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SCA HYGIENE PRODUCTS CORPORATION EMPLOYEES
ASSOCIATION-FFW, Petitioner, |
G.R. No. 182877
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- versus - SCA
HYGIENE PRODUCTS CORPORATION, Respondent. |
Present: CORONA,
C. J., Chairperson, LEONARDO-DE CASTRO, BERSAMIN,* PEREZ, and MENDOZA,
JJ.** Promulgated: August 9, 2010 |
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PEREZ, J.:
For review on certiorari are
the Decision[1]
dated 19 February 2008 and the Resolution[2]
dated
The undisputed facts are as follows:
Respondent SCA Hygiene Products Corporation is a domestic corporation
engaged in the manufacture, sale and distribution of industrial paper, tissue
and allied products. It has existing
Collective Bargaining Agreements (CBAs) with SCA Hygiene Products Corporation
Monthly Employees Union-FSM (Monthly Employees Union) and petitioner SCA
Hygiene Products Corporation Employees Association-FFW (Daily Employees Union),
which represent the monthly and daily paid rank-and-file employees,
respectively.
Both CBAs of the Monthly Employees Union and the Daily Employees Union contain
provisions on Job Evaluation which state that:
ARTICLE VIII
JOB EVALUATION
SECTION 1. The Management
(COMPANY) will conduct Job Evaluation when deemed necessary. A third party
consultant may be tasked to conduct the program. The COMPANY agrees to maintain
the practice of involving the incumbent employee member of the
x x x x
ARTICLE VIII
JOB EVALUATION
SECTION 1. The COMPANY and the
SECTION 2. The COMPANY agrees
to advise the individual members of the
Sometime in 2003, respondent conducted a company-wide job evaluation
through an independent consultant, Mercer Human Resource Consulting, Inc. As provided for in the CBAs, respondent
conducted an orientation on the job evaluation process. All covered employees executed written job
descriptions which were used in the job evaluation of their respective
positions.
In February 2004, Mercer Human Resource Consulting, Inc. informed
respondent of the result of the job evaluation which led respondent to adopt eight
new job grade levels:[5]
|
Job Grade
Level |
Employee[s’]
Category |
|
8 |
Executive |
|
7 |
Executive |
|
6 |
Department
Manager |
|
5 |
Unit
Manager |
|
4 |
Unit
Manager |
|
3 |
Management
Team Member |
|
2 |
Rank-and-File |
|
1 |
Rank-and-File |
In a Letter dated 24 February 2004,[6]
respondent informed 22 daily paid rank-and-file employees that their positions
had been classified as Job Grade Level 2.
As a result, the Monthly Employees Union demanded that the 22 daily paid
rank-and-file employees be given conversion increase, promotion increase as
well as retroactive salary increase from the time the job evaluation was
completed on the ground that their positions had been converted into a higher
job grade level which amounted to a promotion. Likewise, the Daily Employees Union asked for
the adjustment of said employees’ compensation since the conversion warranted
their entitlement to the benefits, status and privileges of a monthly paid
rank-and-file employee.
As respondent failed to respond, both unions submitted their grievances
for mediation. When the parties failed
to reach an amicable settlement, they submitted the case for voluntary
arbitration.
The unions claimed that the 22 daily paid rank-and-file employees were
entitled to conversion increase since Job Grade Level 2 positions are meant for
monthly paid rank-and-file employees and along with the conversion, said
employees were given additional job descriptions. They were also entitled to promotion increase
since such is the company practice everytime an employee’s rank is converted to
a higher job grade level. The unions added
that the company violated their CBAs by refusing to implement the result of the
job evaluation considering that those converted from Job Grade Level 2 positions
to Job Grade Level 3 positions were granted the benefits concomitant to their
new positions.
The company countered that the job evaluation was merely a process of
determining the relative contribution and value of the positions in its operations
and does not provide for any adjustment in the salaries of the covered
employees. The subject employees cannot
be converted to monthly paid rank-and-file employees and given a conversion
increase since they continue to occupy the same positions that they were
occupying prior to the job evaluation. They
are not entitled to any promotion increase since they were never promoted to a
higher position as a Job Grade Level 2 position does not involve any increase
in their duties and responsibilities. The
company added that those employees converted to Job Grade Level 3 positions are
entitled to salary and benefits increase since they are classified as
managerial employees. On the other hand,
those holding Job Grade Level 2 positions remained rank-and-file employees.
On
The dispositive portion of the resolution provides:
WHEREFORE, in view of the foregoing, this Voluntary Arbitrator
promulgates the following:
1. Declaring that the following employees
are now deemed monthly paid rank-and-file employees and thus are entitled to
conversion increase equivalent to ten per cent (10%) of their current basic
salary as daily paid rank-and-file employees, retroactive from
Names Positions
1.
Julius M.
Concepcion Shift
Mechanical Technician
2.
Rolando C. Miel Shift Mechanical
Technician
3.
Leonilo T.
Sabinada Electro Mechanical
Technician
4.
Danilo T.
Maningas Electrical Technician
5.
