said reduction, Cebu Agriventures, Inc. subsequently contracted
out the jobs held by former employees to other contractual employees.

The Union specifically alleges that there were other departments in

Cebu Agriventures, Inc. which utilized contractual employees to perform

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work load considered for regular employees in Accounting Department and
the Information Technology Department.

As a result, the number of union members was reduced, and the

number of contractual employees, who were never eligible for union
membership for lack of qualification, increased.

This case involves determination of whether or not Cebu

Agriventures, Inc. committed acts considered as unfair labor practice
(ULP). The underlying concept of ULP is found in Article 247 of the Labor
Code, to wit:

Article 247. Concept of unfair labor practice and

procedure for prosecution thereof. -- Unfair labor practices
violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor
and management, including their right to bargain collectively and
otherwise deal with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the promotion
of healthy and stable labor-management relations. x x x

Pursuant therefore the above-quoted provision, the defendants action

towards exercising a management prerogative should not be construed as an
unfair labor practice. Hence, this position paper.

-D-

STATEMENT OF ISSUE

WHETHER OR NOT JOB CONTRACTUALIZATION IS AN

UNFAIR LABOR PRACTICE ON THE PART OF THE
MANAGEMENT.

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 -E-

ARGUMENTS/ DISCUSSIONS

JOB CONTRACTUALIZATION
IS A LEGITIMATE EXERCISE OF
MANAGEMENT PREROGATIVE
-----------------------------------------------

As regards the first issue, it was Cebu Agriventure Inc.s position that
job contractualization or outsourcing or contracting-out of jobs was a
legitimate exercise of management prerogative and did not constitute unfair
labor practice. It had to implement new policies and programs, one of which
was the Human Resource Rationalization Program (HRRP) implemented
early this quarter to further enhance its efficiency and be more competitive
in the food industry. The HRRP was an invitation to the employees to tender
their voluntary resignation, with entitlement to separation pay equivalent to
at least two (2) months salary for every year of service. Those eligible under
the companys retirement plan would still receive additional pay. Thereafter,
majority of the employees availed of the said program.

Job contracting, outsourcing and/or contracting out of jobs did not per
se constitute ULP, especially when made in good faith and for valid
purposes.3 Despite Cebu Agriventure Inc.'s claim of good faith in resorting
to job contractualization for purposes of cost-efficient operations and its
non-interference with the employees' right to self-organization, such acts
should not be construed as an impairment of the employees right to self-
organization.

The general principle is that the one who makes an allegation has the
burden of proving it. While there are exceptions to this general rule, in ULP
cases, the alleging party has the burden of proving the ULP and in order to
show that the defendant committed ULP under the Labor Code, substantial
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3
!Bankard!Inc.!v!NLRC!and!Bankard!Employees!Union@!Workers!Alliance!Trade!Unions,!G.R.!No.!171664,!March!6,!2013!

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evidence is required to support the claim. Such principle finds justification
in the fact that ULP is punishable with both civil and/or criminal sanctions.

Aside from the bare allegations of the Union, nothing in the records
strongly proves that Cebu Agriventures Inc. intended its program, the
HRRP, as a tool to drastically and deliberately reduce union membership.
There was no proof that the program was meant to encourage the employees
to disassociate themselves from the Union or to restrain them from joining
any union or organization. There was no showing that it was intentionally
implemented to stunt the growth of the Union.

4
In the case of Bankard, Inc. vs NLRC, the Supreme Court has held
that lack of substantive evidence that the employer was motivated by ill will,
bad faith or malice, or that it was aimed at interfering with its employees
right to self-organize, it cannot be said to have committed an act of unfair
labor practice.

While it is true that the program might have affected the number of
union membership because of the employees voluntary resignation and
availment of the package, but it does not necessarily follow that the
defendant indeed purposely sought such result. It must be recalled that the
HRRP was implemented as a valid cost-cutting measure, well within the
ambit of the so- called management prerogatives.

Substantial evidence is more than a mere scintilla of evidence. It

means such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion, even if other minds equally reasonable might
conceivably opine otherwise.5 Unfortunately, the Union, which had the
burden of adducing substantial evidence to support its allegations of ULP,
failed to produce such evidence to substantiate their contention.

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4
!Bankard!Inc.!v!NLRC!and!Bankard!Employees!Union@!Workers!Alliance!Trade!Unions,!G.R.!No.!171664,!March!6,!2013!
5 5
! !Nia!Jewelry!Manufacturing!of!Metal!Arts,!Inc.!v.!Montecillo,!G.R.!No.!188169,!November!28,!2011,!661!SCRA!416,!432,!citing!
Honorable!Ombudsman!Simeon!Marcelo!v.!Leopoldo!Bungubung,!G.R.!No.!175201,!April!23,!2008,!552!SCRA!589,!608.!

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 -F-

PRAYER

WHEREFORE, premises considered, it is most respectfully prayed

that this case be dismissed and to render judgment in favor of the defendants
directing plaintiff to pay defendants for damages as sought for in their
counterclaim and such other relief as is equitable under the premises.

Cebu City.
October 21, 2016

RICHARD T. GOKONGWEI
Chief Executive Officer
Cebu Agriventures, Inc.

Assisted by:

ATTY. DANN MARR P. ANDRINO, CPA

Counsel for Defendants
Unit 811 Santa Veneranda Building
P. Del Rosario, Cebu City, Philippines
P.T.R. No. 2357840 * Cebu City * Jan. 21, 2015
I.B.P No. 1002133 * Cebu City * March 17, 2015
MCLE No. IV 0093621 * Cebu City * May 15, 2014
Roll No. 47610

EXPLANATION

A copy of this position paper is being furnished to plaintiffs counsel

not by personal service but by registered mail due to time constraint.