Rulen A. Acosta Back Tender
6.
Luisito P. Diaz Back Tender
7.
Reynaldo M.
Legario Back Tender
8.
Arnel T.
Limbaring Back Tender
9.
Arlon Sison Back Tender
10. Roberto dela Cruz Preventive
Mechanical Technician
11. Elaido V. Agbayani Preventive
Mechanical Technician
12. Charlie M. Manaois Mechanical
Technician
13. Nelio E. Bejosano Warehouse
Custodian
14. Inventor V. Florada, Jr. Mechanical Technician
15. Paulo B. Romero Electrical
16. Dennis A. Ligue Production
Operator
17. Samuel F. Villosimo Boiler
Tender
18. Marian F. Perolino Boiler
Tender
19. Renante Anding Boiler
Tender
20. Gemar de Leola Electro
Mechanical Technician
21. Julius Cellona Electro
Mechanical Technician
22. Wenceslao B. Codizal Instrumentation
Technician
2. Denying the
3. Dismissing the Unions’ claim for damages also for lack of
merit and awarding ten per cent (10%) attorney’s fees to the Unions based on
the total computed conversion increase due the twenty two (22) employees. For
this purpose, the management of the Company and the duly authorized officers of
the Unions are enjoined to sit down and discuss the mechanics of the actual
implementation of this judgment award.[7]
On appeal, the Court of Appeals ruled in favor of respondent. First, it held that the job evaluation
was conducted as a reorganization process to standardize the company’s
organizational set-up. It was not
designed to provide any conversion or adjustment to the salaries of the
employees. The CBAs merely provided the
procedure for the implementation of the job evaluation. It did not specifically state that the covered
employees are entitled to any salary adjustment after the job evaluation. Hence, in the absence of any law or agreement
between the parties, any conversion much less promotion is left entirely to respondent’s
sound discretion. Second, the appellate court did not give credence to the unions’
claim that the grant of conversion/promotion increase was respondent’s long-standing
practice. To be considered a regular
practice, the grant of such increase should have been done over a long period
of time and must be shown to be consistent and deliberate. In this case, there was no evidence that respondent
agreed to continue giving the benefits knowing fully well that its employees
are not covered by the law requiring payment thereof. Third,
the appellate court noted that those employees converted to Job Grade Level 3
positions were given salary and benefits increase since they became managerial
employees after the job evaluation. The
same could not be said with regard to those holding Job Grade Level 2 positions
since they remained rank-and-file employees.
The decretal portion of the decision provides:
WHEREFORE, the petition for review is GRANTED and the
Resolution dated
Hence,
the instant petition raising the following issues:
I.
THE
HONORABLE COURT OF APPEALS GROSSLY ERRED WHEN IT DECIDED THE CASE IN UTTER
DISREGARD OF THE SUBSTANTIATED FACTS THAT A PROMOTION TOOK PLACE WHEN THE
TWENTY-TWO (22) DAILY PAID EMPLOYEES, WHO WERE PREVIOUSLY OCCUPYING JOB LEVEL I
POSITIONS, WERE SUBSEQUENTLY CONVERTED INTO OR PROMOTED TO JOB LEVEL 2
POSITIONS AFTER THE RESULT OF THE JOB EVALUATION ON FEBRUARY 24, 2004.
II.
THE
HONORABLE COURT OF APPEALS GROSSLY ERRED WHEN IT DECIDED THE CASE IN UTTER
DISREGARD OF THE SUBSTANTIATED FACTS AND THE EVIDENCE ADDUCED TO THE EFFECT
THAT THERE WAS A LONG-STANDING [COMPANY PRACTICE] THAT EVERYTIME THERE IS A
CHANGE IN THE JOB LEVEL POSITION OF AN EMPLOYEE, THE COMPANY GRANTS A
CORRESPONDING CONVERSION INCREASE OF TEN [PERCENT] (10%), BASED ON THE
EMPLOYEE’S CURRENT BASIC SALARY.[9]
Briefly, the key issues in this petition are: (1) Were the 22 daily paid
rank-and-file employees promoted after their positions have been converted from
Job Grade Level 1 to Job Grade Level 2?; and (2) if so, are they entitled to
conversion increase equivalent to 10% of their current basic salary?
Petitioner contends that the 22 daily paid rank-and-file employees were promoted
after the job evaluation. In fact, they
have been performing the duties and responsibilities of a monthly paid
rank-and-file employee occupying a Job Grade Level 2 position even before the
job evaluation. Petitioner adds that
said employees are entitled to conversion increase since such has been the
company practice everytime an employee’s rank is converted to a higher job
grade level.
Respondent counters that the job evaluation was merely a process of
determining the relative contribution and value of the positions in its
operations and does not provide for any adjustment in the salaries of the
covered employees. It adds that the 22
daily paid rank-and-file employees were not promoted since they continue to
occupy the same positions that they were occupying prior to the job evaluation.
They also perform the same functions and
have the same responsibilities.
The petition has no merit.
It is a well-settled rule that labor laws do not authorize interference
with the employer's judgment in the conduct of its business. The Labor Code and its implementing rules do
not vest managerial authority in the labor arbiters or in the different
divisions of the National Labor Relations Commission or in the courts. The hiring, firing, transfer, demotion, and
promotion of employees have been traditionally identified as a management
prerogative subject to limitations found in the law, a collective bargaining
agreement, or in general principles of fair play and justice. This is a function associated with the
employer's inherent right to control and manage effectively its enterprise. Even as the law is solicitous of the welfare
of employees, it must also protect the right of an employer to exercise what
are clearly management prerogatives. The
free will of management to conduct its own business affairs to achieve its
purpose cannot be denied. Accordingly,
this Court has recognized and affirmed the prerogative of management to
implement a job evaluation program or a re-organization for as long as it is
not contrary to law, morals or public policy.[10]
In the case at bar, petitioner has miserably failed to convince this
Court that respondent acted in bad faith in implementing the job evaluation
program. There is no showing that it was
intended to circumvent the law and deprive the 22 daily paid rank-and-file
employees of the benefits they are supposed to receive.
The job evaluation program was undertaken to streamline respondent’s
operations and to place its employees in their proper positions or groupings. A perusal of the CBAs of the parties showed
that, as correctly ruled by the Court of Appeals, it merely provided the
procedure for the implementation of the job evaluation and did not guarantee
any adjustment in the salaries of the employees.
We are not prepared to grant any conversion or promotion increase to the
22 daily paid rank-and-file employees since what transpired was only a promotion
in nomenclature. Of primordial
consideration is not the nomenclature or title given to the employee, but the
nature of his functions.[11] Based on the eight new job grade levels which
respondent adopted after the job evaluation, Job Grade Levels 1 and 2 positions
are both categorized as rank-and-file employees. Said employees continued to occupy the same
positions they were occupying prior to the job evaluation. Moreover, their job titles remained the same
and they were not given additional duties and responsibilities.
There is also no evidence to show that Job Grade Levels 1 and 2 positions
are confined only to daily and monthly paid rank-and-file employees,
respectively, such that when a conversion from Job Grade Level 1 to Job Grade
Level 2 takes place, a promotion automatically ensues. The pronouncement of Voluntary Arbitrator
Renato Q. Bello that Job Grade Level 2 positions are mostly occupied by monthly
paid rank-and-file employees implies that some daily paid rank-and-file
employees also occupy that position.[12] Thus,
a mere conversion from Job Grade Level 1 position to Job Grade Level 2 position
does not, of course, make a daily paid rank-and- filer a monthly paid one with
a concomitant conversion and promotion increase.
Petitioner also failed to substantiate its allegation that it has been a
long-standing company practice to grant a conversion or promotion increase
everytime an employee’s rank is converted to a higher job grade level. The instances which petitioner cited showed
clear intent on respondent’s part to promote the employees concerned. The job titles and positions held by such
employees have changed following the fact that they have assumed additional
duties and responsibilities.
Finally, we see why petitioners cannot make common cause with those whose
positions were converted from Job Grade Level 2 to Job Grade Level 3 and were,
thereby, given the benefits concomitant to the higher level. Those who were elevated to Job Grade Level 3
positions were rightfully given the additional benefits since they have become
managerial employees, specifically Management Team Members, and not merely
rank-and-file employees. The same cannot
be said of the twenty-two (22) daily paid rank-and-file employees involved in
the case at bar.
WHEREFORE, the petition is DENIED. The Decision dated 19 February
2008 and the Resolution dated 5 May 2008 of the Court of Appeals in CA-G.R. SP
No. 100308 are AFFIRMED.
SO ORDERED.
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JOSE Associate Justice |
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WE CONCUR: RENATO C.
CORONA Chief Justice Chairperson |
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TERESITA J. LEONARDO-DE CASTRO Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
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JOSE CATRAL Associate Justice |
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C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, I certify that the conclusions
in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.
RENATO
C. CORONA
Chief
Justice
* Per Special Order No. 876, Associate Justice Lucas P. Bersamin is designated an additional member in place of Associate Justice Presbitero J. Velasco, Jr. who is on official leave under the Court’s Wellness Program.
** Per raffle dated 7 July 2010, Associate Justice Jose Catral Mendoza is designated as an additional member in place of Associate Justice Mariano C. Del Castillo.
[1] Rollo, pp. 36-48. Penned by Associate Justice Mariano C. Del Castillo (now a member of this Court) with Associate Justices Arcangelita M. Romilla-Lontok and Romeo F. Barza concurring.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10] Hongkong and Shanghai Banking Corporation Employees Union v. National Labor Relations Commission, 346 Phil. 524, 534-535 (1997); See Nagkahiusang Namumuo sa Dasuceco-National Federation of Labor (NAMADA-NFL) v. Davao Sugar Central Co., Inc., G.R. No. 145848, 9 August 2006, 498 SCRA 271, 274-275.
[11] National Federation of Labor Unions v. National Labor Relations Commission, G.R. No. 90739, 3 October 1991, 202 SCRA 346, 353.
[12] Rollo, p. 90.