DANN MARR P. ANDRINO

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 VERIFICATION

I, RICHARD T. GOKONGWEI, of legal age and Filipino, after having

been duly sworn to in accordance with law, depose and state THAT:

I am one of the defendants in the above entitled case; I have caused

the preparation of the foregoing document and I have read the same and
the contents of which are true and correct of my own knowledge and/or on
the basis of authentic documents.

AFFIANT SAYETH NAUGHT.

In witness whereof, I hereunto affix my signature this October 21,

2016.

RICHARD T. GOKONGWEI
Affiant

REPUBLIC OF THE PHILIPPINES)

CEBU CITY )SS.

SUBSCRIBED AND SWORN to before me this October 21, 2016;

affaint exhibiting to me his TIN I.D. No. 100-943-748-10.

WITNESS MY HAND AND SEAL this October 21, 2016.

DOC. NO._______
PAGE NO._______ NOTARY PUBLIC
BOOK NO._______
SERIES OF 2015.

Copy furnished by registered mail

Registry Receipt No.__________
Cebu Provincial Post Office
Date: October 21, 2016

Atty. PAUL HENRY A. SIMBORIO

Counsel for the Plaintiff
CFG Building, Gov. Manuel A. Cuenco Ave.
Kasambagan, Cebu City

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 ANNEX%A%

Cebu Agriventures Inc.

42 E. Osmea Street, Cebu City, Cebu!
!
!
!
!

TO: ALL EMPLOYEES

SUBJECT: IMPLEMENTATION OF THE HUMAN RESOURCE

RATIONALIZATION PROGRAM (HRRP)

DATE: JUNE 20, 2016

We refer to the above matter.

The company is contemplating embarking upon a centralization of support

group of several of its companies including Foodstuff Inc. to further enhance its
efficiency and be more competitive in the food industry dubbed as Human
Resource Rationalization Program (HRRP). This program may require you to
tender voluntary resignation, with entitlement to separation pay equivalent to at
least two (2) months salary for every year of service. Those eligible under the
companys retirement plan would still receive additional pay under the existing
company policy.

Accordingly, it is necessary in such circumstances to consult with you

regarding the possible retrenchments and on possible issues and concerns that
may arise. We wish to confirm that none of these issues has been finally
determined. The companys final decision will depend on such representations as
you may make.

We fully appreciate that you may be concerned and apprehensive about

the possible consequences which the contemplated management decision will
have upon you and we are committed to conclude the process as soon as
reasonably possible. To this end we trust that we may rely on your co-operation
to conclude the process in order to meet the representation deadline.

Should you require any further information or assistance or have any

proposals regarding the above, please do not hesitate to let us know.

Yours sincerely,

RICHARD T. GOKONGWEI
Chief Executive Officer

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 ANNEX%B%

Cebu Agriventures Inc.

42 E. Osmea Street, Cebu City, Cebu!
!

JULY 4, 2016

CERTIFICATION

TO WHOM THIS MAY CONCERN:

This is to certify that the following names are those employees from
FoodStuff Inc. who expressed their intention to take advantage of the Human
Resource Rationalization Program (HRRP) of the company, to wit:

1. Abel Bersos 38. Josel Agosto

2. Albert Mariquit 39. Joseph Naguit
3. Alejandro Imperial 40. June Lamberte
4. Alex Sierra 41. Larry Gerola
5. Alexander Esteva 42. Lorenzo Caraqueo
6. Allan John Malabanan 43. Manjolito Puno
7. Allan Oclarino 44. Normandy Castalone
8. Allan Palomares 45. Pablito Adaya
9. Apollo Violeta 46. Philip Roxas
10. Ariel Garcia 47. Ramil Gecale
11. Arman Ercillo 48. Ramon Clemente
12. Arthur Parilla 49. Reynaldo Cuevas
13. Arturo Murillo 50. Richard Calalang
14. Baldwin San Pablo 51. Robert Gonzales
15. Basilio Laqui 52. Roderick Bayani
16. Charlie Oliveria 53. Rodolfo Bay
17. Christopher Saldivar 54. Sabas Barnabise
18. Dante Baclino 55. Wilfredo Tagle
19. Delmar Espadilla 56. Reah Sotes
20. Domingo Javier 57. Maria Liz Contado
21. Edgar Hilaga 58. Felice Mante
22. Elvis Tabinao 59. Calvin Mercado
23. Emilio C. Completo 60. Merceditas Reyes
24. Ernesto Bonavente 61. Ananias Jaculbe
25. Federico Torres 62. Manuel Mantos
26. Feliciano Mercado 63. Isidro Alonzo
27. Felicisimo Escrimadora 64. Fernando Cervantes
28. Ferdinand Jaen 65. Cicero Limbaga
29. Freddie Olit 66. Danilo Blanco
30. Grant Robert Toral 67. Andrea Brillantes
31. Greg Castro 68. Piolo Pascual, Jr.
32. Jimmy Hembra 69. Aime Membreve
33. Jimmy Palisoc 70. Agatha Ylanan
34. Joey Javellonar 71. Manuelito Arrabis
35. Joey Llanera 72. Nila Amante
36. John Posadas 73. Nemesio Arranguez
37. Jorge Polutan 74. Augusto Loot

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 75. Vicente Corro 81. Connie Dy-Estenzo
76. Karla Maria Henry 82. Mary Ann Reuyan
77. Mari-Venus Hernandez 83. Barry Dico
78. Esperanza Garcia 84. Aaron Faelnar
79. Leah Aggravantes 85. Dioscoro Laborte
80. Ronnie Apao 86. Daisy Aguilar

This certification is issued for whatever legal purpose this may serve.

October 19, 2016

Cebu City

MARIA ANABELLA T. ALILA-CEBALLOS

Human Resource and Management Officer

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